1. The American Corp. has recently signed (end of June) a contract to sell 1,000,000 cell
phones to a Japanese mobile company. Delivery and payment of the phones will take place
in December. Total price = 11,000,000 JPY
Current exchange rate (June) : 1 USD = 0.5150 JPY
December future price for 1 USD = 0.6740 JPY
What will be the profit/loss per unit if the exchange rate of USD/JPY = 0.5510
A. Profit, 0.123
B. Profit, 0.159
C. Loss, 0.036
D. Loss, 0.159
2. Which statement is not correct?
a. Financial markets can arrange funds from places of available money to where are in
demand.
b. The increase in exchange rate (direct quotation) costs the importers less than they had
planned.
c. The value of one currency against the other currency is determined in the forex.
d. The forward rate is the determined rate to convert currency in the future time.
3. A foreign exchange with a US bank took sell position of 5,000,000 British pounds when the
US dollar/British pound exchange rate was 1.55. The exchange rate has changed to 1.61 later.
Which stastement is correct?
a. Exporter will benefit from the increaseof exchange rate
b. Importer will benefit from the increaseof exchange rate
c. The value of US dollar has remained unchanged
d. All of the above are correct
4. What is the correct movement of the exchange rate in two points of time?
January: EUR/USD = 0.4602
February: EUR/USD = 0.4709
a. Depreciate, 2,33%
b. Appreciate, 2.42%
c. Appreciate, 2.21%
d. None of the above
5. A Japanese company has an account receivable ( receive payment) of USD 1 milion due in
90 days. The spot and forward exchange rate are JPY/USD 112 and 110.8 respectively. If the
company sells the USD forward for 90 days, how many JPY will it receive in 3 months from
now?
A. 9091 JPY
B. 9025 JPY
C. 9201 JPY
D. 9100.2 JPY
6. What are the motives of one company to raise the capital in the international credit
market?
A. Company has a limited fund in local country
B. Company has a lower cost a financing due to foreign loan.
C. Company earns higher return in the foreign market.
D. All above are correct.
7. how much of usd amount you receive when converting C$200, where the Canadian dollar
is worth $.60?
a. $130
b. $120
c. $125
d. $333
8. Assume that Australian company has an expected of $30,000 from US market and GBP
35,000 from British market. What is the expected cash inflows of the company? The US
dollar’s value and British pound’s value are AUD 1.65 and AUD 3.10 respectively.
A. AUD 29,472
B. USD 29,472
C. AUD 158,000
D. AUD 158,000
9. Which statenment is true?
A. More liquid currencies will have the larger bid-ask spread.
B. Money market interest rates are different between developing countries and poor
countries.
C. A company can buy a sell forward to hedge future receivables from exchange rate risk.
D. All of the above are correct.
10. Assuming that the Euro – USD exchange rate is 0.9. If a German buys an American
automobile for $30,000. What would the automobile cost if the EUR depreciated by 20
percent against USD?
A. 45600
B. 41666
C. 21600
D. 27777