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International Financial Management (Đại học Tôn Đức Thắng)
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1. An increase in U.S. interest rates relative to German interest rates would likely ____
the U.S. demand for euros and ____ the supply of euros for sale.
increase; increase
increase; reduce
reduce; increase
reduce; reduce
2. A put option on British pounds has a strike (exercise) price of $1.25. The present
exchange rate is $1.32. This put option can be referred to as:
at the money
in the money
out of the money
at a discount
3. Assume that the income levels in U.K. start to decrease, while U.S. income levels
remain unchanged/ This will place ____ pressure on the value of British pound/ Also,
assume that U.S. interest rates decrease, while the British pound remains unchanged/ This
will place ____ pressure on the value of British pound
upward; downward
upward; upward
downward; upward
downward; downward
4. A reduction in the current account deficit will place ____ pressure on the home
currency value, other things equal.
downward
upward
upward or downward (depending on the size of the deficit)
no
5. Which of the following would cause a decrease in the value of the U.S. dollar as
compared to the Pound?
A decrease in UK income levels relative to U.S. income levels.
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A tax on the British for buying U.S. stocks.
An increase in UK inflation relative to U.S. inflation.
An increase in UK income levels relative to U.S. income levels.
6. Which transaction will be recorded on financial account of the US?
None of the answers are correct.
A U.S firm put 1 million USD into a subsidiary in Thailand
A U.S firm pay salary to a foriegn employee.(current account, income payment, debit)
A U.S firm pay dividends to foreign investors. (Current account, income payment, debit)
7. The current spot exchange rate is $1.55/€ and the three-month forward rate is $1.50/€.
You enter into a short position on €1,000. At maturity, the spot exchange rate is $1.70/€.
How much have you made or lost?
Lost $50
Made $150
Made €100
Lost $200
STT *
8. A put option has a strike price of $35. The spot rate at the maturity date is $42. The put
is:
None of the answers are correct
in the money
out of the money
at the money
9. What is the ASK cross-exchange rate for Swiss Francs priced in euro? Given the
exchange rate: Switzerland (Franc) CHF = 0.7658 – 0.7662 USD and Euro € = 1.4000 –
1.4200 USD.
€0.5389/CHF
€0.5386/CHF
€0.5473/CHF
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€0.5463/CHF
10. The value of the Australian dollar (A$) today is $0.79. Yesterday, the value of the
Australian dollar was $0.73. The Australian dollar ____ by ____.
depreciated; 7.59
appreciated; 5.80
appreciated; 8.22
depreciated; 5.80
11. A firm wants to use an option to hedge 14 million in receivables from New Zealand
firms. The premium is $.026. The exercise price is $.52. If the option is exercised, what is
the total amount of dollars received (after accounting for the premium paid)?
$6,000,000
$6,875,000
$6,250,000
$6,916,000
12. The 180-day forward rate for the SGD is $0.7 while the current spot rate of the SGD
is $0.6. What is the annualized forward premium or discount of the SGD?
None of the answers are correct.
0.14 percent discount
0.16 percent premium
0.33 percent premium
13. You sell a put option on Swiss francs for a premium of $.02, with an exercise price of
$.61. The option will not be exercised until the expiration date, if at all. If the spot rate on
the expiration date is $.58, your net profit (loss) per unit is:
-$.02
$.02
-$.01
$.01
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14. What is the BID cross-exchange rate for Swiss Francs priced in euro? Given the
exchange rate: Switzerland (Franc) CHF = 0.7658 – 0.7662 USD and Euro € = 1.4000 –
1.4200 USD.
€0.5466/CHF
€0.5393/CHF
€0.5463/CHF
€0.5389/CHF
15. Suppose a bank customer with €1,000,000 wishes buy Japanese yen. The dollar-euro
exchange rate is quoted as $1.40 = €1.00, and the dollar-yen exchange rate is quoted at
$1.00 = ¥110. How many yen will the customer get?
¥5,208,333
¥154,000,000
¥75,000,000
¥5,208.33
16. If your firm expects peso to considerably appreciate, it could speculate by …….peso
call options or…….euros forward in the forward exchange market
purchasing; purchasing
selling; selling
selling; purchasing
purchasing; selling
17. Hoà Phát Group is a Vietnam-based (home country) MNC that frequently imports raw
materials from China. Hoà Phát is typically invoiced for these goods in Chinese Yuan
CNY (¥) and is concerned that the Chinese Yuan will appreciate in the near future. Which
of the following is NOT an appropriate hedging technique under these circumstances?
purchase Chinese Yuan CNY (¥) put options.5
purchase Chinese Yuan CNY (¥) call options.
purchase Chinese Yuan CNY (¥) contracts.
purchase Chinese Yuan CNY (¥) forward.
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18. You purchase a call option on pounds for a premium of $.03 per unit, with an exercise
price of $1.64; the option will not be exercised until the expiration date, if at all. If the
spot rate on the expiration date is $1.65, your net profit per unit is
+$0.02
-$0.01
(s-x-c) -0.02
None of the answers are correct
-$0.03.
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