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1、Review Material for International Finance （2009）First Part: A. Concept Explanation: ( select6,18points)1. London Interbank Offered Rate (LIBOR)2. Special Drawing Rights (SDR)3. Bretton Woods System4. Current Account5. Euro6. European Option7. International Fisher Effect8. Law of One Price9. Purchasi
2、ng Power Parity (PPP)10. Option11. Foreign exchange12. Euro-bond13. Balance of Payments14. Greshams Law 15. Forward Discount 16. J curves effect17. Premium18. Official reserve assets19. Open Interest20. OTC21. CDS22. NDF23. Swap agreement24. Unilateral transfer25. FX exposure26. Cover position27. IP
3、O28. QFII29. QDII30. Optional Forward Exchange B. Multiple-choice test(only one is correct): 1. Greshams Law states that a) Bad money drives good money out of circulation.b) Good money drives bad money out of circulationc) If a country bases its currency on both gold and silver, at an official excha
4、nge rate, it will be the more valuable of the two metals that circulate.d) None of the above.2. Balance of paymentsa) is defined as the statistical record of a countrys international transactions over a certain period of time presented in the form of a double-entry bookkeepingb) provides detailed in
5、formation concerning the demand and supply of a countrys currencyc) can be used to evaluate the performance of a country in international economic competitiond) all of the above3. If the United States imports more than it exports, then a) The supply of dollars is likely to exceed the demand in the f
6、oreign exchange market, ceteris paribus.b) One can infer that the U.S. dollar would be under pressure to depreciate against other currenciesc) a) and b)d) None of the above4. 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
7、. At maturity, the spot exchange rate is $1.60/. How much have you made or lost?a) Lost $100b) Made 100c) Lost $50d) Made $1505. The sensitivity of “realized” domestic currency values of the firms contractual cash flows denominated in foreign currency to unexpected changes in the exchange rate is:a)
8、 Transaction exposureb) Translation exposurec) Economic exposured) None of the above6. Three days ago, you entered into a futures contract to sell 62,500 at $1.20 per . Over the past three days the contract has settled at $1.20, $1.22, and $1.24. How much have you made or lost?a) Lost $0.04 per or $
9、2,500b) Made $0.04 per or $2,500c) Lost $0.06 per or $3,750d) None of the above7. A swap banka) Can act as a broker, bringing together counterparties to a swapb) Can act as a dealer, standing ready to buy and sell swapsc) Both a) and b)d) Only sometimes a) but never ever b)8. Suppose that the one-ye
10、ar interest rate is 5.0 percent in the United States, the spot exchange rate is $1.20/, and the one-year forward exchange rate is $1.16/. What must one-year interest rate be in the euro zone?a) 5.0%b) 1.09%c) 8.62%d) None of the above. 9. Suppose the spot ask exchange rate, Sa($|), is $1.90 = 1.00 a
11、nd the spot bid exchange rate, Sb($|), is $1.89 = 1.00. If you were to buy $10,000,000 worth of British pounds and then sell them five minutes later, how much of your $10,000,000 would be “eaten” by the bid-ask spread?a) $1,000,000b) $52,910.05c) $100,000d) $52,631.58 10. Under the gold standard, in
12、ternational imbalances of payment will be corrected automatically under thea) Gresham Exchange Rate regimeb) European Monetary Systemc) Price-specie-flow mechanismd) Bretton Woods Accord11. With any hedgea) Your losses on one side should about equal your gains on the other sideb) You should try to m
13、ake money on both sides of the transaction: that way you make money coming and goingc) You should spend at least as much time working the hedge as working the underlying deal itselfd) You should agree to anything your banker puts in front of your face12. Comparing “forward” and “futures” exchange co
14、ntracts, we can say that:a) They are both “marked-to-market” daily.b) Their major difference is in the way the underlying asset is priced for future purchase or sale: futures settle daily and forwards settle at maturity.c) A futures contract is negotiated by open outcry between floor brokers or trad
15、ers and is traded on organized exchanges, while forward contract is tailor-made by an international bank for its clients and is traded OTC.d) b) and c)13. An “option” isa) a contract giving the seller (writer) the right, but not the obligation, to buy or sell a given quantity of an asset at a specified price at some time in the futureb) a contract giving the owner (buyer) the right, but not the obligation, to buy or sell a given quantity of an asset at a specified price at some time in the futurec) not a derivative, nor a contingent claim, securityd) unlike a futures or f
