Exam 17: Multinational

Suppose 6 months ago a Swiss investor bought a 6-month U.S.Treasury bill at a price of $9,708.74, with a maturity value of $10,000.The exchange rate at that time was 1.420 Swiss francs per dollar.Today, at maturity, the exchange rate is 1.324 Swiss francs per dollar.What is the annualized rate of return to the Swiss investor?

Exchange rate quotations consist solely of direct quotations.

cost of capital may be different for a foreign project than for an equivalent domestic project because foreign projects may be more or less risky.

the inflation rate in the United States is greater than the inflation rate in Britain, other things held constant, the British pound will

Eurodollar is a U.S.dollar deposited in a bank outside the United States.

one Swiss franc can purchase $0.71 U.S.dollars, how many Swiss francs can one U.S.dollar buy?

Suppose 144 yen could be purchased in the foreign exchange market for one U.S.dollar today.If the yen depreciates by 8.0% tomorrow, how many yen could one U.S.dollar buy tomorrow?

1985, a given Japanese imported automobile sold for 1,476,000 yen, or $8,200.If the car still sold for the same amount of yen today but the current exchange rate is 144 yen per dollar, what would the car be selling for today in U.S.dollars?

the United States is running a deficit trade balance with China, then in a free market we would expect the value of the Chinese yuan to depreciate against the U.S.dollar.