国际金融International Finance Test Bank_18

合集下载

国际金融 International Finance Test Bank_07

Chapter 7—International Arbitrage and Interest Rate Parity1. Due to ____, market forces should realign the relationship between the interest rate differential of twocurrencies and the forward premium (or discount) on the forward exchange rate between the twocurrencies.a. forward realignment arbitrageb. triangular arbitragec. covered interest arbitraged. locational arbitrageANS: C PTS: 12. Due to ____, market forces should realign the spot rate of a currency among banks.a. forward realignment arbitrageb. triangular arbitragec. covered interest arbitraged. locational arbitrageANS: D PTS: 13. Due to ____, market forces should realign the cross exchange rate between two foreign currenciesbased on the spot exchange rates of the two currencies against the U.S. dollar.a. forward realignment arbitrageb. triangular arbitragec. covered interest arbitraged. locational arbitrageANS: B PTS: 14. If interest rate parity exists, then ____ is not feasible.a. forward realignment arbitrageb. triangular arbitragec. covered interest arbitraged. locational arbitrageANS: C PTS: 15. In which case will locational arbitrage most likely be feasible?a. One bank's ask price for a currency is greater than another bank's bid price for thecurrency.b. One bank's bid price for a currency is greater than another bank's ask price for thecurrency.c. One bank's ask price for a currency is less than another bank's ask price for the currency.d. One bank's bid price for a currency is less than another bank's bid price for the currency.ANS: B PTS: 16. When using ____, funds are not tied up for any length of time.a. covered interest arbitrageb. locational arbitragec. triangular arbitraged. B and CANS: D PTS: 17. When using ____, funds are typically tied up for a significant period of time.a. covered interest arbitrageb. locational arbitragec. triangular arbitraged. B and CANS: A PTS: 18. Assume that the interest rate in the home country of Currency X is a much higher interest rate than theU.S. interest rate. According to interest rate parity, the forward rate of Currency X:a. should exhibit a discount.b. should exhibit a premium.c. should be zero (i.e., it should equal its spot rate).d. B or CANS: A PTS: 19. If the interest rate is higher in the U.S. than in the United Kingdom, and if the forward rate of theBritish pound (in U.S. dollars) is the same as the pound's spot rate, then:a. U.S. investors could possibly benefit from covered interest arbitrage.b. British investors could possibly benefit from covered interest arbitrage.c. neither U.S. nor British investors could benefit from covered interest arbitrage.d. A and BANS: B PTS: 110. If the interest rate is lower in the U.S. than in the United Kingdom, and if the forward rate of theBritish pound is the same as its spot rate:a. U.S. investors could possibly benefit from covered interest arbitrage.b. British investors could possibly benefit from covered interest arbitrage.c. neither U.S. nor British investors could benefit from covered interest arbitrage.d. A and BANS: A PTS: 111. Assume that the U.S. investors are benefiting from covered interest arbitrage due to high interest rateson euros. Which of the following forces should result from the act of this covered interest arbitrage?a. downward pressure on the euro's spot rate.b. downward pressure on the euro's forward rate.c. downward pressure on the U.S. interest rate.d. upward pressure on the euro's interest rate.ANS: B PTS: 112. Assume that Swiss investors are benefiting from covered interest arbitrage due to a high U.S. interestrate. Which of the following forces results from the act of this covered interest arbitrage?a. upward pressure on the Swiss franc's spot rate.b. upward pressure on the U.S. interest rate.c. downward pressure on the Swiss interest rate.d. upward pressure on the Swiss franc's forward rate.ANS: D PTS: 113. Assume that a U.S. firm can invest funds for one year in the U.S. at 12% or invest funds in Mexico at14%. The spot rate of the peso is $.10 while the one-year forward rate of the peso is $.10. If U.S. firms attempt to use covered interest arbitrage, what forces should occur?a. spot rate of peso increases; forward rate of peso decreases.b. spot rate of peso decreases; forward rate of peso increases.c. spot rate of peso decreases; forward rate of peso decreases.d. spot rate of peso increases; forward rate of peso increases.ANS: A PTS: 114. Assume the bid rate of a New Zealand dollar is $.33 while the ask rate is $.335 at Bank X. Assume thebid rate of the New Zealand dollar is $.32 while the ask rate is $.325 at Bank Y. Given this information, what would be your gain if you use $1,000,000 and execute locational arbitrage? That is, how much will you end up with over and above the $1,000,000 you started with?a. $15,385.b. $15,625.c. $22,136.d. $31,250.ANS: ASOLUTION: $1,000,000/$.325 = NZ$3,076,923 ⨯ $.33 = $1,015,385. Thus, the profit is$15,385.PTS: 115. Based on interest rate parity, the larger the degree by which the foreign interest rate exceeds the U.S.interest rate, the:a. larger will be the forward discount of the foreign currency.b. larger will be the forward premium of the foreign currency.c. smaller will be the forward premium of the foreign currency.d. smaller will be the forward discount of the foreign currency.ANS: A PTS: 116. Assume the following information:You have $1,000,000 to invest:Current spot rate of pound = $1.3090-day forward rate of pound = $1.283-month deposit rate in U.S. = 3%3-month deposit rate in Great Britain = 4%If you use covered interest arbitrage for a 90-day investment, what will be the amount of U.S. dollars you will have after 90 days?a. $1,024,000.b. $1,030,000.c. $1,040,000.d. $1,034,000.e. none of the aboveANS: ASOLUTION: $1,000,000/$1.30 = 769,231 pounds ⨯ (1.04) = 800,000 pounds ⨯ 1.28 =$1,024,000PTS: 117. Assume that the U.S. interest rate is 10%, while the British interest rate is 15%. If interest rate parityexists, then:a. British investors who invest in the United Kingdom will achieve the same return as U.S.investors who invest in the U.S.b. U.S. investors will earn a higher rate of return when using covered interest arbitrage thanwhat they would earn in the U.S.c. U.S. investors will earn 15% whether they use covered interest arbitrage or invest in theU.S.d. U.S. investors will earn 10% whether they use covered interest arbitrage or invest in theU.S.ANS: D PTS: 118. Assume the following information:U.S. investors have $1,000,000 to invest:1-year deposit rate offered on U.S. dollars = 12%1-year deposit rate offered on Singapore dollars = 10%1-year forward rate of Singapore dollars = $.412Spot rate of Singapore dollar = $.400Given this information:a. interest rate parity exists and covered interest arbitrage by U.S. investors results in thesame yield as investing domestically.b. interest rate parity doesn't exist and covered interest arbitrage by U.S. investors results in ayield above what is possible domestically.c. interest rate parity exists and covered interest arbitrage by U.S. investors results in a yieldabove what is possible domestically.d. interest rate parity doesn't exist and covered interest arbitrage by U.S. investors results in ayield below what is possible domestically.ANS: BSOLUTION: $1,000,000/$.400 = S$2,500,000 ⨯ (1.1)= S$2,750,000 ⨯ $.412 = $1,133,000Yield = ($1,133,000 - $1,000,000)/$1,000,000 = 13.3%This yield exceeds what is possible domestically.PTS: 119. Assume the following information:Current spot rate of New Zealand dollar = $.41Forecasted spot rate of New Zealand dollar 1 year from now = $.43One-year forward rate of the New Zealand dollar = $.42Annual interest rate on New Zealand dollars = 8%Annual interest rate on U.S. dollars = 9%Given the information in this question, the return from covered interest arbitrage by U.S. investors with $500,000 to invest is ____%.a. about 11.97b. about 9.63c. about 11.12d. about 11.64e. about 10.63ANS: ESOLUTION: $500,000/$.41 = NZ$1,219,512 ⨯ (1.08)= NZ$1,317,073 ⨯ .42 = $553,171Yield = ($553,171 - $500,000)/$500,000 = 10.63%PTS: 120. Assume the following bid and ask rates of the pound for two banks as shown below:Bid AskBank A $1.41 $1.42Bank B $1.39 $1.40As locational arbitrage occurs:a. the bid rate for pounds at Bank A will increase; the ask rate for pounds at Bank B willincrease.b. the bid rate for pounds at Bank A will increase; the ask rate for pounds at Bank B willdecrease.c. the bid rate for pounds at Bank A will decrease; the ask rate for pounds at Bank B willdecrease.d. the bid rate for pounds at Bank A will decrease; the ask rate for pounds at Bank B willincrease.ANS: D PTS: 121. Assume the bid rate of a Singapore dollar is $.40 while the ask rate is $.41 at Bank X. Assume the bidrate of a Singapore dollar is $.42 while the ask rate is $.425 at Bank Z. Given this information, what would be your gain if you use $1,000,000 and execute locational arbitrage? That is, how much will you end up with over and above the $1,000,000 you started with?a. $11,764.b. -$11,964.c. $36,585.d. $24,390.e. $18,219.ANS: DSOLUTION: $1,000,000/$.41 = S2,439,024 ⨯ $.42 = $1,024,390PTS: 122. Based on interest rate parity, the larger the degree by which the U.S. interest rate exceeds the foreigninterest rate, the:a. larger will be the forward discount of the foreign currency.b. larger will be the forward premium of the foreign currency.c. smaller will be the forward premium of the foreign currency.d. smaller will be the forward discount of the foreign currency.ANS: B PTS: 123. Assume the following exchange rates: $1 = NZ$3, NZ$1 = MXP2, and $1 = MXP5. Given thisinformation, as you and others perform triangular arbitrage, the exchange rate of the New Zealand dollar (NZ) with respect to the U.S. dollar should ____, and the exchange rate of the Mexican peso (MXP) with respect to the U.S. dollar should ____.a. appreciate; depreciateb. depreciate; appreciatec. depreciate; depreciated. appreciate; appreciatee. remain stable; appreciateANS: A PTS: 124. Assume the following information:Spot rate today of Swiss franc = $.601-year forward rate as of today for Swiss franc = $.63Expected spot rate 1 year from now = $.64Rate on 1-year deposits denominated in Swiss francs = 7%Rate on 1-year deposits denominated in U.S. dollars = 9%From the perspective of U.S. investors with $1,000,000, covered interest arbitrage would yield a rate of return of ____%.a. 5.00b. 12.35c. 15.50d. 14.13e. 11.22ANS: BSOLUTION: $1,000,000/$.60 = SF1,666,667 ⨯ (1.07)= SF1,783,333 ⨯ $.63 = $1,123,500Yield = ($1,123,500 - $1,000,000)/$1,000,000 = 12.35%PTS: 125. Assume the following information for a bank quoting on spot exchange rates:Exchange rate of Singapore dollar in U.S. $ = $.32Exchange rate of pound in U.S. $ = $1.50Exchange rate of pound in Singapore dollars = S$4.50Based on the information given, as you and others perform triangular arbitrage, what should logically happen to the spot exchange rates?a. The Singapore dollar value in U.S. dollars should appreciate, the pound value in U.S.dollars should appreciate, and the pound value in Singapore dollars should depreciate.b. The Singapore dollar value in U.S. dollars should depreciate, the pound value in U.S.dollars should appreciate, and the pound value in Singapore dollars should depreciate.c. The Singapore dollar value in U.S. dollars should depreciate, the pound value in U.S.dollars should appreciate, and the pound value in Singapore dollars should appreciate.d. The Singapore dollar value in U.S. dollars should appreciate, the pound value in U.S.dollars should depreciate, and the pound value in Singapore dollars should appreciate.ANS: D PTS: 126. Assume the British pound is worth $1.60, and the Canadian dollar is worth $.80. What is the value ofthe Canadian dollar in pounds?a. 2.0.b. 2.40.c. .80.d. .50.e. none of the aboveANS: DSOLUTION: $.80/$1.60 = 0.50PTS: 127. Assume that the euro's interest rates are higher than U.S. interest rates, and that interest rate parityexists. Which of the following is true?a. Americans using covered interest arbitrage earn the same rate of return as Germans whoattempt covered interest arbitrage.b. Americans who invest in the U.S. earn the same rate of return as Germans who attemptcovered interest arbitrage.c. Americans who invest in the U.S. earn the same rate of return as Germans who invest inGermanyd. A and Be. None of the aboveANS: E PTS: 128. Assume the U.S. interest rate is 2% higher than the Swiss rate, and the forward rate of the Swiss franchas a 4% premium. Given this information:a. Swiss investors who attempt covered interest arbitrage earn the same rate of return as ifthey invested in Switzerland.b. U.S. investors who attempt covered interest arbitrage earn a higher rate of return than ifthey invested in the U.S.c. A and Bd. none of the aboveANS: B PTS: 129. Assume that British interest rates are higher than U.S. rates, and that the spot rate equals the forwardrate. Covered interest arbitrage puts ____ pressure on the pound's spot rate, and ____ pressure on the pound's forward rate.a. downward; downwardb. downward; upwardc. upward; downwardd. upward; upwardANS: C PTS: 130. Assume that interest rate parity holds, and the euro's interest rate is 9% while the U.S. interest rate is12%. Then the euro's interest rate increases to 11% while the U.S. interest rate remains the same. As a result of the increase in the interest rate on euros, the euro's forward ____ will ____ in order tomaintain interest