Question 1

If one British pound can purchase $2.00 U.S.dollars,how many British pounds can one U.S.dollar buy?

Accepted Answer

A)   0.5600
B)   0.5550
C)   0.4000
D)   0.5000
E)   0.4850F) A) and D)
G) A) and C)

Question 2

Legal and economic differences among countries,although important,do NOT pose significant problems for most multinational corporations when they coordinate and control worldwide operations and subsidiaries.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following are reasons why companies move into international operations?

Accepted Answer

A)   To take advantage of lower production costs in regions where labor costs are relatively low.
B)   To develop new markets for the firm's products.
C)   To better serve their primary customers.
D)   Because important raw materials are located abroad.
E)   All of the above.F) B) and E)
G) C) and D)

Question 4

Exchange rate risk is the risk that the cash flows from a foreign project,when converted to the parent company's currency,will be worth less than was originally projected because of exchange rate changes.

Accepted Answer

A) True 
 B)False

Question 5

If the spot rate of the Israeli shekel is 5.51 shekels per dollar and the 180-day forward rate is 5.76 shekels per dollar,then the forward rate for the Israeli shekel is selling at a(n) ______________ to the spot rate.

Accepted Answer

A)   3.68% premium
B)   3.72% premium
C)   4.99% discount
D)   4.54% discount
E)   5.58% discountF) B) and D)
G) D) and E)

Question 6

Suppose one British pound can purchase 1.86 U.S.dollars today in the foreign exchange market,and currency forecasters predict that the U.S.dollar will depreciate by 12.0% against the pound over the next 30 days.How many dollars will a pound buy in 30 days?

Accepted Answer

A)   $2.1665
B)   $2.2082
C)   $1.8957
D)   $2.0832
E)   $2.3540F) A) and D)
G) A) and E)

Question 7

If one U.S.dollar buys 0.61 euro,how many dollars can you purchase for one euro?

Accepted Answer

A)   1.5574
B)   1.4262
C)   1.6393
D)   1.2623
E)   1.4590F) B) and D)
G) A) and B)

Question 8

In Japan,90-day securities have a 4% annualized return and 180-day securities have a 5% annualized return.In the United States,90-day securities have a 4% annualized return and 180-day securities have an annualized return of 4.5%.All securities are of equal risk,and Japanese securities are denominated in terms of the Japanese yen.Assuming that interest rate parity holds in all markets,which of the following statements is most CORRECT?

Accepted Answer

A)   The yen-dollar spot exchange rate equals the yen-dollar exchange rate in the 90-day forward market.
B)   The yen-dollar spot exchange rate equals the yen-dollar exchange rate in the 180-day forward market.
C)   The yen-dollar exchange rate in the 90-day forward market equals the yen-dollar exchange rate in the 180-day forward market.
D)   The yen-dollar exchange rate in the 180-day forward market equals the yen-dollar exchange rate in the 90-day spot market.
E)   The relationship between spot and forward interest rates cannot be inferred.F) B) and E)
G) None of the above

Question 9

If one U.S.dollar sells for 0.53 British pound,how many dollars should one British pound sell for?

Accepted Answer

A)   2.0566
B)   2.0943
C)   1.6792
D)   1.4906
E)   1.8868F) B) and D)
G) B) and E)

Question 10

Because political risk is seldom negotiable,it cannot be explicitly addressed in multinational corporate financial analysis.

Accepted Answer

A) True 
 B)False

Exam 17: Multinational Financial Management

Suppose one British pound can purchase 1.86 U.S.dollars today in the foreign exchange market,and currency forecasters predict that the U.S.dollar will depreciate by 12.0% against the pound over the next 30 days.How many dollars will a pound buy in 30 days?

Correct Answer
verified

If one British pound can purchase $2.00 U.S.dollars,how many British pounds can one U.S.dollar buy?

Correct Answer
verified

Legal and economic differences among countries,although important,do NOT pose significant problems for most multinational corporations when they coordinate and control worldwide operations and subsidiaries.

Correct Answer
verified

If the spot rate of the Israeli shekel is 5.51 shekels per dollar and the 180-day forward rate is 5.76 shekels per dollar,then the forward rate for the Israeli shekel is selling at a(n) ______________ to the spot rate.

Correct Answer
verified

Which of the following are reasons why companies move into international operations?

Correct Answer
verified

Exchange rate risk is the risk that the cash flows from a foreign project,when converted to the parent company's currency,will be worth less than was originally projected because of exchange rate changes.

Correct Answer
verified

Because political risk is seldom negotiable,it cannot be explicitly addressed in multinational corporate financial analysis.

Correct Answer
verified

Correct Answer
verified

If one U.S.dollar buys 0.61 euro,how many dollars can you purchase for one euro?

Correct Answer
verified

If one U.S.dollar sells for 0.53 British pound,how many dollars should one British pound sell for?

Correct Answer
verified

Exam 17: Multinational Financial Management

Suppose one British pound can purchase 1.86 U.S.dollars today in the foreign exchange market,and currency forecasters predict that the U.S.dollar will depreciate by 12.0% against the pound over the next 30 days.How many dollars will a pound buy in 30 days?

Correct AnswerverifiedShow Answer

If one British pound can purchase $2.00 U.S.dollars,how many British pounds can one U.S.dollar buy?

Correct AnswerverifiedShow Answer

Legal and economic differences among countries,although important,do NOT pose significant problems for most multinational corporations when they coordinate and control worldwide operations and subsidiaries.

Correct AnswerverifiedShow Answer

If the spot rate of the Israeli shekel is 5.51 shekels per dollar and the 180-day forward rate is 5.76 shekels per dollar,then the forward rate for the Israeli shekel is selling at a(n) ______________ to the spot rate.

Correct AnswerverifiedShow Answer

Which of the following are reasons why companies move into international operations?

Correct AnswerverifiedShow Answer

Exchange rate risk is the risk that the cash flows from a foreign project,when converted to the parent company's currency,will be worth less than was originally projected because of exchange rate changes.

Correct AnswerverifiedShow Answer

Because political risk is seldom negotiable,it cannot be explicitly addressed in multinational corporate financial analysis.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If one U.S.dollar buys 0.61 euro,how many dollars can you purchase for one euro?

Correct AnswerverifiedShow Answer

If one U.S.dollar sells for 0.53 British pound,how many dollars should one British pound sell for?

Correct AnswerverifiedShow Answer

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