Exam 3: International Financial Markets

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A quotation representing the value of a foreign currency in dollars is referred to as a(n) quotation; a quotation representing the number of units of a foreign currency per dollar is referred to as a(n) quotation.

(Multiple Choice)

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Question 81

Banks charge larger bid/ask spreads than they would on less liquid, less traded currencies.

(True/False)

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Question 82

A put option is the amount or percentage by which the existing spot rate exceeds the forward rate.

(True/False)

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Question 83

The preferences of corporations and governments to borrow in foreign currencies and of investors to make short-term investments in foreign currencies resulted in the creation of the international bond market.

(True/False)

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Question 84

The bid/ask spread for small retail transactions is commonly in the range of ____ percent.

(Multiple Choice)

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Question 85

____ is not a factor that affects the bid/ask spread.

(Multiple Choice)

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Question 86

Which of the following is not true about syndicated loans?

(Multiple Choice)

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Question 87

An MNC's short-term financing decisions are satisfied in the market, while its medium debt financing decisions are satisfied in the market.

(Multiple Choice)

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Question 88

The strike price is also known as the premium price.

(True/False)

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Question 89

The strike price on a currency option is also known as an exercise price.

(True/False)

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Question 90

Which of the following is not true regarding ADRs?

(Multiple Choice)

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Question 91

Forward markets for currencies of developing countries are:

(Multiple Choice)

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Question 92

The U.S. dollar is not ever used as a medium of exchange in:

(Multiple Choice)

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Question 93

Eurobonds are certificates representing bundles of stock.

(True/False)

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Question 94

Certificates representing bundles of stock of non-U.S. firms are called:

(Multiple Choice)

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Question 95

From 1944 to 1971, the exchange rate between any two currencies was typically:

(Multiple Choice)

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Question 96

____ is not a bank characteristic important to customers in need of foreign exchange.

(Multiple Choice)

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Question 97

The ADR of a British firm is convertible into 3 shares of stock. The share price of the firm was 30 pounds when the British market closed. When the U.S. market opens, the pound is worth $1.63. The price of this ADR should be $____.

(Multiple Choice)

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Question 98

If a U.S. firm desires to avoid the risk from exchange rate fluctuations, and it is receiving 100,000 in 90 days, it could:

(Multiple Choice)

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Question 99

According to the text, the forward rate is commonly used for:

(Multiple Choice)

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Question 100

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Exam 3: International Financial Markets

A quotation representing the value of a foreign currency in dollars is referred to as a(n) ____ quotation; a quotation representing the number of units of a foreign currency per dollar is referred to as a(n) ____ quotation.

Banks charge larger bid/ask spreads than they would on less liquid, less traded currencies.

A put option is the amount or percentage by which the existing spot rate exceeds the forward rate.

The preferences of corporations and governments to borrow in foreign currencies and of investors to make short-term investments in foreign currencies resulted in the creation of the international bond market.

The bid/ask spread for small retail transactions is commonly in the range of ____ percent.

____ is not a factor that affects the bid/ask spread.

Which of the following is not true about syndicated loans?

An MNC's short-term financing decisions are satisfied in the ____ market, while its medium debt financing decisions are satisfied in the ____ market.

The strike price is also known as the premium price.

The strike price on a currency option is also known as an exercise price.

Which of the following is not true regarding ADRs?

Forward markets for currencies of developing countries are:

The U.S. dollar is not ever used as a medium of exchange in:

Eurobonds are certificates representing bundles of stock.

Certificates representing bundles of stock of non-U.S. firms are called:

From 1944 to 1971, the exchange rate between any two currencies was typically:

____ is not a bank characteristic important to customers in need of foreign exchange.

The ADR of a British firm is convertible into 3 shares of stock. The share price of the firm was 30 pounds when the British market closed. When the U.S. market opens, the pound is worth $1.63. The price of this ADR should be $____.

If a U.S. firm desires to avoid the risk from exchange rate fluctuations, and it is receiving 100,000 in 90 days, it could:

According to the text, the forward rate is commonly used for:

Multinational Financial Management: an Overview

International Flow of Funds

Exchange Rate Determination

Currency Derivatives

Government Influence on Exchange Rates

International Arbitrage and Interest Rate Parity

Relationships Among Inflation, Interest Rates, and Exchange Rates

Forecasting Exchange Rates

Measuring Exposure to Exchange Rate Fluctuations

Managing Transaction Exposure

Managing Economic Exposure and Translation Exposure

Direct Foreign Investment

Multinational Capital Budgeting

International Corporate Governance and Control

Country Risk Analysis

Multinational Cost of Capital and Capital Structure

Long-Term Debt Financing

Financing International Trade

Short-Term Financing

International Cash Management

Filters

A quotation representing the value of a foreign currency in dollars is referred to as a(n) quotation; a quotation representing the number of units of a foreign currency per dollar is referred to as a(n) quotation.

An MNC's short-term financing decisions are satisfied in the market, while its medium debt financing decisions are satisfied in the market.