rate parity.a. discount; increaseb. discount; decreasec. premium; increased. premium; decreaseANS: D PTS: 131. Assume the bid rate of a Swiss franc is $.57 while the ask rate is $.579 at Bank X. Assume the bid rateof the Swiss franc is $.560 while the ask rate is $.566 at Bank Y. Given this information, what would be your gain if you use $1,000,000 and execute locational arbitrage? That is, how much will you end up with over and above the $1,000,000 you started with?a. $7,067.b. $8,556.c. $10,114.d. $12,238.ANS: ASOLUTION: $1,000,000/$.566 = SF1,766,784 ⨯ $.57 = $1,007,067. Thus, the profit is$7,067.PTS: 132. Assume the following information:You have $1,000,000 to invest:Current spot rate of pound = $1.6090-day forward rate of pound = $1.573-month deposit rate in U.S. = 3%3-month deposit rate in U.K. = 4%If you use covered interest arbitrage for a 90-day investment, what will be the amount of U.S. dollars you will have after 90 days?a. $1,020,500.b. $1,045,600.c. $1,073,330.d. $1,094,230.e. $1,116,250.ANS: ASOLUTION: $1,000,000/$1.60 = 625,000 pounds ⨯ (1.04) = 650,000 pounds ⨯ 1.57 =$1,020,500PTS: 133. Assume the following information:U.S. investors have $1,000,000 to invest:1-year deposit rate offered by U.S. banks = 12%1-year deposit rate offered on Swiss francs = 10%1-year forward rate of Swiss francs = $.62Spot rate of Swiss franc = $.60Given this information:a. interest rate parity exists and covered interest arbitrage by U.S. investors results in thesame yield as investing domestically.b. interest rate parity doesn't exist and covered interest arbitrage by U.S. investors results in ayield above what is possible domestically.c. interest rate parity exists and covered interest arbitrage by U.S. investors results in a yieldabove what is possible domestically.d. interest rate parity doesn't exist and covered interest arbitrage by U.S. investors results in ayield below what is possible domestically.ANS: BSOLUTION: $1,000,000/$.60 = SF1,666,667 ⨯ (1.1) = SF1,833,333 ⨯ $.62 = $1,136,667Yield = ($1,136,667 - $1,000,000)/$1,000,000 = 13.7%This yield exceeds what is possible domestically.PTS: 134. Assume the following information:Current spot rate of Australian dollar = $.64Forecasted spot rate of Australian dollar 1 year from now = $.591-year forward rate of Australian dollar = $.62Annual interest rate for Australian dollar deposit = 9%Annual interest rate in the U.S. = 6%Given the information in this question, the return from covered interest arbitrage by U.S. investors with $500,000 to invest is ____%.a. about 6.00b. about 9.00c. about 7.33d. about 8.14e. about 5.59ANS: ESOLUTION: $500,000/$.64 = A$781,250 ⨯ (1.09)= A$851,563 ⨯ $.62 = $527,969Yield = ($527,969 - $500,000)/$500,000 = 5.59%PTS: 135. Assume the following bid and ask rates of the pound for two banks as shown below:Bid AskBank C $1.61 $1.63Bank D $1.58 $1.60As locational arbitrage occurs:a. the bid rate for pounds at Bank C will increase; the ask rate for pounds at Bank D willincrease.b. the bid rate for pounds at Bank C will increase; the ask rate for pounds at Bank D willdecrease.c. the bid rate for pounds at Bank C will decrease; the ask rate for pounds at Bank D willdecrease.d. the bid rate for pounds at Bank C will decrease; the ask rate for pounds at Bank D willincrease.ANS: D PTS: 136. Assume the bid rate of an Australian dollar is $.60 while the ask rate is $.61 at Bank Q. Assume thebid rate of an Australian dollar is $.62 while the ask rate is $.625 at Bank V. Given this information, what would be your gain if you use $1,000,000 and execute locational arbitrage? That is, how much will you end up with over and above the $1,000,000 you started with?a. $10,003.b. $12,063.c. $14,441.d. $16,393.e. $18,219.ANS: DSOLUTION: $1,000,000/$.61 = A$1,639,344 ⨯ $.62 = $1,016,393. Thus, the profit is$16,393.PTS: 137. Assume the following information for a bank quoting on spot exchange rates:Exchange rate of Singapore dollar in U.S. $ = $.60Exchange rate of pound in U.S. $ = $1.50Exchange rate of pound in Singapore dollars = S$2.6Based on the information given, as you and others perform triangular arbitrage, what should logically happen to the spot exchange rates?a. The Singapore dollar value in U.S. dollars should appreciate, the pound value in U.S.dollars should appreciate, and the pound value in Singapore dollars should depreciate.b. The Singapore dollar value in U.S. dollars should depreciate, the pound value in U.S.dollars should appreciate, and the pound value in Singapore dollars should depreciate.c. The Singapore dollar value in U.S. dollars should depreciate, the pound value in U.S.dollars should appreciate, and the pound value in Singapore dollars should appreciate.d. The Singapore dollar value in U.S. dollars should appreciate, the pound value in U.S.dollars should depreciate, and the pound value in Singapore dollars should appreciate.ANS: B PTS: 138. Bank A quotes a bid rate of $.300 and an ask rate of $.305 for the Malaysian ringgit (MYR). Bank Bquotes a bid rate of $.306 and an ask rate of $.310 for the ringgit. What will be the profit for aninvestor who has $500,000 available to conduct locational arbitrage?a. $2,041,667.b. $9,804.c. $500.d. $1,639.ANS: DSOLUTION: $500,000/$.305 = MYR1,639,344 ⨯ $.306 = $501,639. Thus, the profit is$1,639.PTS: 139. Which of the following is an example of triangular arbitrage initiation?a. buying a currency at one bank's ask and selling at another bank's bid, which is higher thanthe former bank's ask.b. buying Singapore dollars from a bank (quoted at $.55) that has quoted the South Africanrand (SAR)/Singapore dollar (S$) exchange rate at SAR2.50 when the spot rate for therand is $.20.c. buying Singapore dollars from a bank (quoted at $.55) that has quoted the South Africanrand/Singapore dollar exchange rate at SAR3.00 when the spot rate for the rand is $.20.d. converting funds to a foreign currency and investing the funds overseas.ANS: C PTS: 140. You just received a gift from a friend consisting of 1,000 Thai baht, which you would like to exchangefor Australian dollars (A$). You observe that exchange rate quotes for the baht are currently $.023, while quotes for the Australian dollar are $.576. How many Australian dollars should you expect to receive for your baht?a. A$39.93.b. A$25,043.48.c. A$553.00.d. none of the aboveANS: ASOLUTION: $.023/$.576 ⨯ THB1,000 = A$39.93.PTS: 141. National Bank quotes the following for the British pound and the New Zealand dollar:Quoted Bid Price Quoted Ask Price Value of a British pound (£) in $ $1.61 $1.62Value of a New Zealand dollar (NZ$) in $ $.55 $.56Value of a British pound inNew Zealand dollars NZ$2.95 NZ$2.96 Assume you have $10,000 to conduct triangular arbitrage. What is your profit from implementing this strategy?a. $77.64.b. $197.53.c. $15.43.d. $111.80.ANS: CSOLUTION: $10,000/$1.62 = £6,172.84 ⨯ 2.95= NZ$18,209.88 ⨯ $.55= $10,015.43.Thus, the profit is $15.43.PTS: 142. Assume the following information:You have $900,000 to invest:Current spot rate of Australian dollar (A$) = $.62180-day forward rate of the Australian dollar = $.64180-day interest rate in the U.S. = 3.5%180-day interest rate in Australia = 3.0%If you conduct covered interest arbitrage, what is the dollar profit you will have realized after 180 days?a. $56,903.b. $61,548.c. $27,000.d. $31,500.ANS: ASOLUTION: $900,000/$.62 = A$1,451,612 ⨯ (1.03) = A$1,495,161 ⨯ $.64 = $956,903.Thus, the profit is $56,903.PTS: 143. Assume the following information:You have $400,000 to invest:Current spot rate of Sudanese dinar (SDD) = $.0057090-day forward rate of the dinar = $.0056990-day interest rate in the U.S. = 4.0%90-day interest rate in Sudan = 4.2%If you conduct covered interest arbitrage, what amount will you have after 90 days?a. $416,000.00.b. $416,800.00.c. $424,242.86.d. $416,068.77.e. none of the aboveANS: DSOLUTION: $400,000/$.0057 = SDD70,175,438.60 ⨯ (1.042)= SDD73,122,807.02 ⨯ $.00569= $416,068.77PTS: 1Exhibit 7-1Assume the following information:You have $300,000 to invest:The spot bid rate for the euro (€) is $1.08The spot ask quote for the euro is $1.10The 180-day forward rate (bid) of the euro is $1.08The 180-day forward rate (ask) of the euro is $1.10The 180-day interest rate in the U.S. is 6%The 180-day interest rate in Europe is 8%44. Refer to Exhibit 7-1. If you conduct covered interest arbitrage, what amount will you have after 180days?a. $318,109.10.b. $330,000.00.c. $312,218.20.d. $323,888.90.e. none of the aboveANS: ASOLUTION: $300,000/$1.10 = €277,777.80 ⨯ (1.08)= €294,444.40 ⨯ $1.08= $318,109.10PTS: 145. Refer to Exhibit 7-1. If you conduct covered interest arbitrage, what is your percentage return after 180days? Is covered interest arbitrage feasible in this situation?a. 7.96%; feasibleb. 6.04%; feasiblec. 6.04%; not feasibled. 4.07%; not feasiblee. 10.00%; feasibleANS: BSOLUTION: $318,109.10/$300,000 1 = 6.04%. Since this rate is slightly higher than theU.S. interest rate of 6%, covered interest arbitrage is feasible.PTS: 146. According to interest rate parity (IRP):a. the forward rate differs from the spot rate by a sufficient amount to offset the inflationdifferential between two currencies.b. the future spot rate differs from the current spot rate by a sufficient amount to offset theinterest rate differential between two currencies.c. the future spot rate differs from the current spot rate by a sufficient amount to offset theinflation differential between two currencies.d. the forward rate differs from the spot rate by a sufficient amount to offset the interest ratedifferential between two currencies.ANS: D PTS: 147. Assume that interest rate parity holds. The Mexican interest rate is 50%, and the U.S. interest rate is8%. Subsequently, the U.S. interest rate decreases to 7%. According to interest rate parity, the peso's forward ____ will ____.a. premium; increaseb. discount; decreasec. discount; increased. premium; decreaseANS: C PTS: 148. If the cross exchange rate of two nondollar currencies implied by their individual spot rates withrespect to the dollar is less than the cross exchange rate quoted by a bank, locational arbitrage ispossible.a. Trueb. FalseANS: F PTS: 149. For locational arbitrage to be possible, one bank's ask rate must be higher than another bank's bid ratefor a currency.a. Trueb. FalseANS: F PTS: 150. Assume locational arbitrage is possible and involves two different banks. The realignment that wouldoccur due to market forces would increase one bank's ask rate and would decrease the other bank's bid rate.a. Trueb. FalseANS: T PTS: 151. Triangular arbitrage tends to force a relationship between the interest rates of two countries and theirforward exchange rate premium or discount.a. Trueb. FalseANS: F PTS: 152. The interest rate on euros is 8%. The interest rate in the U.S. is 5%. The euro's forward rate shouldexhibit a premium of about 3%.a. Trueb. FalseANS: F PTS: 153. Capitalizing on discrepancies in quoted prices involving no risk and no investment of funds is referredto as interest rate parity.a. Trueb. FalseANS: F PTS: 154. Realignment in the exchange rates of banks will eliminate locational arbitrage. More specifically,market forces will increase the ask rate of the bank from which the currency was bought to conduct locational arbitrage and will decrease the bid rate of the bank to which the currency was sold toconduct locational arbitrage.a. Trueb. FalseANS: T PTS: 155. Locational arbitrage involves investing in a foreign country and covering against exchange rate risk byengaging in forward contracts.a. Trueb. FalseANS: F PTS: 156. To capitalize on high foreign interest rates using covered interest arbitrage, a U.S. investor wouldconvert dollars to the foreign currency, invest in the foreign country, and simultaneously sell theforeign currency forward.a. Trueb. FalseANS: T PTS: 157. If interest rate parity (IRP) exists, then the rate of return achieved from covered interest arbitrageshould be equal to the rate available in the foreign country.a. Trueb. FalseANS: F PTS: 158. If interest rate parity (IRP) exists, then triangular arbitrage will not be possible.a. Trueb. FalseANS: F PTS: 159. Forward rates are driven by the government rather than market forces.a. Trueb. FalseANS: F PTS: 160. The foreign exchange market is an over-the-counter market.a. Trueb. FalseANS: F PTS: 161. The yield curve of every country has its own unique shape.a. Trueb. FalseANS: T PTS: 162. Assume the following information:U.S. investors have $1,000,000 to invest:1-year deposit rate offered by U.S. banks = 10%1-year deposit rate offered on British pounds = 13.5%1-year forward rate of Swiss francs = $1.26Spot rate of Swiss franc = $1.30Given this information:a. interest rate parity exists and covered interest arbitrage by U.S. investors results in thesame yield as investing domestically.b. interest rate parity doesn't exist and covered interest arbitrage by U.S. investors results in ayield above what is possible domestically.c. interest rate parity exists and covered interest arbitrage by U.S. investors results in a yieldabove what is possible domestically.d. interest rate parity doesn't exist and covered interest arbitrage by U.S. investors results in ayield below what is possible domestically.ANS: ASOLUTION: $1,000,000/$1.30 = 793,651 pounds ⨯ (1.135) = 900,794 ⨯ $1.26 =$1,100,076.Yield: ($1,100,076 - $1,000,000)/($1,000,000) = 10%.PTS: 163. If quoted exchange rates are the same across different locations, then ____ is not feasible.a. triangular arbitrageb. covered interest arbitrage。

