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1、Part.Decide whether each of the following statements is true or false (10%)每题1分，答错不扣分1. If perfect markets existed, resources would be more mobile and could therefore be transferred to those countries more willing to pay a high price for them. ( T ) 2. The forward contract can hedge future receivabl
2、es or payables in foreign currencies to insulate the firm against exchange rate risk. ( T )3. The primary objective of the multinational corporation is still the same primary objective of any firm, i.e., to maximize shareholder wealth. ( T )4. A low inflation rate tends to increase imports and decre
3、ase exports, thereby decreasing the current account deficit, other things equal. ( F ) 5. A capital account deficit reflects a net sale of the home currency in exchange for other currencies. This places upward pressure on that home currencys value. ( F )6. The theory of comparative advantage implies
4、 that countries should specialize in production, thereby relying on other countries for some products. ( T ) 7. Covered interest arbitrage is plausible when the forward premium reflect the interest rate differential between two countries specified by the interest rate parity formula.( F )8 The total
5、 impact of transaction exposure is on the overall value of the firm. ( F ) 9. A put option is an option to sell-by the buyer of the option-a stated number of units of the underlying instrument at a specified price per unit during a specified period. ( T )10. Futures must be marked-to-market. Options
6、 are not. ( T )Part:Cloze (20%)每题2分，答错不扣分1. If inflation in a foreign country differs from inflation in the home country, the exchange rate will adjust to maintain equal( purchasing power ）2. Speculators who expect a currency to ( appreciate ) could purchase currency futures contracts for that curre
7、ncy.3. Covered interest arbitrage involves the shortterm investment in a foreign currency that is covered by a ( forward contract ) to sell that currency when the investment matures. 4. （ Appreciation/ Revalue ）of RMB reduces inflows since the foreign demand for our goods is reduced and foreign comp
8、etition is increased.5. ( PPP ) suggests a relationship between the inflation differential of two countries and the percentage change in the spot exchange rate over time.6. IFE is based on nominal interest rate ( differentials ), which are influenced by expected inflation.7. Transaction exposure is
9、a subset of economic exposure. Economic exposure includes any form by which the firms ( value ) will be affected. 8. The option writer is obligated to buy the underlying commodity at a stated price if a ( put option ) is exercised9. There are three types of long-term international bonds. They are Gl
10、obal bonds , ( eurobonds ) and ( foreign bonds ).10. Any good secondary market for finance instruments must have an efficient clearing system. Most Eurobonds are cleared through either ( Euroclear ) or Cedel.Part :Questions and Calculations (60%)过程正确结果计算错误扣2分1. Assume the following information:A Ban
11、k B BankBid price of Canadian dollar$0.802$0.796Ask price of Canadian dollar$0.808$0.800Given this information, is locational arbitrage possible? If so, explain the steps involved in locational arbitrage, and compute the profit from this arbitrage if you had $1,000,000 to use. (5%) ANSWER:Yes! One c
12、ould purchase New Zealand dollars at Y Bank for $.80 and sell them to X Bank for $.802. With $1 million available, 1.25 million New Zealand dollars could be purchased at Y Bank. These New Zealand dollars could then be sold to X Bank for $1,002,500, thereby generating a profit of $2,500.2. Assume tha
13、t the spot exchange rate of the British pound is $1.90. How will this spot rate adjust in two years if the United Kingdom experiences an inflation rate of 7 percent per year while the United States experiences an inflation rate of 2 percent per year?(10%)ANSWER:According to PPP, forward rate/spot=in
14、dexdom/indexfor the exchange rate of the pound will depreciate by 4.7 percent. Therefore, the spot rate would adjust to $1.90 1 + (.047) = $1.81073. Assume that the spot exchange rate of the Singapore dollar is $0.70. The oneyear interest rate is 11 percent in the United States and 7 percent in Sing
15、apore. What will the spot rate be in one year according to the IFE? (5%)ANSWER: according to the IFE,St+1/St=(1+Rh)/(1+Rf)$.70 (1 + .04) = $0.7284. Assume that XYZ Co. has net receivables of 100,000 Singapore dollars in 90 days. The spot rate of the S$ is $0.50, and the Singapore interest rate is 2% over 90 days. Suggest how the U.S. firm could implement a money market hedge. Be precise . (10%)ANSWER: The firm could borrow the amount of Singapore dollars so that the 100,000 Singapore dollars to b
