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1、INTERNATIONAL FINANCEAssignment Problems （3) Name： Student#: I. Choose the correct answer for the following questions (only ONE correct answer） (2 credits for each question, total credits 2 x 25 = 50）1. Interbank quotations that include the United States dollars are conventionally given in _, which
2、state the foreign currency price of one U。S。 dollar, such as a bid price of SFr 0。85/。 A。 indirect quote B。 direct quote C. American quote D. European quote2。 The spot exchange rate published in financial newspapers is usually the _。A. nominal exchange rateB。 real exchange rateC. effective exchange
3、rateD. equilibrium exchange rate3. The foreign exchange refers to the _。 A. foreign bank notes and coins B. demand deposits in foreign banks C。 foreign securities that can be easily cashed D. all of the above4。 The functions of the foreign exchange market come down to _。 A。 converting the currency o
4、f one country into the currency of another B。 providing some insurance against the foreign exchange risk C. making the foreign exchange speculation easy D。 Only A and B are true.5。 Which of the following is NOT true regarding the foreign exchange market？ A. It is the place through which people excha
5、nge one currency for another。 B。 The exchange rate nowadays is mainly determined by the market forces。 C. Most foreign exchange transactions are physically completed in this market. D. All of the above are true.6。 The world largest foreign exchange markets are _ respectively。 A。 London, New York and
6、 Tokyo B。 London, Paris and Frankfurt C. London， Hong Kong and Singapore D。 London， Zurich and Bahrain7。 The foreign exchange market is NOT efficient because _. A。 monetary authorities dominate the foreign exchange market and everybody knows that by definition， central banks are inefficient B. comme
7、rcial banks and other participants of the market do not compete with one another due to the fact that transaction takes place around the world and not in a single centralized location C。 foreign exchange dealers have different prices such as bid and ask prices D。 None of the reasons listed are corre
8、ct because the foreign exchange market is an efficient market8。 _ earn a profit by a bid-ask spread on currencies they buy and sell. _ on the other hand， earn a profit by bringing together buyers and sellers of foreign exchanges and earning a commission on each sale and purchase。 A. Foreign exchange
9、 brokers; foreign exchange dealers B. Foreign exchange dealers; foreign exchange brokers C. arbitragers; speculators D. commercial banks; central banks9。 Most foreign exchange transactions are through the U。S。 dollars。 If the transaction is expressed as the currencies per dollar， this is known as _
10、whereas _ are expressed as dollars per currency。 A. direct quote； indirect quote B。 indirect quote； direct quote C. European quote； American quote D。 American quote， European quote10。 From the viewpoint of a Japanese investor， which of the following would be a direct quote？ A. SFr 1.25/ B. 1.55/ C.
11、110/ D. 0.0091/ 11。 Which of the following is true about the foreign exchange market？ A。 It is a global network of banks, brokers, and foreign exchange dealers connected by electronic communications system。 B。 The foreign exchange market is usually located in a particular place. C. The foreign excha
12、nge rates are usually determined by the related monetary authorities. D。 The main participants in this market are currency speculators from different countries.12。 The extent to which the income from individual transactions is affected by fluctuations in foreign exchange values is considered to be _
13、。 A。 Translation exposure B. economic exposure C。 transaction exposure D。 accounting exposure13。 Which of the following exchange rates is adjusted for price changes？A. nominal exchange rateB。 real exchange rateC。 effective exchange rate D. equilibrium exchange rate14. Suppose the exchange rate of th
14、e RMB versus U。S。 dollar is 6。8523/$ now。 If the RMB were to undergo a 10% depreciation, the new exchange rate in terms of / would be： A。 6。1671 B. 7。5375 C. 6。9238 D。 7。613515。 At least in a U。S. MNCs financial accounting statement, if the value of the euro depreciates rapidly against that of the d
15、ollar over a year, this would reduce the dollar value of the euro profit made by the European subsidiary. This is a typical _。 A. transaction exposure B。 translation exposure C。 economic exposure D。 operating exposure16。 A Japanesebased firm expects to receive pound-payment in 6 months. The company has a （an） _。 A. economic exposure B。 accounting exposure C。 long position in sterling D。