《国际金融》课程教学大纲

《国际金融》课程教学大纲一、教学大纲说明（一）课程的性质、地位、作用和任务《国际金融》是数学系数学与应用数学（金融数学）专业的一门专业选修课，该课程研究的主题涉及国家之间的货币与宏观经济关系。

具体地说，国际金融的主要研究内容包括国际收支的均衡与失衡、汇率决定与汇率波动、国际金融市场与资本流动以及国家之间宏观经济的相互关联等。

该门课程涉及国际金融管理的市场均衡理论、国际金融市场、外汇市场及外汇风险管理、债券的风险度量与息票“剥离”技术、金融创新与衍生工具交易等，较全面地论述了国际金融风险及风险管理技术，从而为后续课程的学习打下良好的基础。

（二）教学目的和要求通过本课程的学习，使学生较好地掌握国际金融市场的业务运作、国际金融的风险度量及风险管理技术，并能将这些理论应用于证券投资、公司理财和风险管理等领域。

掌握：国际金融的均衡模型；国际货币市场、资本市场、外汇市场的业务运作；风险度量和风险管理技术。

理解：汇率形成机制和“套利”原理。

了解：衍生工具交易及衍生工具在风险管理中的应用。

（三）课程教学方法与手段本课程采用讲授、习题课及自学相结合的方法。

基本知识内容由教师讲授，而一些重点计算方法、计算技巧则采用习题课的方式来完成，一些其它知识的补充则通过老师辅导，学生自学来实现。

（四）课程与其它课程的联系国际金融涉及金融学、微积分、高等代数的知识，因而，数学分析、高等代数、金融学是其先修课程。

（五）教材与教学参考书教材：陈信华、殷凤，《国际金融学》，高等教育出版社，2001年教学参考书：1、姜波克，《国际金融新编》，复旦大学出版社，2008年2、石玉川等，《国际贸易术语惯例与案例分析》，对外经济贸易出版社，2007年二、课程的教学内容、重点和难点第一章国际金融管理的市场均衡理论教学内容：利率平价理论、购买力平价理论费雪效应，市场预期理论。

