Question 1

How is the forward value date calculated on a 90-day forward contract?

Accepted Answer

To find the delivery date for a 90-day f

Question 2

One important purpose of the forward markets for foreign exchange allows global traders to protect themselves by ________.

Accepted Answer

A)  hedging 
B)  arbitraging 
C)  speculating 
D)  preventing default 
A)  hedging 
B)  arbitraging 
C)  speculating 
D)  preventing default

Question 3

When does delivery occur on a 90-day forward contract?

Accepted Answer

A)  in 90 days corresponding to two business days preceding the third Wednesday of the month 
B)  immediately but the contract is not closed for 90 more days 
C)  in 90 days corresponding to the calendar date of the spot value date 
D)  two business days following the spot value date 
A)  in 90 days corresponding to two business days preceding the third Wednesday of the month 
B)  immediately but the contract is not closed for 90 more days 
C)  in 90 days corresponding to the calendar date of the spot value date 
D)  two business days following the spot value date

Question 4

In the forward market the bid-ask spreads begin to ________ as the maturity date of the contract grows closer.

Accepted Answer

A)  widen 
B)  narrow 
C)  stabilize 
D)  disappear 
A)  widen 
B)  narrow 
C)  stabilize 
D)  disappear

Question 5

What is the statistical interpretation of the expected future spot rate?

Accepted Answer

The expected future spot rate is the con

Question 6

If the USD is selling at a discount relative to the yen in the forward market,is the forward price of JPY/USD larger or smaller that the spot price of the JPY/USD?

Accepted Answer

A)  larger 
B)  smaller 
C)  indeterminate 
D)  the same 
A)  larger 
B)  smaller 
C)  indeterminate 
D)  the same

Question 7

Suppose the spot quote on the euro is $0.9302-18,and the spot quote on the Swiss franc is $0.6180-90.What is the direct spot quote for the Swiss franc in Frankfurt?

Accepted Answer

In order to sell one franc for euros,fir

Question 8

If the euro is selling at a premium relative to the USD in the forward market,is the forward price of USD /EUR larger or smaller than the spot price of the USD /EUR?

Accepted Answer

A)  larger 
B)  smaller 
C)  indeterminate 
D)  the same 
A)  larger 
B)  smaller 
C)  indeterminate 
D)  the same

Question 9

Why are the bid-ask spreads larger in the forward market than in the spot market?

Accepted Answer

A)  because the forward market is less liquid than the spot market 
B)  because the spot market is more volatile than the forward market 
C)  because the forward market is more liquid than the spot market 
D)  because the spot market is less liquid than the forward market 
A)  because the forward market is less liquid than the spot market 
B)  because the spot market is more volatile than the forward market 
C)  because the forward market is more liquid than the spot market 
D)  because the spot market is less liquid than the forward market

Question 10

A swap transaction in the forward market involves the simultaneous sale and purchase of a certain amount of foreign currency for ________.

Accepted Answer

A)  one specific date in the future 
B)  many different dates in the future 
C)  two different dates in the future 
D)  speculation under the correct conditions 
A)  one specific date in the future 
B)  many different dates in the future 
C)  two different dates in the future 
D)  speculation under the correct conditions

Question 11

Which one of the following options is not a type of swap?

Accepted Answer

A)  the sale of foreign currency short-term forward against the purchase of foreign currency forward 
B)  the purchase of foreign currency short-term forward against the sale of foreign currency long-term forward 
C)  the purchase of foreign currency spot against the sale of foreign currency forward 
D)  the sale of foreign currency short-term forward against the purchase of foreign currency long-term forward 
A)  the sale of foreign currency short-term forward against the purchase of foreign currency forward 
B)  the purchase of foreign currency short-term forward against the sale of foreign currency long-term forward 
C)  the purchase of foreign currency spot against the sale of foreign currency forward 
D)  the sale of foreign currency short-term forward against the purchase of foreign currency long-term forward

Question 12

What is a forward-forward swap?

Accepted Answer

A forward-forward swap involves either t

How is the forward value date calculated on a 90-day forward contract?

One important purpose of the forward markets for foreign exchange allows global traders to protect themselves by ________.

When does delivery occur on a 90-day forward contract?

In the forward market the bid-ask spreads begin to ________ as the maturity date of the contract grows closer.

What is the statistical interpretation of the expected future spot rate?

If the USD is selling at a discount relative to the yen in the forward market,is the forward price of JPY/USD larger or smaller that the spot price of the JPY/USD?

Suppose the spot quote on the euro is $0.9302-18,and the spot quote on the Swiss franc is $0.6180-90.What is the direct spot quote for the Swiss franc in Frankfurt?

If the euro is selling at a premium relative to the USD in the forward market,is the forward price of USD /EUR larger or smaller than the spot price of the USD /EUR?

Why are the bid-ask spreads larger in the forward market than in the spot market?

A swap transaction in the forward market involves the simultaneous sale and purchase of a certain amount of foreign currency for ________.

Which one of the following options is not a type of swap?

What is a forward-forward swap?

Globalization and the Multinational Corporation

The Foreign Exchange Market

The Balance of Payments

Exchange Rate Systems

Interest Rate Parity

Speculation and Risk in the Foreign Exchange Market

Purchasing Power Parity and Real Exchange Rates

Measuring and Managing Real Exchange Risk

Exchange Rate Determination and Forecasting

International Debt Financing

International Equity Financing

International Capital Market Equilibrium

Country and Political Risk

International Capital Budgeting

Additional Topics in International Capital Budgeting

Risk Management and the Foreign Currency Hedging Decision

Financing International Trade

Managing Net Working Capital

Foreign Currency Futures and Options

Interest Rates and Foreign Currency Swaps

Filters

Exam 3: Forward Markets and Transaction Exchange Risk

How is the forward value date calculated on a 90-day forward contract?

One important purpose of the forward markets for foreign exchange allows global traders to protect themselves by ________.

When does delivery occur on a 90-day forward contract?

In the forward market the bid-ask spreads begin to ________ as the maturity date of the contract grows closer.

What is the statistical interpretation of the expected future spot rate?

If the USD is selling at a discount relative to the yen in the forward market,is the forward price of JPY/USD larger or smaller that the spot price of the JPY/USD?

Suppose the spot quote on the euro is $0.9302-18,and the spot quote on the Swiss franc is $0.6180-90.What is the direct spot quote for the Swiss franc in Frankfurt?

If the euro is selling at a premium relative to the USD in the forward market,is the forward price of USD /EUR larger or smaller than the spot price of the USD /EUR?

Why are the bid-ask spreads larger in the forward market than in the spot market?

A swap transaction in the forward market involves the simultaneous sale and purchase of a certain amount of foreign currency for ________.

Which one of the following options is not a type of swap?

What is a forward-forward swap?

Globalization and the Multinational Corporation

The Foreign Exchange Market

The Balance of Payments

Exchange Rate Systems

Interest Rate Parity

Speculation and Risk in the Foreign Exchange Market

Purchasing Power Parity and Real Exchange Rates

Measuring and Managing Real Exchange Risk

Exchange Rate Determination and Forecasting

International Debt Financing

International Equity Financing

International Capital Market Equilibrium

Country and Political Risk

International Capital Budgeting

Additional Topics in International Capital Budgeting

Risk Management and the Foreign Currency Hedging Decision

Financing International Trade

Managing Net Working Capital

Foreign Currency Futures and Options

Interest Rates and Foreign Currency Swaps

Filters