重点：利率平价理论、购买力平价理论，国际费雪效应。

难点：远期汇率与利率、通胀率的关系。

国际金融 International Finance Test Bank_09

Chapter 9—Forecasting Exchange Rates1. Which of the following forecasting techniques would best represent the use of today's forwardexchange rate to forecast the future exchange rate?a. fundamental forecasting.b. market-based forecasting.c. technical forecasting.d. mixed forecasting.ANS: B PTS: 12. Which of the following forecasting techniques would best represent sole use of today's spot exchangerate of the euro to forecast the euro's future exchange rate?a. fundamental forecasting.b. market-based forecasting.c. technical forecasting.d. mixed forecasting.ANS: B PTS: 13. Which of the following forecasting techniques would best represent the use of relationships betweeneconomic factors and exchange rate movements to forecast the future exchange rate?a. fundamental forecasting.b. market-based forecasting.c. technical forecasting.d. mixed forecasting.ANS: A PTS: 14. Which of the following forecasting techniques would best represent the sole use of the pattern ofhistorical currency values of the euro to predict the euro's future currency value?a. fundamental forecasting.b. market-based forecasting.c. technical forecasting.d. mixed forecasting.ANS: C PTS: 15. If a particular currency is consistently declining substantially over time, then a market-based forecastwill usually have:a. underestimated the future exchange rates over time.b. overestimated the future exchange rates over time.c. forecasted future exchange rates accurately.d. forecasted future exchange rates inaccurately but without any bias toward consistentunderestimating or overestimating.ANS: B PTS: 16. According to the text, the analysis of currencies forecasted with use of the forward rate suggests that:a. currencies exhibited about the same mean forecast errors as a percent of the realized value.b. the Canadian dollar can be forecasted by U.S. firms with greater accuracy than othercurrencies.c. the Swiss franc can be forecasted by U.S. firms with greater accuracy than othercurrencies.d. none of the aboveANS: B PTS: 17. Assume the following information:Predicted Value of Realized Value ofPeriod New Zealand Dollar New Zealand Dollar1 $.52 $.502 .54 .603 .44 .404 .51 .50Given this information, the mean absolute forecast error as a percentage of the realized value is about:a. 1.5%.b. 26%.c. 6%.d. 6.5%.e. none of the aboveANS: DSOLUTION: [|$.52 - $.50|/$.50 + |$.54 - $.60|/$.60 + |$.44 - $.40|/$.40 + |$.51 -$.50|/$.50)]/4= [.04 + .10 + .10 + .02]/4= .065 = 6.50%PTS: 18. If it was determined that the movement of exchange rates was not related to previous exchange ratevalues, this implies that a ____ is not valuable for speculating on expected exchange rate movements.a. technical forecast techniqueb. fundamental forecast techniquec. all of the aboved. none of the aboveANS: A PTS: 19. Which of the following is true?a. Forecast errors cannot be negative.b. Forecast errors are negative when the forecasted rate exceeds the realized rate.c. Absolute forecast errors are negative when the forecasted rate exceeds the realized rate.d. None of the above.ANS: D PTS: 110. Which of the following is true according to the text?a. Forecasts in recent years have been very accurate.b. Use of the absolute forecast error as a percent of the realized value is a good measure touse in detecting a forecast bias.c. Forecasting errors are smaller when focused on longer term periods.d. None of the above.ANS: D PTS: 111. A fundamental forecast that uses multiple values of the influential factors is an example of:a. sensitivity analysis.b. discriminant analysis.c. technical analysis.d. factor analysis.ANS: A PTS: 112. When the value from the prior period of an influential factor affects the forecast in the future period,this is an example of a(n):a. lagged input.b. instantaneous input.c. simultaneous input.d. B and CANS: A PTS: 113. Assume a forecasting model uses inflation differentials and interest rate differentials to forecast theexchange rate. Assume the regression coefficient of the interest rate differential variable is -.5, and the coefficient of the inflation differential variable is .4. Which of the following is true?a. The interest rate variable is inversely related to the exchange rate, and the inflationvariable is directly (positively) related to the interest rate variable.b. The interest rate variable is inversely related to the exchange rate, and the inflationvariable is directly related to the exchange rate.c. The interest rate variable is directly related to the exchange rate, and the inflation variableis directly related to the exchange rate.d. The interest rate variable is directly related to the exchange rate, and the inflation variableis directly related to the interest rate variable.ANS: B PTS: 114. Which of the following is not a limitation of fundamental forecasting?a. uncertain timing of impact.b. forecasts are needed for factors that have a lagged impact.c. omission of other relevant factors from the model.d. possible change in sensitivity of the forecasted variable to each factor over time.e. none of the aboveANS: B PTS: 115. Assume that interest rate parity holds. The U.S. five-year interest rate is 5% annualized, and theMexican five-year interest rate is 8% annualized. Today's spot rate of the Mexican peso is $.20. What is the approximate five-year forecast of the peso's spot rate if the five-year forward rate is used as a forecast?a. $.131.b. $.226.c. $.262.d. $.140.e. $.174.ANS: ESOLUTION: (1.05)5/(1.08)5- 1 = -13%; $.20[1 + (-13%)] = $.174PTS: 116. Assume that the forward rate is used to forecast the spot rate. The forward rate of the Canadian dollarcontains a 6% discount. Today's spot rate of the Canadian dollar is $.80. The spot rate forecasted for one year ahead is:a. $.860.b. $.848.c. $.740.d. $.752.e. none of the aboveANS: DSOLUTION: $.80 ⨯ [1 + (-6%)] = $.752PTS: 117. If today's exchange rate reflects all relevant public information about the euro's exchange rate, but notall relevant private information, then ____ would be refuted.a. weak-form efficiencyb. semistrong-form efficiencyc. strong-form efficiencyd. A and Be. B and CANS: D PTS: 118. According to the text, research generally supports ____ in foreign exchange markets.a. weak-form efficiencyb. semistrong-form efficiencyc. strong-form efficiencyd. A and Be. B and CANS: D PTS: 119. Assume that the U.S. interest rate is 11 percent, while Australia's one-year interest rate is 12 percent.Assume interest rate parity holds. If the one-year forward rate of the Australian dollar was used to forecast the future spot rate, the forecast would reflect an expectation of:a. depreciation in the Australian dollar's value over the next year.b. appreciation in the Australian dollar's value over the next year.c. no change in the Australian dollar's value over the next year.d. information on future interest rates is needed to answer this question.ANS: A PTS: 120. If the forward rate was expected to be an unbiased estimate of the future spot rate, and interest rateparity holds, then:a. covered interest arbitrage is feasible.b. the international Fisher effect (IFE) is supported.c. the international Fisher effect (IFE) is refuted.d. the average absolute error from forecasting would equal zero.ANS: B PTS: 121. Which of the following is not a forecasting technique mentioned in your text?a. accounting-based forecasting.b. technical forecasting.c. fundamental forecasting.d. market-based forecasting.ANS: A PTS: 122. The following regression model was estimated to forecast the value of the Malaysian ringgit (MYR):MYR t = a0 + a1INC t- 1 + a2INF t- 1 + μt,where MYR is the quarterly change in the ringgit, INF is the previous quarterly percentage change in the inflation differential, and INC is the previous quarterly percentage change in the income growth differential. Regression results indicate coefficients of a0 = .005; a1 = .4; and a2 = .7. The most recent quarterly percentage change in the inflation differential is -5%, while the most recent quarterlypercentage change in the income differential is 3%. Using this information, the forecast for thepercentage change in the ringgit is:a. 4.60%.b. -1.80%.c. 5.2%.d. -4.60%.e. none of the aboveANS: BSOLUTION: MYR t = .005 + (.4)(.03) + (.7)(-.05) = -1.80%PTS: 123. The following regression model was estimated to forecast the value of the Indian rupee (INR):INR t = a0 + a1INT t + a2INF t- 1 + μt,where INR is the quarterly change in the rupee, INT is the real interest rate differential in period t between the U.S. and India, and INF is the inflation rate differential between the U.S. and India in the previous period. Regression results indicate coefficients of a0 = .003; a1 = -.5; and a2 = .8. Assume that INF t - 1 = 2%. However, the interest rate differential is not known at the beginning of period t and must be estimated. You have developed the following probability distribution:Probability Possible Outcome30% -2%40% -3%30% -4%The expected change in the Indian rupee in period t is:a. 3.40%.b. 0.40%.c. 3.10%.d. 1.70%.e. none of the aboveANS: ASOLUTION: E[INT t] = (-.02)(.3) + (-.03)(.4) + (-.04)(.3) = -3.00%INR t = .003 + (-.5)(-.03) + (.8)(.02) = 3.40%PTS: 124. Huge Corporation has just initiated a market-based forecast system using the forward rate as anestimate of the future spot rate of the Japanese yen (¥) and the Australian dollar (A$). Listed below are the forecasted and realized values for the last period:Currency Forecasted Value Realized ValueAustralian dollar $.60 $.55Japanese yen $.0067 $.0069According to this information and using the absolute forecast error as a percentage of the realized value, the forecast of the yen by Huge Corp. is ____ the forecast of the Australian dollar.a. more accurate thanb. less accurate thanc. more biased thand. the same asANS: ASOLUTION: Absolute forecast error for the Australian dollar = (|.60 - .55|)/.55 = 9.09%Absolute forecast error for the Japanese yen = (|.0067 - .0069|)/.0069 =2.90%Therefore, Huge Corp. has estimated the Japanese yen more accurately byapproximately 6.19%.PTS: 125. Gamma Corporation has incurred large losses over the last ten years due to exchange rate fluctuationsof the Egyptian pound (EGP), even though the company has used a market-based forecast based on the forward rate. Consequently, management believes its forecasts to be biased. The following regression model was estimated to determine if the forecasts over the last ten years were biased:S t = a0 + a1F t -1 + μt,where S t is the spot rate of the pound in year t and F t- 1 is the forward rate of the pound in year t -1.Regression results reveal coefficients of a0 = 0 and a1 = 1.3. Thus, Gamma has reason to believe that its past forecasts have ____ the realized spot rate.a. overestimatedb. underestimatedc. correctly estimatedd. none of the aboveANS: B PTS: 126. Which of the following is not a method of forecasting exchange rate volatility?a. using the absolute forecast error as a percentage of the realized value.b. using the volatility of historical exchange rate movements as a forecast for the future.c. using a time series of volatility patterns in previous periods.d. deriving the exchange rate's implied standard deviation from the currency option pricingmodel.ANS: A PTS: 127. If a foreign currency is expected to ____ substantially against the parent's currency, the parent mayprefer to ____ the remittance of subsidiary earnings.a. weaken; delayb. weaken; expeditec. appreciate; expedited. none of the aboveANS: B PTS: 128. If an MNC invests excess cash in a foreign county, it would like the foreign currency to ____; if anMNC issues bonds denominated in a foreign currency, it would like the foreign currency to ____.a. appreciate; depreciateb. appreciate; appreciatec. depreciate; depreciated. depreciate; appreciateANS: A PTS: 129. Severus Co. has to pay 5 million Canadian dollars for supplies it recently received from Canada.Today, the Canadian dollar has appreciated by 2 percent against the U.S. dollar. Severus hasdetermined that whenever the Canadian dollar appreciates against the U.S. dollar by more than 1percent, it experiences a reversal of 40 percent on the following day. Based on this information, the Canadian dollar is expected to ____ tomorrow, and Severus would prefer to make payment ____.a. depreciate by .8%; todayb. depreciate by .8%; tomorrowc. appreciate by .8%; todayd. appreciate by .8%; tomorrowANS: BSOLUTION: e t +1 = (2%) ⨯ (-40%) = -0.8%PTS: 130. Corporations tend to make only limited use of technical forecasting because it typically focuses on thenear future, which is not very helpful for developing corporate policies.a. Trueb. FalseANS: T PTS: 131. Sulsa Inc. uses fundamental forecasting. Using regression analysis, it has determined the followingequation for the euro:euro t = b0 + b1INF t- 1 + b2INC t- 1= .005 + .9INF t- 1 + 1.1INC t- 1The most recent quarterly percentage change in the inflation differential between the U.S. and Europe was 2 percent, while the most recent quarterly percentage change in the income growth differential between the U.S. and Europe was -1 percent. Based on this information, the forecast for the euro is a(n) ____ of ____%.a. appreciation; 3.4b. depreciation; 3.4c. appreciation; 0.7d. appreciation; 1.2ANS: DSOLUTION: euro t = .005 + .9(.02) + 1.1(-.01) = 1.2%PTS: 132. The U.S. inflation rate is expected to be 4 percent over the next year, while the European inflation rateis expected to be 3 percent. The current spot rate of the euro is $1.03. Using purchasing power parity, the expected spot rate at the end of one year is $____.a. 1.02b. 1.03c. 1.04d. none of the aboveANS: CSOLUTION:E(S t + 1) = $1.03(1.0097) = $1.04PTS: 133. If the one-year forward rate for the euro is $1.07, while the current spot rate is $1.05, the expectedpercentage change in the euro is ____%.a. 1.90b. 2.00c. -1.87d. none of the aboveANS: ASOLUTION: E(e) = 1.07/1.05 - 1 = 1.90%PTS: 134. If both interest rate parity and the international Fisher effect hold, then between the forward rate andthe spot rate, the ____ rate should provide more accurate forecasts for currencies in ____-inflation countries.a. spot; highb. spot; lowc. forward; highd. forward; lowANS: C PTS: 135. If a foreign country's interest rate is similar to the U.S. rate, the forward rate premium or discount willbe ____, meaning that the forward rate and spot rate will provide ____ forecasts.a. substantial; similarb. substantial; very differentc. close to zero; similard. close to zero; very differentANS: C PTS: 136. Factors such as economic growth, inflation, and interest rates are an integral part of ____ forecasting.a. technicalb. fundamentalc. market-basedd. none of the aboveANS: B PTS: 137. Silicon Co. has forecasted the Canadian dollar for the most recent period to be $0.73. The realizedvalue of the Canadian dollar in the most recent period was $0.80. Thus, the absolute forecast error as a percentage of the realized value was ____%.a. 9.6b. -9.6c. 8.8d. -8.8ANS: CSOLUTION:PTS: 138. The absolute forecast error of a currency is ____, on average, in periods when the currency is more____.a. lower; volatileb. higher; stablec. lower; stabled. none of the aboveANS: C PTS: 139. If the foreign exchange market is ____ efficient, then historical and current exchange rate informationis not useful for forecasting exchange rate movements.a. weak-formb. semistrong-formc. strong formd. all of the aboveANS: D PTS: 140. Foreign exchange markets are generally found to be at least ____ efficient.a. weak-formb. semistrong-formc. strong formd. none of the aboveANS: B PTS: 141. MNCs can forecast exchange rate volatility to determine the potential range surrounding theirexchange rate forecast.a. Trueb. FalseANS: T PTS: 142. If the pattern of currency values over time appears random, then technical forecasting is appropriate.a. Trueb. FalseANS: F PTS: 143. Inflation and interest rate differentials between the U.S. and foreign countries are examples ofvariables that could be used in fundamental forecasting.a. Trueb. FalseANS: T PTS: 144. A regression analysis of the Australian dollar value on the inflation differential between the U.S. andAustralia produced a coefficient of .8. Thus, for every 1% increase in the inflation differential, the Australian dollar is expected to depreciate by .8%.a. Trueb. FalseANS: F PTS: 145. The most sophisticated forecasting techniques provide consistently accurate forecasts.a. Trueb. FalseANS: F PTS: 146. If the forward rate is used as an indicator of the future spot rate, the spot rate is expected to appreciateor depreciate by the same amount as the forward premium or discount, respectively.a. Trueb. FalseANS: T PTS: 147. Research indicates that currency forecasting services almost always outperform forecasts based on theforward rate.a. Trueb. FalseANS: F PTS: 148. When measuring forecast performance of different currencies, it is often useful to adjust for theirrelative sizes. Thus, percentages, rather than nominal amounts, are often used to compute forecast errors.a. Trueb. FalseANS: T PTS: 149. The closer graphical points are to the perfect forecast line, the better is the forecast.a. Trueb. FalseANS: T PTS: 150. Foreign exchange markets appear to be strong-form efficient.a. Trueb. FalseANS: F PTS: 151. A motivation for forecasting exchange rate volatility is to obtain a range surrounding the forecast.a. Trueb. FalseANS: T PTS: 152. Two methods to assess exchange rate volatility are the volatility of historical exchange ratemovements and the exchange rate's implied standard deviation from the currency option pricingmodel.a. Trueb. FalseANS: T PTS: 153. Market-based forecasting involves the use of historical exchange rate data to predict future values.a. Trueb. FalseANS: F PTS: 154. Fundamental models examine moving averages over time and thus allow the development of aforecasting rule.a. Trueb. FalseANS: F PTS: 155. A forecasting technique based on fundamental relationships between economic variables and exchangerates, such as inflation, is referred to as technical forecasting.a. Trueb. FalseANS: F PTS: 156. Usually, fundamental forecasting is used for short-term forecasts, while technical forecasting is usedfor longer-term forecasts.a. Trueb. FalseANS: F PTS: 157. If points are scattered evenly on both sides of the perfect forecast line, then the forecast appears to bevery accurate.a. Trueb. FalseANS: F PTS: 158. If foreign exchange markets are strong-form efficient, then all relevant public and private informationis already reflected in today's exchange rates.a. Trueb. FalseANS: T PTS: 159. Exchange rates one year in advance are typically forecasted with almost perfect accuracy for the majorcurrencies, but not for currencies of smaller countries.a. Trueb. FalseANS: F PTS: 160. The potential forecast error is larger for currencies that are more volatile.a. Trueb. FalseANS: T PTS: 161. A forecast of a currency one year in advance is typically more accurate than a forecast one week inadvance since the currency reverts to equilibrium over a longer term period.a. Trueb. FalseANS: F PTS: 162. In general, any key managerial decision that is based on forecasted exchange rates should relycompletely on one forecast rather than alternative exchange rate scenarios.a. Trueb. FalseANS: F PTS: 163. Monson Co., based in the U.S., exports products to Japan denominated in yen. If the forecasted valueof the yen is substantially ____ than the forward rate, Monson Co. will likely decide ____ thepayments.a. higher; to hedgeb. lower; not to hedgec. higher; not to hedged. none of the aboveANS: C PTS: 164. When a U.S.-based MNC wants to determine whether to establish a subsidiary in a foreign country, itwill always accept that project if the foreign currency is expected to appreciate.a. Trueb. FalseANS: F PTS: 165. The following is not a limitation of technical forecasting:a. It's not suitable for long-term forecasts of exchange rates.b. It doesn't provide point estimates or a range of possible future values.c. It cannot be applied to currencies that exhibit random movements.d. It cannot be applied to currencies that exhibit a continuous trend for short-term forecast.ANS: D PTS: 166. The following regression model was estimated to forecast the percentage change in the AustralianDollar (AUD):AUD t = a0 + a1INT t + a2INF t- 1 + μt,where AUD is the quarterly change in the Australian Dollar, INT is the real interest rate differential in period t between the U.S. and Australia, and INF is the inflation rate differential between the U.S. and Australia in the previous period. Regression results indicate coefficients of a0 = .001; a1 = -.8; and a2 = .5. Assume that INF t- 1 = 4%. However, the interest rate differential is not known at the beginning of period t and must be estimated. You have developed the following probability distribution:Probability Possible Outcome20% -3%80% -4%There is a 20% probability that the Australian dollar will change by ____, and an 80% probability it will change by ____.a. 4.5%; 6.1%;b. 6.1%; 4.5%c. 4.5%; 5.3%d. None of the aboveANS: CSOLUTION: Probability 20% = .001 + (-.8)(-.03) + (.5)(.04) = 4.5%Probability 80% = .001 + (-.8)(-.04) + (.5)(.04) = 5.3%PTS: 167. Purchasing power parity is used in:a. technical forecasting.b. fundamental forecasting.c. market-based accounting.d. all of the above.ANS: B PTS: 168. If speculators expect the spot rate of the yen in 60 days to be ____ than the 60-day forward rate on theyen, they will ____ the yen forward and put ____ pressure on the yen's forward rate.a. higher; buy; upwardb. higher; sell; downwardc. higher; sell; upwardd. lower; buy; upwardANS: A PTS: 169. If speculators expect the spot rate of the Canadian dollar in 30 days to be ____ than the 30-day forwardrate on Canadian dollars, they will ____ Canadian dollars forward and put ____ pressure on theCanadian dollar forward rate.a. lower; sell; upwardb. lower; sell; downwardc. higher; sell; upwardd. higher; sell; downwardANS: B PTS: 170. Assume that U.S. annual inflation equals 8%, while Japanese annual inflation equals 5%. If purchasingpower parity is used to forecast the future spot rate, the forecast would reflect an expectation of:a. appreciation of yen's value over the next year.b. depreciation of yen's value over the next year.c. no change in yen's value over the next year.d. information about interest rates is needed to answer this question.ANS: A PTS: 171. Assume that U.S. interest rates are 6%, while British interest rates are 7%. If the international Fishereffect holds and is used to determine the future spot rate, the forecast would reflect an expectation of:a. appreciation of pound's value over the next year.b. depreciation of pound's value over the next year.c. no change in pound's value over the next year.d. not enough information to answer this question.ANS: B PTS: 172. If the foreign exchange market is ____ efficient, then technical analysis is not useful in forecastingexchange rate movements.a. weak-formb. semistrong-formc. strong formd. all of the aboveANS: D PTS: 173. If today's exchange rate reflects any historical trends in Canadian dollar exchange rate movements, butnot all relevant public information, then the Canadian dollar market is:a. weak-form efficient.b. semistrong-form efficient.c. strong-form efficient.d. all of the above.ANS: A PTS: 174. Leila Corporation used the following regression model to determine if the forecasts over the last tenyears were biased:S t = a0 + a1F t- 1 + μt,where S t is the spot rate of the yen in year t and F t- 1 is the forward rate of the yen in year t -1.Regression results reveal coefficients of a0 = 0 and a1 = .30. Thus, Leila Corporation has reason to believe that its past forecasts have ____ the realized spot rate.a. overestimatedb. underestimatedc. correctly estimatedd. none of the aboveANS: A PTS: 175. Assume that U.S. interest rate for the next three years is 5%, 6%, and 7% respectively. Also assumethat Canadian interest rates for the next three years are 3%, 6%, 9%. The current Canadian spot rate is $.840. What is the approximate three-year forecast of Canadian dollar spot rate if the three-yearforward rate is used as a forecast?a. $.840b. $.890c. $.856d. $.854ANS: CSOLUTION: {[(1.05)(1.06)(1.07)]/[(1.03)(1.05)(1.08)]} ⨯ $.84 = $.856PTS: 176. Which of the following is not one of the major reasons for MNCs to forecast exchange rates?a. to decide in which foreign market to invest the excess cash.b. to decide where to borrow at the lowest cost.c. to determine whether to require the subsidiary to remit the funds or invest them locally.d. to speculate on the exchange rate movements.ANS: D PTS: 177. Sensitivity analysis allows for all of the following except:a. accountability for uncertainty.b. focus on a single point estimate of future exchange rates.c. development of a range of possible future values.d. consideration of alternative scenarios.ANS: B PTS: 178. If graphical points lie above the perfect forecast line, than the forecast overestimated the future value.a. Trueb. FalseANS: F PTS: 179. A regression model was applied to explain movements in the Canadian dollar's value over time. Thecoefficient for the inflation differential between the U.S. and Canada was -0.2. The coefficient of the interest rate differential between the U.S. and Canada produced a coefficient of 0.8. Thus, theCanadian dollar depreciates when the inflation differential ____ and the interest rate differential ____.a. increases; increasesb. decreases; increasesc. increases; decreasesd. increases; decreasesANS: C PTS: 180. If the pattern of currency values over time appears random, then technical forecasting is appropriate.a. Trueb. FalseANS: F PTS: 181. Market-based forecasting is based on fundamental relationships between economic variables andexchange rates.。

国际金融-国际金融双语试卷【大学考试试题】

《International Finance 》试卷A一．单项选择题（共10小题，每题2分，共20分）1.Which of the following is not true ：A.a credit is a flow for which the country is paidB.a debit is a flow for which the country must payC.Exports are an example of creditD.Imports are an example of credit2.Which of the following is the most exact meaning of current account balance ： A.the net value of the flows of goods ，services ，income B.the net value of the flows of goods ，servicesC.the net value of the flows of goods ，services ，income ，giftsD.the net value of the flows of goods 3.Which of the following is not true ：A.the spot exchange rate is the price for "immediate" exchangeB.for most countries,spot exchange rate means exchange or delivery in two working daysC.the forward exchange rate is the price now for an exchange that will take place in the futureD.forward exchange rate is the price that is agreed in the future 4.According to exchange rate system,which of the following is true:A.fixed exchange rate system is the system without intervention by government or central banksB.under the floating-rate system a fall in the market price of a currency is called a devaluationC.under the floating-rate system a fall in the market price of a currency is called a appreciationD.under the floating-rate system a fall in the market price of a currency is called a depreciation 5.About IS curve,Which of the following is not true:A.IS curve is for which the money market is in equilibriumB.IS curve slopes downwardC.According to IS curve,the lower interest rate would induce the nation to invest in more domestic real capitalD.IS stands for investment-saving6.About LM curve,Which of the following is true:A.the LM curve is for which the product market is in equilibriumB.the intersection of the IS and LM curve represents equilibrium in both foreign exchange market and product marketC.the official settlements balance is surplus if the IS-LM intersection is to the left of the FE curveD.LM curve slopes downward7.Which of the following is not the components to a country's official reserve assets:A.the country's holdings of foreign exchange assets denominated in the major currencies of the worldB.the country's reserve position with the International Monetary FundC.the country's holdings of special drawing rightsD.the country's government bonds issued by the domestic central bank 8.Which of the following is not the ways to resolve the financial crises:A.rescue packagesB.global contagionC.debt restructuringD.exchange reform 9.According to Purchasing Power Parity theory(PPP),which of the following is true:A.rate of appreciation of the foreign currency nearly equates as the inflation rate of foreign country minus the the inflation rate of domestic countryB.relative PPP may be useful as a guide to why exchange rates change over timesC.PPP posits that the difference between interest rate will be offset by the change in the exchange rateD.relative PPP implies that countries with relatively high inflation rates have currencies whose values tend to appreciate10.According to rescue packages,which of the following is not true: A.rescue packages leads to less moral hazardB.the failure of rescue packages can lead to large lossesC.the two major types of international efforts to resolve financial crises have been rescue packages and debt restructuringD.a large rescue package provide a bailout for lenders二.判断题(共10小题,每个2分,共20分)注意:只要求判断正误,不要求改正 1.hedging is the act of taking a net asset position or a net liability position in a foreign currency 2.the forward rate is the future spot rate3.a currency is at a forward premium by as much as its interest rate is lower4.for an investment in a foreign-curreny-denominated financial asset ，part of the return comes from the asset itself and part from the foreign currency5.relative PPP implies that countries with relatively high inflation rates have currencies whose values tend to depreciate6.Absolute PPP is not related to the law of on price7.crawling peg is a kind of floating exchange rate8.the effects of floating exchange rates on fiscal policy is very clear9.in the fixed exchange rate system,if the country's official settlement balance is in deficit,so the院系：专业班级：姓名：学号：装订线exchange rate value of the country'scurrency is under downward pressure 10.it is best for a country never to borrow from foreign lenders三.名词解释（共4小题，每个5分，共20分）1.direct investment2.managed float3.the law of one price4.forward foreign exchange contract四.计算题（共2小题，每个10分，共20分）1.You observe the following current rates ： Spot exchange rate ：100yen/1$Annual interest rate on 60-day U.S.-dollar-denominated bonds:6% Annual interest rate on 60-day JAPAN-dollar-denominated bonds:4%Tips:Yen is the name of the Japanese currency ；$is the name of the Ameriacan currencyAccording to the c overed parity theory ,calculate the 60-day forward exchange rate.2.Suppose an economy has a marginal propensity to save of 0.3 and marginal propensity to import of 0.1.here is an increase of $2 billion in government spending.Question1:According to the spending multiplier,for a small and open economy,by how much will domestic product increase?Question2:if instead this is a closed economy with a marginal propensity to save of 0.4,if the increase of government spending is still $2 billion,by how much will domestic product increase?五.问答题（共2个小题，每个10分，共20分）1.Once a country's government has decided to have a fixed exchange rate,the government must defend that rate.How does the government defend the fixed rate ?Answer five ways that government can choose.2.Please name four marcoeconomy objectives.And we can divide these marcoeconomy objectives into two categories:internal balance and external balance.Explain the meaning of internal balance and external balance.院系：专业班级：姓名：学号：装订线国际金融-国际金融双语试卷【大学考试试题】《International Finance 》试卷A院系：专业班级：姓名：学号：装订线。

国际金融测试题库

国际金融试题库姜波克国际金融学习题国际收支和国际收支平衡表一、单项选择题1.资本项目的利息收入应列入下列国际收支平衡表的哪一个项目中A.资本项目B.经常项目C.国际储备D.净误差与遗漏2.国际旅游、保险引起的收支属于下列国际收支平衡表中的哪一个项目A.经常项目B.国际储备C.净误差与遗漏D.资本项目3.资本项目中的长期资本是指借贷期为多长的资本A.期限不定B.一年以内C.一年D.一年以上4.当国际收支平衡表中的收入大于支出时，就在“净误差与遗漏”的哪一方加上相差的数字。

A.右方B.左方C.收入方D.支出方5.—国国民收入增加，会引起进口商品与劳务增加，导致国际收支出现下列哪一种情况A.不确定B.不变C.逆差D.顺差6.狭义的国际收支仅指A.贸易收支B.经常项目收支C.外汇收支D.全部对外交易7.国际货币基金组织对国际收支的解释属于下列哪一种收支概念A.狭义的B.广义的C.事前的D.规划性的8.下列哪一项属于劳务收支项目A进口商品支出B国外捐款C侨民汇款D对外投资利润9.特别提款权不能直接用于A.换取外汇B.换回本币C.贸易支付D.归还贷款10.到岸价格中的运费和保险费属于A.无形收支B.有形收支C.转移收支D.资本项目收支11、国际收支基本差额是指（）。

A、贸易差额B、经常项目差额C、经常项目差额与长期资本项目差额之和D、经常项目差额与短期资本项目差额之和12、根据《国际收支手册》第五版规定，记在资本金融帐户的是（A、服务收入B、股本收入C、债务核销D、债务收入o）13、根据国际收支的定义，以下机构的工作人员属于一国居民的是（）。

A、联合国C、IMFB、一国国外大使馆D、世界银行集团14、一国经济状况为经济膨胀和经常帐户顺差，采用调整政策是（）。

A、紧缩性的货币政策B、扩张性财政政策C、紧缩性的货币政策和紧缩性的财政政策D、扩张性的货币政策和紧缩性的财政政策15、根据国际收支平衡表的记帐原则，属于借方项目的是（）。

国际财务管理作业Chapter 1 - Test Bank (注释版)

Chapter 1—Multinational Financial Management: An Overview1. The commonly accepted goal of the MNC (跨国公司) is to:a. maximize short-term earnings.b. maximize shareholder wealth (股东财富).c. minimize risk.d. A and C.e. maximize international sales.ANS: B PTS: 12. With regard to corporate goals, an MNC (跨国公司) is mostly concerned with maximizing ____, and apurely domestic firm (纯粹的国内企业) is mostly concerned with maximizing ____.a. shareholder wealth (股东财富); short-term earningsb. shareholder wealth (股东财富); shareholder wealth (股东财富)c. short-term earnings; sales volumed. short-term earnings; shareholder wealth (股东财富)ANS: B PTS: 13. For the MNC (跨国公司), agency costs (代理成本) are typically:a. non-existent.b. larger than agency costs (代理成本) of a small purely domestic firm (纯粹的国内企业).c. smaller than agency costs (代理成本) of a small purely domestic firm (纯粹的国内企业).d. the same as agency costs (代理成本) of a small purely domestic firm (纯粹的国内企业).ANS: B PTS: 14. Which of the following (下列哪个) could reduce agency problems (代理问题) for an MNC (跨国公司)?a. stock options as managerial compensation.b. hostile takeover (收购) threat.c. investor monitoring.d. all of the above (上述全部) are forms of corporate control that could reduce agencyproblems (代理问题) for an MNC (跨国公司).ANS: D PTS: 15. The valuation (评价) of an MNC (跨国公司) should rise when an event causes the expected cashflows (预期的现金流) from foreign to ____ and when foreign currencies denominating these cashflows are expected to ____.a. decrease; appreciateb. increase; appreciatec. decrease; depreciated. increase; depreciateANS: B PTS: 16. Which of the following (下列哪个) theories identifies specialization (专业化) as a reason forinternational business (国际商务)?a. Theory of Comparative Advantage (比较优势理论) (比较优势).b. Imperfect markets (不完全的市场) theory.c. product cycle (产品周期) theory.d. none of the aboveANS: A PTS: 17. Which of the following (下列哪个) theories identifies the non-transferability of resources (资源的不可转移性) as a reason for international business (国际商务)?a. Theory of Comparative Advantage (比较优势理论) (比较优势).b. Imperfect markets (不完全的市场) theory.c. product cycle (产品周期) theory.d. none of the aboveANS: B PTS: 18. Which of the following (下列哪个) theories suggests that firms seek to penetrate new markets (进入新的市场) over time?a. Theory of Comparative Advantage (比较优势理论) (比较优势).b. Imperfect markets (不完全的市场) theory.c. product cycle (产品周期) theory.d. none of the aboveANS: C PTS: 19. Which of the following (下列哪个) industries would most likely take advantage of lower costs insome less developed foreign countries?a. assembly line production.b. specialized professional services.c. nuclear missile planning.d. planning for more sophisticated computer technology.ANS: A PTS: 110. Due to the risks involved in international business (国际商务), firms should:a. only consider international business (国际商务) in major countries.b. maintain international business (国际商务) to no more than 20% of total business.c. maintain international business (国际商务) to no more than 35% of total business.d. none of the aboveANS: D PTS: 111. A product cycle (产品周期) is the process by which a firm provides a specialized sales or servicestrategy, support assistance, and possibly an initial investment in the franchise in exchange for periodic fees.a. Trueb. FalseANS: F PTS: 112. Licensing (许可) is the process by which a firm provides its technology (copyrights, patents,trademarks, or trade names) in exchange for fees or some other specified benefits.a. Trueb. FalseANS: T PTS: 113. The agency costs (代理成本) of an MNC (跨国公司) are likely to be lower if it:a. scatters its subsidiaries across many foreign countries.b. increases its volume of international business (国际商务).c. uses a centralized management style.d. A and B.ANS: C PTS: 114. An MNC (跨国公司) may be more exposed to agency problems (代理问题) if most of its shares areheld by:a. a few mutual funds (共同基金)b. a widely dispersed set of individual investorsc. a few pension funds (养老基金)d. all of the above (上述全部) would prevent agency problems (代理问题)ANS: B PTS: 115. The Sarbanes-Oxley Act improves corporate governance (公司治理) of MNCs (跨国公司) because it:a. makes executives more accountable for verifying financial statementsb. eliminates stock options as a form of compensationc. ties executive compensation to firm performanced. places a limit on the amount of funds that managers can spendANS: A PTS: 116. MNCs (跨国公司) can improve their internal control (内部控制) process by all of the following,except (除了):a. establishing a centralized data base of informationb. ensuring that all data are reported consistently among subsidiariesc. ensuring that the MNC (跨国公司) always borrows from countries where interest rates arelowestd. using a system that checks internal data for unusual discrepanciesANS: C PTS: 117. Franchising (特许经营) is the process by which national governments sell state owned operations tocorporations and other investors.a. Trueb. FalseANS: F PTS: 118. The parent of MNC (跨国公司) can implement compensation plans (补偿计划) that directly rewardthe subsidiary (子公司) managers for enhancing the value (价值) of the MNC (跨国公司).a. Trueb. FalseANS: T PTS: 119. If a publicly-traded MNC (跨国公司)'s managers make poor decisions that reduce its value (价值), itmay encourage other firms to acquire it.a. Trueb. FalseANS: T PTS: 120. Institutional investors such as mutual funds (共同基金) or pension funds (养老基金) which have largeholdings (控股) of an MNC (跨国公司)'s stock do not normally want to take control of it and therefore have no influence over management of the MNC (跨国公司).a. Trueb. FalseANS: F PTS: 121. In comparing exporting (出口) to direct foreign investment (国外直接投资) (DFI), an exporting (出口)operation will likely incur ____ fixed production costs (固定生产成本) and ____ transportation costs (运输成本) than DFI.a. higher; higherb. higher; lowerc. lower; lowerd. lower; higherANS: D PTS: 122. Which of the following (下列哪个) is an example of direct foreign investment (国外直接投资)?a. exporting (出口) to a country.b. establishing Licensing (许可) arrangements in a country.c. purchasing existing companies in a country.d. investing directly (without brokers) in foreign stocks.ANS: C PTS: 123. According to the text (教科书), a disadvantage of Licensing (许可) is that:a. it prevents a firm from importing (进口).b. it is difficult to ensure quality control of the production process.c. it prevents a firm from exporting (出口).d. none of the aboveANS: B PTS: 124. ____ are most commonly classified as a direct foreign investment (国外直接投资).a. Foreign acquisitions (国外并购)b. Purchases of international stocksc. Licensing (许可) agreementsd. Exporting (出口) transactionsANS: A PTS: 125. Imperfect markets (不完全的市场) represent conditions under which factors of production (生产要素)are immobile.a. Trueb. FalseANS: T PTS: 126. The Sarbanes-Oxley Act (SOX) was enacted in 2002 required MNCs (跨国公司) and other firms toimplement an internal reporting process that could be easily monitored by executives and the board of directors.a. Trueb. FalseANS: T PTS: 127. If markets were perfect, then labor and other costs of production would be perfectly stable (nomovement across borders).a. Trueb. FalseANS: F PTS: 128. The valuation (评价) of an MNC (跨国公司) is reduced if the required return on its investments inforeign countries is reduced.a. Trueb. FalseANS: F PTS: 129. Which of the following (下列哪个) is not mentioned in the text (教科书) as an additional riskresulting from international business (国际商务)?a. exchange rate fluctuations.b. political risk (政治风险).c. interest rate risk.d. exposure (曝险) to foreign economies.ANS: C PTS: 130. Licensing (许可) obligates a firm to provide ____, while Franchising (特许经营) obligates a firm toprovide ____.a. a specialized sales or service strategy; its technologyb. its technology; a specialized sales or service strategyc. its technology; its technologyd. a specialized sales or service strategy; a specialized sales or service strategye. its technology; an initial investmentANS: B PTS: 131. Which of the following (下列哪个) is not a way in which agency problems (代理问题) can be reducedthrough corporate control?a. executive compensation.b. threat of hostile takeover (收购).c. acquisition of a foreign subsidiary (子公司).d. monitoring by large shareholders.ANS: C PTS: 132. The goal of a multinational corporation (MNC (跨国公司)) is the maximization of shareholder wealth(股东财富).a. Trueb. FalseANS: T PTS: 133. A centralized management style, where major decisions about a foreign subsidiary (子公司) are madeby the parent company, results in an increase in agency costs (代理成本).a. Trueb. FalseANS: F PTS: 134. If a U.S. firm sets up a plant in Mexico to benefit from (受益于) low cost labor, it will likely have acomparative advantage (比较优势) over other firms in Mexico that sell the same product.a. Trueb. FalseANS: F PTS: 135. Although MNCs (跨国公司) may need to convert currencies occasionally, they do not face anyexchange rate risk (汇率风险), as exchange rates are stable over time.a. Trueb. FalseANS: F PTS: 136. One of the most prevalent factors conflicting with the realization of the goal of an MNC (跨国公司) isthe existence of agency problems (代理问题).a. Trueb. FalseANS: T PTS: 137. A centralized management style for an MNC (跨国公司) results in relatively (相对) high agency costs(代理成本).a. Trueb. FalseANS: F PTS: 138. The Imperfect markets (不完全的市场) theory states that factors of production (生产要素) aresomewhat immobile, allowing firms to capitalize on a foreign country's resources.a. Trueb. FalseANS: T PTS: 139. If a U.S.-based MNC (跨国公司) focused completely on importing (进口), then its valuation (评价)would likely be adversely affected (受到不利影响) if most currencies were expected to appreciate against the dollar over time.a. Trueb. FalseANS: T PTS: 140. The acquisition of a foreign subsidiary (子公司) is commonly considered by MNCs (跨国公司)because the cost is less expensive than establishing a new subsidiary (子公司) of the same size.a. Trueb. FalseANS: F PTS: 141. If a U.S.-based MNC (跨国公司) focused completely on exporting (出口), then its valuation (评价)would likely be adversely affected (受到不利影响) if most currencies were expected to appreciate against the dollar over time.a. Trueb. FalseANS: F PTS: 142. If markets were perfect, then labor and other costs of production would be easily transferable.a. Trueb. FalseANS: T PTS: 143. International trade (国际贸易):a. is a relatively (相对) conservative approach to foreign market penetration (市场渗透).b. entails minimal risk.c. does not require large amount of investment.d. all of the above (上述全部).ANS: D PTS: 144. Assume that (假设) an American firm wants to engage in international business (国际商务) withoutmajor investment (重大投资) in the foreign country. Which method is least (最不)appropriate in this situation?a. International trade (国际贸易)b. Licensing (许可)c. Franchising (特许经营)d. Direct foreign investment (国外直接投资)ANS: D PTS: 145. The valuation (评价) of MNC (跨国公司) accounts for all the cash flows received by the foreignsubsidiaries plus all the cash flows remitted by the subsidiaries.a. Trueb. FalseANS: F PTS: 146. The MNC (跨国公司)'s value (价值) depends on all of the following, except (除了):a. MNC (跨国公司)'s required rate of return (必要回报率)b. Amount of MNC (跨国公司)'s cash flows in particular currencyc. The exchange rate at which cash flows are converted to dollarsd. The value (价值) of MNC (跨国公司) depends on all of the above (上述全部) factorsANS: D PTS: 147. Which of the following (下列哪个) is not an example of political risk (政治风险)?a. Government may impose taxes on subsidiary (子公司)b. Government may impose barriers on subsidiary (子公司)c. Consumers may boycott the MNC (跨国公司)d. Consumers' income levels will decrease, thus decreasing consumption.ANS: D PTS: 148. A microeconomic perspective focuses on external forces such as economic conditions that can affectthe value (价值) of an MNC (跨国公司).a. Trueb. FalseANS: F PTS: 149. Assume that (假设) an MNC (跨国公司) has a subsidiary (子公司) in Italy, which exports its productsto various countries in Europe. Since all of the countries where it exports use Euro as their currency, this MNC (跨国公司) is not subject to the exchange rate risk (汇率风险).a. Trueb. FalseANS: F PTS: 150. International trade (国际贸易) generally results in ____ exposure (曝险) to international political risk(政治风险) and ____ exposure (曝险) to international economic conditions, when compared to other methods of international business (国际商务).a. higher; lowerb. higher; higherc. lower; higherd. lower; lowerANS: D PTS: 151. Assume that (假设) Boca Co. wants to expand its business to Japan, and wants complete control overthe operations in Japan. Which method of international business (国际商务) is most appropriate for Boca Co?a. Joint ventureb. Licensing (许可)c. Partial acquisition of existing Japanese firmd. Establishment (建立) of Japanese subsidiary (子公司)ANS: B PTS: 152. A decentralized management style of MNC (跨国公司) results in relatively (相对) high agency costs(代理成本).a. Trueb. FalseANS: T PTS: 153. The Establishment (建立) of a new subsidiary (子公司) is commonly considered by MNCs (跨国公司)because the cost is less expensive than acquiring a foreign subsidiary (子公司) of the same size.a. Trueb. FalseANS: T PTS: 154. Assume that (假设) Live Co. has expected cash flows (预期的现金流) of $200,000 from domesticoperations, SF200,000 from Swiss operations, and 150,000 euros from Italian operations at the end of the year. The Swiss franc's value (价值) and euro's value (价值) are expected to be $.83 and $1.29 respectively, at the end this year. What are the expected dollar cash flows of Live Co?a. $200,000b. $559,500c. $582,500d. $393,500ANS: B PTS: 155. Saller Co. has a subsidiary (子公司) in Mexico. The expected cash flows (预期的现金流) in pesos tobe received in the future from this subsidiary (子公司) have not changed since last month, but thevaluation (评价) of Saller Co. has declined since last month. What could've caused this decline invalue (价值)?a. A weaker Mexican economyb. Lower Mexican interest ratesc. Depreciation of the Mexican pesod. Appreciation of the Mexican peso.ANS: C PTS: 156. Jensen Co. wants to establish a new subsidiary (子公司) in Mexico that will sell computers to Mexicancustomers and remit earnings back to the U.S. parent. The value (价值) of this project will befavorably affected if the value (价值) of the peso ____ while it establishes the new subsidiary (子公司) and ____ when the subsidiary (子公司) starts operations.a. depreciates; appreciatesb. appreciates; appreciatesc. appreciates; depreciatesd. depreciates; depreciatesANS: A PTS: 157. A macroeconomic perspective focuses on the financial management decisions that affect the value (价值) of MNC (跨国公司).a. Trueb. FalseANS: F PTS: 158. An MNC (跨国公司) will always use the same required rate of return (必要回报率) in the valuation(评价) of foreign projects, as it would for its domestic projects.a. Trueb. FalseANS: F PTS: 159. Livingston Co. has a subsidiary (子公司) in Korea. The subsidiary (子公司) reinvests half of its netcash flows into operations and remits half to the parent. Livingston's expected cash flows (预期的现金流) from domestic business are $100,000 and the Korean subsidiary (子公司) is expected to generate 100 million Korean won at the end of the year. The expected value (价值) of won is $.0012. What are the expected dollar cash flows of Livingston Co.?a. $100,000b. $200,000c. $160,000d. $60,000ANS: C PTS: 160. A U.S.-based MNC (跨国公司) has many foreign subsidiaries in Europe and does not expect toincrease its investment there. Its value (价值) should increase if the value (价值) of the euro weakens over time.a. Trueb. FalseANS: F PTS: 161. If managers of foreign subsidiaries make decisions that maximize the value (价值)s of their respectivesubsidiaries, they automatically maximize the value (价值) of the entire corporation.a. Trueb. FalseANS: F PTS: 162. A decentralized management style, where subsidiary (子公司) managers make the relevant decisionsregarding their subsidiary (子公司), may result in better decision making, as subsidiary (子公司) managers are generally better informed about their subsidiary (子公司)'s operations.a. Trueb. FalseANS: T PTS: 163. U.S.-based MNCs (跨国公司) are typically not monitored by mutual funds (共同基金) and pensionfunds (养老基金), as these institutions (机构) rarely hold stock in MNCs (跨国公司).a. Trueb. FalseANS: F PTS: 164. The Sarbanes-Oxley Act ensures a more transparent process for managers to report on the productivityand financial condition of their firm.a. Trueb. FalseANS: T PTS: 165. The Theory of Comparative Advantage (比较优势理论) (比较优势) begins by assuming that a givenfirm first becomes established in its home country and may subsequently penetrate foreign markets via geographic or product differentiation.a. Trueb. FalseANS: F PTS: 166. Under the Imperfect markets (不完全的市场) Theory, it is assumed that factors of production (生产要素) are entirely mobile, so that firms can capitalize on a foreign country's resources.a. Trueb. FalseANS: F PTS: 167. Under the Product cycle (产品周期) Theory, foreign demand can be initially satisfied by exporting (出口).a. Trueb. FalseANS: T PTS: 168. Licensing (许可) allows firms to use their technology in foreign markets without a major investment(重大投资) in foreign countries.a. Trueb. FalseANS: T PTS: 169. International trade (国际贸易) is the most common form of direct foreign investment (国外直接投资)(DFI).a. Trueb. FalseANS: F PTS: 170. When the parent's home currency (本国货币) is weak, remitted funds from foreign subsidiaries willconvert to a smaller amount of the home currency (本国货币).a. Trueb. FalseANS: F PTS: 171. A purely domestic firm (纯粹的国内企业) may be affected by exchange rate fluctuations if it faces atleast (最不)some foreign competition.a. Trueb. FalseANS: T PTS: 172. One form of an exposure (曝险) to political risk (政治风险) is terrorism (恐怖主义).a. Trueb. FalseANS: T PTS: 173. The goal of a multinational corporation (MNC (跨国公司)) isa. The minimization of taxes remitted from foreign subsidiaries.b. The Establishment (建立) of subsidiaries in any country where operations would provide areturn over and above the cost of capital, even if better projects are available domestically.c. The maximization of shareholder wealth (股东财富).d. The maximization of social benefits resulting from actions such as the employment offoreign managers.ANS: C PTS: 174. Agency costs (代理成本) faced by multinational corporations (MNCs (跨国公司)) may be larger thanthose faced by purely domestic firm (纯粹的国内企业)s becausea. Monitoring of managers located in foreign countries is more difficult.b. Foreign subsidiary (子公司) managers raised in different cultures may not follow uniformgoals.c. MNCs (跨国公司) are relatively (相对) large.d. All of the above (上述全部)e. A and B onlyANS: D PTS: 175. Which of the following (下列哪个) is not one of the more common methods used by MNCs (跨国公司) to improve their internal control (内部控制) process?a. Establishing a centralized database of informationb. Ensuring that all data are reported consistently among subsidiariesc. Speeding the process by which all departments and all subsidiaries have access to the datathat they needd. Making executives more accountable for financial statements by personally verifying theiraccuracye. All of the above (上述全部) are common methods used by MNCs (跨国公司) to improvetheir internal control (内部控制) process.ANS: E PTS: 176. Which of the following (下列哪个) is not mentioned in the text (教科书) as a theory of internationalbusiness (国际商务)?a. Theory of Comparative Advantage (比较优势理论)b. Imperfect markets (不完全的市场) Theoryc. Product cycle (产品周期) Theoryd. Globalization of Business Theorye. All of the above (上述全部) are mentioned in the text (教科书) as theories of internationalbusiness (国际商务)ANS: D PTS: 177. The most risky method(s) by which firms conduct international business (国际商务) is (are):a. Franchising (特许经营).b. The acquisitions of existing operations (现有业务的收购).c. The Establishment (建立) of new subsidiaries.d. All of the above (上述全部)e. B and C onlyANS: E PTS: 178. The least (最不)risky method by which firms conduct international business (国际商务) is:a. Franchising (特许经营).b. The acquisitions of existing operations (现有业务的收购).c. International trade (国际贸易).d. The Establishment (建立) of new subsidiaries.e. Licensing (许可)ANS: C PTS: 179. Which of the following (下列哪个) does not constitute (构成) a form of direct foreign investment (国外直接投资)?a. Franchising (特许经营)b. International trade (国际贸易)c. Joint ventures (合资企业)d. Acquisitions of existing operationse. Establishment (建立) of new foreign subsidiariesANS: B PTS: 1。

国际金融课件internationalfinance

06
中国国际金融的实践与展望
中国国际金融业在规模和业务范围上不断扩大，成为全球金融市场的重要参与者。
中国国际金融业在推动经济增长、促进国际贸易和投资等方面发挥了重要作用。
改革开放以来，中国国际金融业经历了从无到有、从小到大的发展历程，逐步建立起较为完善的金融机构体系和金融市场体系。
中国国际金融的发展历程与现状
Global financial markets facilitate the flow of capital across borders, allowing for the efficient allocation of resources and the hedging of risks.
Regional financial markets serve specific geographical regions and are often associated with trade blocs or economic unions.
01
国际金融危机的定义
由于国际金融市场上的过度投机、金融监管缺失等原因，导致国际金融市场出现大规模动荡，影响各国经济的稳定。
02
国际金融危机的传染机制
通过贸易、金融和信息等渠道，将危机从一个国家传递到另一个国家。
国际金融危机及其传染机制
1
2
3
通过监测和分析国际金融市场的相关信息，及时发现潜在的风险点，采取应对措施。
02
03
04
05
Main International Financial Centers and Their Characteristics 主要国际金融中心及其特点
ห้องสมุดไป่ตู้

testbankinternationalfinancemcqchap

Fundamentals of Multinational Finance, 3e (Moffett)The International Monetary SystemChapter 3Multiple Choice and True/False Questions1) The price of one country's currency in units of another currency or commodity is the________.A) foreign interest rateB) foreign currency exchange rateC) par valueD) international rateAnswer: BCurrency TerminologyTopic:SkillRecognition:2) A country that regulates the rate at which its currency is exchanged for all othercurrencies is considered to have a ________ exchange rate system.A) fixed or managedB) floating or flexibleC) forwardD) spotAnswer: ACurrency TerminologyTopic:RecognitionSkill:3) You check the currency web page and find that the Japanese yen is trading at a rateof113 yen per dollar. This rate of exchange is typically referred to as the ________.A) forward rateB) par rateC) spot rateD) 113 rateAnswer: CCurrency TerminologyTopic:ConceptualSkill:4) The drop in value of a currency pegged to gold or another currency is known as ________.A) revaluationB) depreciationC) deteriorationD) devaluationAnswer: DCurrency TerminologyTopic:ConceptualSkill:5) A ________ currency is expected to devalue or depreciate relative to major currencies.A) soft or weakB) hard or strongC) deterioratedD) devaluedAnswer: ACurrency TerminologyTopic:ConceptualSkill:6) The increase in value of a currency pegged to gold or another currency is known as________.A) appreciationB) revaluationC) strengthenedD) hardenedAnswer: BTopicCurrency Terminology:SkillConceptual:7) A currency that has increased in foreign exchange value relative to a floating ratecurrency has ________.A) revaluedB) violated international trade agreementsC) appreciatedD) deterioratedAnswer: CCurrency TerminologyTopic:SkillConceptual:8) A currency that has decreased in foreign exchange value relative to a floating ratecurrency has ________.A) revaluedB) appreciatedC) devaluedD) depreciatedAnswer: DCurrency TerminologyTopic:ConceptualSkill:9) The ________, as of December 2007, is the common currency for 13 of the countries thatare members of the European Union.A) SDR (Special Drawing Rights)B) ECU (European Currency Unit)C) EuroD) YugoAnswer: CCurrency TerminologyTopic:RecognitionSkill:10) A United States firm had chosen to deposit money in a British bank and have it denominatedin . dollars. This is an example of a (an) ________ deposit.A) imPoundedB) EuroyenC) EuropoundD) EurodollarAnswer: DCurrency TerminologyTopic:SkillRecognition:11) Under the gold standard of currency exchange that existed from 1879 to 1914, an ounceof gold cost $ in . dollars and £ in British pounds. Therefore, the exchange rate of pounds per dollar under this fixed exchange regime wasA) £$.B) £$.C) always changing because the price of gold was always changing.D) unknown because there is not enough information to answer this question.Answer: BGold StandardTopic:SkillAnalytical:12) World War I caused the suspension of the gold standard for fixed international exchangerates because the warA) cost too much money.B) interrupted the free movement of gold.C) lasted too long.D) used gold as the main ingredient in armament plating.Answer: BGold StandardTopic:SkillConceptual:13) A speculative technique whereby the speculator sells an asset that he/she doesn't own,such as a currency, to another party for delivery at a future date is called ________.A) selling aheadB) selling behindC) selling shortD) selling longAnswer: CTopicCurrency Speculation:ConceptualSkill:14) Which of the following investment strategies will allow me to make a profit if Ianticipate that the value of the Euro, a currency that I do not own, is going to fall over the next 90 days and I am correct in my predictionA) Sell Euros short.B) Buy Euros short.C) Sell dollars short.D) Buy Euros long.Answer: ATopicCurrency Speculation:ConceptualSkill:15) The post WWII international monetary agreement that was developed in 1944 is known asthe ________.A) United NationsB) League of NationsC) Yalta AgreementD) Bretton Woods AgreementAnswer: DTopicBretton Woods Agreement:SkillRecognition:16) Another name for the International Bank for Reconstruction and Development isA) the Recon Bank.B) the European Monetary System.C) the Marshall Plan.D) the World Bank.Answer: DBretton Woods AgreementTopic:SkillRecognition:17) The International Monetary Fund (IMF)A) in recent years has provided large loans to Russia, South Korea, and Brazil.B) was created as a result of the Bretton Woods Agreement.C) aids countries with balance of payment and exchange rate problems.D) is all of the above.Answer: DBretton Woods AgreementTopic:SkillRecognition:18) Under the terms of Bretton Woods countries tried to maintain the value of theircurrencies to within 1% of a hybrid security made up of the . dollar, British pound, and Japanese yen.Answer: FALSEBretton Woods AgreementTopic:SkillRecognition:19) Members of the International Monetary Fund may settle transactions among themselvesby transferring Special Drawing Rights (SDRs).Answer: TRUEBretton Woods AgreementTopic:SkillRecognition:20) Today, the United States has been ejected from the International Monetary Fund forrefusal to pay annual dues.Answer: FALSEBretton Woods AgreementTopic:SkillAnalytical:21) Which of the following led to the eventual demise of the fixed currency exchange rateregime worked out at Bretton WoodsA) widely divergent national monetary and fiscal policies among member nationsB) differential rates of inflation across member nations.C) several unexpected economic shocks to member nationsD) all of the aboveAnswer: DExchange Rate RegimesTopic:SkillConceptual:22) The IMFs exchange rate regime classification identifies ________ as the most rigidlyfixed, and ________ as the least fixed.A) exchange arrangements with no separate legal tender; independent floatingB) crawling pegs; managed floatC) currency board arrangements; independent floatingD) pegged exchange rates within horizontal bands; exchange rates within crawling pegsAnswer: AExchange Rate RegimesTopic:SkillRecognition:23) Which of the following correctly identifies exchange rate regimes from less fixed tomore fixedA) independent floating, currency board arrangement, crawling pegsB) independent floating, currency board arrangement, managed floatC) independent floating, crawling pegs, exchange arrangements with no separate legaltenderD) exchange arrangements with no separate legal tender, currency board arrangement,crawling pegsAnswer: CTopic:Exchange Rate RegimesSkillConceptual:24) As of January 2002, the Independent Floating regime of exchange rate classificationswas used by over 75% of the 186 countries identified by the IMF.Answer: FALSETopicExchange Rate Regimes:RecognitionSkill:25) A small economy country whose GDP is heavily dependent on trade with the United Statescould use a (an) ________ exchange rate regime to minimize the risk to their economy that could arise due to unfavorable changes in the exchange rate.A) pegged exchange rate with the United StatesB) pegged exchange rate with the EuroC) independent floatingD) managed floatAnswer: ATopicExchange Rate Regimes:ConceptualSkill:26) The United States currently uses a ________ exchange rate regime.A) crawling pegB) peggedC) floatingD) fixedAnswer: CTopicExchange Rate Regimes:RecognitionSkill:27) Based on the premise that, other things equal, countries would prefer a fixed exchangerate: Variable rates provide stability in international prices for the conduct of trade.Answer: FALSETopicExchange Rate Regimes:ConceptualSkill:28) Based on the premise that, other things equal, countries would prefer a fixed exchangerate, which of the following statements is NOT trueA) Fixed rates provide stability in international prices for the conduct of trade.B) Fixed exchange rate regimes necessitate that central banks maintain largequantities of international reserves for use in the occasional defense of the fixed rate.C) Fixed rates are inherently inflationary in that they require the country to followloose monetary and fiscal policies.D) Stable prices aid in the growth of international trade and lessen exchange raterisks for businesses.Answer: CExchange Rate RegimesTopic:SkillRecognition:29) Which of the following is not an attribute of the "ideal" currencyA) monetary independenceB) full financial integrationC) exchange rate stabilityD) All are attributes of an ideal currency.Answer: DTopicExchange Rate Regimes:ConceptualSkill:30) If exchange rates were fixed, investors and traders would be relatively certain aboutthe current and near future exchange value of each currency.Answer: TRUEExchange Rate RegimesTopic:SkillConceptual:31) The authors discuss the concept of the "Impossible Trinity" or the inability to achievesimultaneously the goals of exchange rate stability, full financial integration, and monetary independence. If a country chooses to have a pure float exchange rate regime, which two of the three goals is a country most able to achieveA) monetary independence and exchange rate stabilityB) exchange rate stability and full financial integrationC) full financial integration and monetary independenceD) A country cannot attain any of the exchange rate goals with a pure float exchangerate regime.Answer: CCurrency RegimesTopic:ConceptualSkill:32) The attempt by many countries to stimulate their domestic economies and to gain accessto global financial markets, is causing more and more countries to choose a ________ or ________ exchange rate regime.A) floating; monetary unionB) monetary union; full capital controlsC) full capital controls; floatingD) pegged; fixedAnswer: ACurrency RegimesTopic:RecognitionSkill:33) Beginning in 1991 Argentina conducted its monetary policy through a currency board.In January 2002, Argentina abandoned the currency board and allowed its currency to float against other currencies. The country took this step becauseA) the Argentine Peso had grown too strong against major trading powers thus thecurrency board policies were hurting the domestic economy.B) the United States required the action as a prerequisite to finalizing a free tradezone with all of North, South, and Central America.C) the Argentine government lost the ability to maintain the pegged relationship asin fact investors and traders perceived a lack of equality between the ArgentinePeso and the . dollar.D) all of the above.Answer: CTopicCurrency Regimes:RecognitionSkill:34) In January 2002, the Argentine Peso was officially valued at a rate of USD. More recentlythe exchange rate is Peso USD, thus, the Argentine Peso ________ against the . dollar.A) strengthenedB) weakenedC) remained neutralD) all of the aboveAnswer: BTopicCurrency Regimes:AnalyticalSkill:35) On September 9, 2000 Ecuador officially replaced its national currency, the Ecuadoriansucre, with the . dollar. This practice is known as ________.A) bi-currencyismB) sucrerizationC) a Yankee bailoutD) dollarizationAnswer: DCurrency RegimesTopic:SkillConceptual:36) You have been hired as a consultant to the central bank for a country that has for manyyears suffered from repeated currency crises and depends heavily on the U.S. financial and product markets. Which of the following policies would have the greatesteffectiveness for reducing currency volatility of the client country with the United StatesA) dollarizationB) an exchange rate pegged to the . dollarC) an exchange rate with a fixed price per ounce of goldD) an internationally floating exchange rateAnswer: ATopicCurrency Regimes:ConceptualSkill:37) A bank holidayA) occurs every day after 3:00 .B) is a term used when a country's central government freezes (temporarily) alldeposits in commercial banks.C) is observed in Europe every fourth Friday.D) occurs the last three working days of the year to prepare financial statementsfor tax purposes.Answer: BBank HolidayTopic:RecognitionSkill:38) Which of the following is NOT an argument against dollarizationA) The dollarized country's central bank can no longer act as a lender of last resort.B) The dollarized country can no longer profit from seignorage (the ability to profitfrom the creation of money within its economy).C) The dollarized country losses sovereignty over its own monetary policy.D) All of the above are arguments against dollarization from the viewpoint of theaffected country.Answer: DTopicCurrency Regimes:ConceptualSkill:39) The Euro currency is fixed against other currencies on the international currencyexchange markets, but allows member country currencies to float against each other.Answer: FALSEThe EuroTopic:RecognitionSkill:40) Even though the Euro currency has been designed and printed, it is still not availablefor general use by the public, except for tourists, in the European Union.Answer: FALSEThe EuroTopic:SkillRecognition:41) Which of the following is NOT a required convergence criteria to become a full memberof the European Economic and Monetary Union (EMU)A) National birthrates must be at or lower per person.B) The fiscal deficit should be no more than 3% of GDP.C) Nominal inflation should be no more than % above the average inflation rate forthe three members with the lowest inflation rates in the previous year.D) Government debt should be no more than 60% of GDP.Answer: AThe EuroTopic:SkillRecognition:42) Which of the following groups of countries have replaced their individual currencieswith the EuroA) France, Germany, and the United KingdomB) Sweden, Denmark, and GreeceC) The United Kingdom, The Netherlands, and AustriaD) Germany, The Netherlands, and ItalyAnswer: DTopicThe Euro:RecognitionSkill:43) The tremendous international mobility of financial capital is forcing emerging marketnations to adopt one of two polarized choices, free float or currency board, for theirforeign currency exchange regimes. Which of the following would NOT be a reason for an emerging nation to choose to have their currency freely floatA) The country desires to lose political influence on the valuation of their currency.B) The emerging nation desires an independent monetary policy.C) The emerging nation is willing to tradeoff exchange rate stability to gain freemovement of capital.D) All of the above.Answer: ATopic :Emerging MarketsSkill :Conceptual44) According to the authors, what is the single most important mandate of the EuropeanCentral BankA) Promote international trade for countries within the European Union.B) Price, in euros, all products for sale in the European Union.C) Promote price stability within the European Union.D) Establish an EMU trade surplus with the United States.Answer: CTopic :The EuroSkill :Conceptual45) Ignoring transaction costs and based solely on the change in currency exchange rates,a speculator who sold short a two-year contract for the euro (receiving dollars) inJanuary 2006 would have realized a profit upon the exercise of the contract in January 2008.Answer: FALSETopicThe Euro:AnalyticalSkill:46) Which of the following is a way in which the euro affects marketsA) Countries within the Euro zone enjoy cheaper transaction costs.B) Currency risks and costs related to exchange rate uncertainty are reduced.C) Consumers and business enjoy price transparency and increased price-basedcompetition.D) All of the above.Answer: DThe EuroTopic:ConceptualSkill:47) A special Drawing Right is a unit of account established byA) the Federal Reserve Bank.B) the World Bank.C) the International Monetary Fund.D) the European Central Bank.Answer: CTopicInternational Monetary Fund:RecognitionSkill:48) A currency is considered hard ifA) it is expected to be revalued or appreciate.B) it is expected to be devalued or depreciate.C) it is backed in part by a precious metal such as gold.D) it is difficult to trade on the international currency exchange markets.Answer: ACurrency TerminologyTopic:SkillRecognition:49) Under a fixed exchange rate regime, the government of the country is officiallyresponsible forA) intervention in the foreign exchange markets using gold and reserves.B) setting the fixed/parity exchange rate.C) maintaining the fixed/parity exchange rate.D) all of the above.Answer: DCurrency RegimesTopic:RecognitionSkill:50) ________ are domestic currencies of one country on deposit in a second country.A) LIBORsB) EurocurrenciesC) Global Federal FundsD) FOREX FundsAnswer: BTopicEurocurrency Market:RecognitionSkill:51) Which of the following is NOT an example of a Eurocurrency depositA) British pounds deposited outside of the United KingdomB) Japanese yen deposited outside of JapanC) . dollars deposited outside of the United StatesD) All of the above could be considered Eurocurrency deposits.Answer: DEurocurrency MarketTopic:RecognitionSkill:52) Which of the following would NOT be a valuable Eurocurrency market transactionA) Ford Motor Company holds temporary excess dollars in a London bank.B) Dell Computer borrows dollars from a German bank to fund accounts receivable.C) Volkswagen borrows Euros in France to finance working capital.D) A Russian oil firm deposits dollars in Moscow Narodny Bank in London.Answer: CTopicEurocurrency Market:ConceptualSkill:53) Generally, Eurocurrency loans are based on the London Interbank Offered Rate (LIBOR)and have a lower offering rate becauseA) Eurocurrency markets are a wholesale market.B) transaction sizes are for very large amounts of money.C) market participants have very good credit ratings.D) all of the above.Answer: DTopicEurocurrency Market:ConceptualSkill:54) Eurocurrency markets are subject to more stringent reserve requirements than thoseimposed on U.S. banks by the Federal Reserve.Answer: FALSEEurocurrency MarketTopic:SkillConceptual:55) For at least two years from early 2006 to early 2008, the euro maintained a strong andsteady rise in value against the . dollar (USD). Which of the following were NOT a contributing factor in the assent of the euro and the decline in the dollarA) severe U.S. balance of payments deficitsB) a general weakening of the dollar after the attacks of September 11, 2001C) large U.S. balance of payment surplusesD) All of the above were contributing factors.Answer: CDollar DepreciationTopic:ConceptualSkill:56) In London an investor can buy a . dollar for £. In New York the £/$ exchange rateis the same as found in London. Given this information, what is the $/£exchange rate in New YorkA) $£B) £$C) £$D) $£Answer: AExchange RatesTopic:AnalyticalSkill:57) What was the annualized forward premium on the pound if the spot rate on January 20,2005 was £$ and the 180 day forward rate was £$A) %B) %C) %D) %Answer: ATopic:Forward PremiumAnalyticalSkill:Essay Questions1) The mobility of international capital flows is causing emerging market nations to choosebetween a free-floating currency exchange regime and a currency board (or taken to thelimit, dollarization). Describe how each of the regimes would work and identify at leasttwo likely economic results for each regime.Answer: With free float the exchange rate is market determined and beyond the control of the country's central bank or government. The economic results are likely tobe an independent monetary policy, free movement of capital, but less stabilityin the exchange rate. Such instability may be more than an emerging marketcountry's small financial market can bear. A currency board on the other handis an implied legislative commitment to fix the foreign exchange rate with aspecific currency, generally the country's major trading partner. Dollarizationis taking this policy to the extreme whereby the emerging market nation forgoesits currency for that of its major trading partner. An example of Dollarizationis Panama using . dollars as the official Panamanian currency. With such a regime,independent monetary policy is lost and political influence on monetary policyis eliminated. Further, the benefits accruing to countries as a result of theability to print its own money, seignorage, is lost.2) On January 4, 1999 the member nations of the EMU introduced a new unified currency,the euro, to replace the individual national currencies of many member nations. Identifyand explain several of the arguments made both for and against the euro. Do you thinkthe euro has proven to be a "good" idea Why/Why notAnswer: Arguments for the euro include a stable currency for trading among the several member nations and eliminating the need to exchange currencies to makecross-border transactions among member nations thus increasing transactionalefficiency and eliminating exchange rate risk. Other advantages includeunification of the several European markets, transparency of prices in the membercountries, and a larger market to compete against the United States.Arguments against the euro include a loss of national heritage and pride in losing a long-held domestic currency. Governments lose exclusive control overseignorage, lack of national autonomy in fiscal and monetarypolicy, and inequality among member states in their production and financial market strengths and weaknesses. Member nations are forced to go along with the group even if a particular action does not maximize value to the individual countries. As for whether the euro has been good or bad, this is an opinion piece for each student.3) Most Western nations were on the gold standard for currency exchange rates from 1876until 1914. Today we have several different exchange rate regimes in use, but most larger economy nations have freely floating exchange rates today and are not obligated to convert their currency into a predetermined amount of gold on demand. Occasionally several parties still call for the "good old days" and a return to the gold standard.Develop an argument as to why this is a good idea.Answer: The gold standard forces a nation to maintain sufficient reserves of gold to back its currency's value. This helps control inflation, as a country cannot printadditional money without sufficient gold to back it up. The gold standard easesinternational transactions as there is little uncertainly about exchange ratesfor trade with foreign countries. A stable currency could also act as a deterrantto the large trade deficits developed by some countries such as the United States.。

1、下载文档前请自行甄别文档内容的完整性，平台不提供额外的编辑、内容补充、找答案等附加服务。
2、"仅部分预览"的文档,不可在线预览部分如存在完整性等问题,可反馈申请退款(可完整预览的文档不适用该条件!)。
3、如文档侵犯您的权益，请联系客服反馈,我们会尽快为您处理(人工客服工作时间：9:00-18:30)。

Chapter 18—Long-Term Financing1. Ideally, a firm desires to denominate bonds in a currency that:a. exhibits a low interest rate and is expected to appreciate.b. exhibits a low interest rate and is expected to depreciate.c. exhibits a high interest rate and is expected to depreciate.d. exhibits a high interest rate and is expected to appreciate.ANS: B PTS: 12. Floating-rate bonds are often issued with a floating coupon rate that is tied to LIBOR.a. Trueb. FalseANS: T PTS: 13. A U.S. firm could issue bonds denominated in euros and partially hedge against exchange rate riskby:a. invoicing its exports in U.S. dollars.b. requesting that any imports ordered by the firm be invoiced in U.S. dollars.c. invoicing its exports in euros.d. requesting that any imports ordered by the firm be invoiced in the currency denominatingthe bonds.ANS: C PTS: 14. Firm X conducts all business transactions in U.S. dollars. If it issues two sets of bonds, eachdenominated in a different foreign currency, it can:a. reduce exchange rate risk relative to issuing a bond denominated in U.S. dollars.b. reduce exchange rate risk relative to issuing a bond denominated in a single foreigncurrency.c. A and Bd. none of the aboveANS: B PTS: 15. Simulation is useful in the bond-denomination decision since it can:a. precisely compute the cost of financing with bonds denominated in a single foreigncurrency.b. precisely compute the cost of financing with bonds denominated in a portfolio of foreigncurrencies.c. assess the probability that a bond denominated in a foreign currency will be less costlythan a bond denominated in the home currency.d. A and BANS: C PTS: 16. An interest rate swap between two firms of different countries enables the exchange of ____ for____.a. fixed-rate payments; floating-rate paymentsb. stock; interest deductions on taxesc. interest payments on loans; ownership of debt of less developed countriesd. interest payments on loans; stockANS: A PTS: 17. If U.S. firms issue bonds in ____, the dollar outflows to cover fixed coupon payments increase asthe dollar ____.a. a foreign currency; weakensb. dollars; strengthensc. a foreign currency; strengthensd. dollars; weakensANS: A PTS: 18. The yields offered on newly issued bonds denominated in dollars have:a. consistently increased over the last 10 years.b. consistently decreased over the last 10 years.c. remained stable.d. none of the aboveANS: D PTS: 19. When ignoring exchange rate risk, bond yields:a. are the same for all currencies.b. are consistently higher for all non-U.S. bonds than U.S. bonds.c. are consistently lower for all non-U.S. bonds than U.S. bonds.d. none of the aboveANS: D PTS: 110. A U.S. firm has received a large amount of cash inflows periodically in Swiss francs as a result ofexporting goods to Switzerland. It has no other business outside the U.S. It could best reduce its exposure to exchange rate risk by:a. issuing Swiss franc-denominated bonds.b. purchasing Swiss franc-denominated bonds.c. purchasing U.S. dollar-denominated bonds.d. issuing U.S. dollar-denominated bonds.ANS: A PTS: 111. A U.S. firm has a Canadian subsidiary that remits some of its earnings to the parent on an annualbasis. The firm has no other foreign business. The firm could best reduce its exposure to exchange rate risk by issuing bonds denominated in:a. U.S. dollars.b. Canadian dollars.c. multiple currencies.d. euros.ANS: B PTS: 112. If the currency denominating a foreign bond depreciates against the firm's home currency, thefunds needed to make coupon payments will increase.a. Trueb. FalseANS: F PTS: 113. An interest rate swap is commonly used by an issuer of fixed-rate bonds to:a. convert to floating-rate debt.b. hedge exchange rate risk.c. lock in the interest payments on debt.d. remove the default risk of its debt.ANS: A PTS: 114. A currency swap between two firms of different countries enables the exchange of ____ for ____at periodic intervals.a. stock; one currencyb. stock; a portfolio of foreign currenciesc. one currency; stock optionsd. one currency; another currencyANS: D PTS: 115. Assume a U.S.-based subsidiary wants to raise $1,000,000 by issuing a bond denominated inPakistani rupees (PKR). The current exchange rate of the rupee is $.02. Thus, the MNC needs____ rupees to obtain the $1,000,000 needed.a. 50,000,000b. 20,000c. 1,000,000d. none of the aboveANS: ASOLUTION: $1,000,000/$.02 = PKR50,000,000PTS: 116. An MNC issues ten-year bonds denominated in 500,000 Philippines pesos (PHP) at par. The bondshave a coupon rate of 15%. If the peso remains stable at its current level of $.025 over the lifetime of the bonds and if the MNC holds the bonds until maturity, the financing cost to the MNC will be:a. 10.0%.b. 12.5%.c. 15.0%.d. none of the aboveANS: CSOLUTION: Since the bonds are issued at par, and since the exchange rate remains stableover the life of the bonds and the bonds are held until maturity, the financingcost will be exactly the coupon rate of the bond.PTS: 117. New Hampshire Corp. has decided to issue three-year bonds denominated in 5,000,000 Russianrubles at par. The bonds have a coupon rate of 17%. If the ruble is expected to appreciate from its current level of $.03 to $.032, $.034, and $.035 in years 1, 2,and 3, respectively, what is thefinancing cost of these bonds?a. 17%.b. 23.18%.c. 22.36%.d. 23.39%.ANS: DSOLUTION:Annual Cost ofYear 1 Year 2 Year 3 Financing Payments in rubles 850,000 850,000 5,850,000Forecasted exchange rate of ruble $.032 $.034$.035Payments in dollars $27,200 $28,900 $204,750 23.39% PTS: 118. In a(n) ____ swap, two parties agree to exchange payments associated with bonds; in a(n) ____swap, two parties agree to periodically exchange foreign currencies.a. interest rate; currencyb. currency; interest ratec. interest rate; interest rated. currency; currencyANS: A PTS: 119. Good Company prefers variable to fixed rate debt. Bad Company prefers fixed to variable ratedebt. Assume the following information for Good and Bad Companies:Fixed Rate Bond Variable Rate Bond Good Company 10% LIBOR + 1%Bad Company 12% LIBOR + 1.5%Given this information:a. an interest rate swap will probably not be advantageous to Good Company because it canissue both fixed and variable debt at more attractive rates than Bad Company.b. an interest rate swap attractive to both parties could result if Good Company agreed toprovide Bad Company with variable rate payments at LIBOR + 1% in exchange for fixedrate payments of 10.5%.c. an interest rate swap attractive to both parties could result if Bad Company agreed toprovide Good Company with variable rate payments at LIBOR + 1% in exchange for fixedrate payments of 10.5%.d. none of the aboveANS: B PTS: 120. ____ are beneficial because they may reduce transaction costs. However, MNCs may not be ableto obtain all the funds that they need.a. Private placementsb. Domestic equity offeringsc. Global equity offeringsd. Global debt offeringsANS: A PTS: 121. Most MNCs obtain equity funding:a. in foreign countries.b. in their home country.c. through global offerings.d. through private placements.ANS: B PTS: 122. Some firms may be uncomfortable issuing bonds denominated in foreign currencies becauseexchange rates are ____ difficult to predict over ____ time horizons.a. less; longb. more; shortc. more; longd. none of the aboveANS: C PTS: 123. If the foreign currency that was borrowed appreciates over time, an MNC will need fewer funds tocover the coupon or principal payments. [Assume the MNC has no other cash flows in thatcurrency.]a. Trueb. FalseANS: F PTS: 124. U.S.-based MNCs whose foreign subsidiary generates large earnings may be able to offsetexposure to exchange rate risk by issuing bonds denominated in the subsidiary's local currency.a. Trueb. FalseANS: T PTS: 125. Countries in emerging markets such as in Latin America tend to have ____ interest rates, and sothe yields offered on bonds issued in those countries is ____.a. low; highb. high; lowc. high; highd. none of the aboveANS: C PTS: 126. MNCs can use ____ to reduce exchange rate risk. This occurs when two parties providesimultaneous loans with an agreement to repay at a specified point in the future.a. forward contractsb. currency swapsc. parallel loansd. none of the aboveANS: C PTS: 127. An upward-sloping yield curve for a foreign country means that annualized yields there are ____for short-term debt than for long-term debt. The yield curve in this country reflects ____.a. higher; several periodsb. lower; several periodsc. higher; a specific point in timed. lower; a specific point in timeANS: D PTS: 128. The ____ for a given country represents the annualized yield offered on debt for variousmaturities.a. LIBORb. yield curvec. parallel loand. interest rate swapANS: B PTS: 129. When an MNC finances in a currency that matches its long-term cash inflows using a relatively____ maturity, the MNC is exposed to ____ risk.a. short; interest rateb. long; interest ratec. short; exchange rated. none of the aboveANS: B PTS: 130. Some MNCs use a country's yield curve to compare annualized rates among debt maturities, sothat they can choose a maturity that has a relatively low rate.a. Trueb. FalseANS: T PTS: 131. As a(n) ____ to an interest rate swap, a financial institution simply arranges a swap between twoparties.a. ultrapartyb. brokerc. counterpartyd. none of the aboveANS: B PTS: 132. In general, the ____ rate payer in a plain vanilla swap believes interest rates are going to ____.a. fixed; declineb. floating; declinec. floating; increased. none of the aboveANS: B PTS: 133. In a(n) ____ swap, the fixed rate payer has the right to terminate the swap.a. callableb. putablec. amortizingd. zero-couponANS: A PTS: 134. In a(n) ____ swap, the notional value is increased over time.a. amortizingb. basisc. zero-coupond. accretionANS: D PTS: 135. A ____ gives its owner the right to enter into a swap.a. basis swapb. swaptionc. callable swapd. putable swapANS: B PTS: 136. Because bonds denominated in foreign currencies rarely have lower yields, U.S. corporationsrarely consider issuing bonds denominated in those currencies.a. Trueb. FalseANS: F PTS: 137. The actual financing cost of a U.S. corporation issuing a bond denominated in euros is affected bythe euro's value relative to the U.S. dollar during the financing period.a. Trueb. FalseANS: T PTS: 138. A floating coupon rate is an advantage to the bond issuer during periods of increasing interestrates.a. Trueb. FalseANS: F PTS: 139. An MNC issuing pound-denominated bonds may be completely insulated from exchange rate riskassociated with the bond if its foreign subsidiary makes the coupon and principal payments of the bond with its pound receivables.a. Trueb. FalseANS: T PTS: 140. If an MNC uses a long-term forward contract to hedge the exchange rate risk associated with abond denominated in euros, it would sell euros forward.a. Trueb. FalseANS: F PTS: 141. Currency swaps, whereby two parties exchange currencies at a specified point in time for aspecified price, are often used by MNCs to hedge against interest rate risk.a. Trueb. FalseANS: F PTS: 142. A limitation of interest rate swaps is that there is a risk to each swap participant that thecounterparticipant could default on his payments.a. Trueb. FalseANS: T PTS: 143. Many MNCs simultaneously swap interest payments and currencies.a. Trueb. FalseANS: T PTS: 144. A parallel loan represents simultaneous loans provided by two parties with an agreement to repayat a specified point in the future.a. Trueb. FalseANS: T PTS: 145. Since yield curves are identical across countries, MNCs rarely consider them when deciding on thematurity of bonds denominated in a foreign currency.a. Trueb. FalseANS: F PTS: 146. Because bonds denominated in foreign currencies rarely have lower yields, U.S. corporationsrarely consider issuing bonds denominated in those currencies.a. Trueb. FalseANS: F PTS: 147. If the currency denominating a foreign bond depreciates against the firm's home currency over thelifetime of the bond, the funds needed to make coupon payments will increase.a. Trueb. FalseANS: F PTS: 148. Even if the interest rate associated with a foreign country is higher than the domestic interest rate,the financing costs of a foreign bond will always be lower than the financing rate of a domestic bond as long as the currency depreciates over the lifetime of a bond.a. Trueb. FalseANS: F PTS: 149. If the currency of a foreign currency-denominated bond ____, the funds needed to make couponpayments will ____.a. appreciates; increaseb. depreciates; decreasec. appreciates; decreased. depreciates; increasee. A and BANS: E PTS: 150. Generally, the financing costs associated with a foreign currency-denominated bond will be ____volatile than the financing costs of a domestic bond because of ____.a. more; exchange rate movementsb. less; exchange rate movementsc. less; global economic conditionsd. none of the aboveANS: A PTS: 151. ____ swaps are often used by companies to hedge against ____ rate risk.a. Currency; interestb. Interest; interestc. Interest; exchanged. Currency; exchangee. B and DANS: E PTS: 152. ____ are commonly used to hedge interest rate risk.a. Currency swapsb. Parallel loansc. Interest rate swapsd. Forward contractse. None of the aboveANS: C PTS: 153. In a(n) ____ swap, the notional value is reduced over time.a. accretionb. amortizingc. forwardd. zero-coupone. putableANS: B PTS: 154. A(n) ____ swap is entered into today, but the swap payments start at a specific future point intime.a. accretionb. amortizingc. forwardd. zero-coupone. putableANS: C PTS: 155. A callable swap gives the ____ payer the right to terminate the swap; the MNC would exercise thisright if interest rates ____ substantially.a. floating-rate; riseb. floating-rate; fallc. fixed-rate; rised. fixed-rate; falle. none of the aboveANS: D PTS: 1。