Question 1

Trading on the foreign exchange market is

Accepted Answer

A)  located in a physical headquarters in London 
B)  takes place within an organized exchange 
C)  conducted by licensed brokers from the London stock exchange 
D)  an electronically linked network of banks, brokers, and dealers 
A)  located in a physical headquarters in London 
B)  takes place within an organized exchange 
C)  conducted by licensed brokers from the London stock exchange 
D)  an electronically linked network of banks, brokers, and dealers

Question 2

A ___________ between a bank and a customer calls for a fixed delivery date, at a fixed exchange rate for a specified amount of one currency against another currency payment.

Accepted Answer

A)  spot quotation 
B)  currency option 
C)  currency swap 
D)  forward contract 
A)  spot quotation 
B)  currency option 
C)  currency swap 
D)  forward contract

Question 3

Suppose the direct quote for sterling in New York is 1.3110?5. Then the direct quote for dollars in London is:

Accepted Answer

A)  .7110?5 
B)  2.6220?30 
C)  .7625?8 
D)  1.3110?5 
A)  .7110?5 
B)  2.6220?30 
C)  .7625?8 
D)  1.3110?5

Question 4

Suppose the following direct quotes are received for spot and one? month French francs in New York: .1160?684?Then the outright 30? day forward quote for the French franc is:

Accepted Answer

A)  .1156?62 
B)  .1164?74 
C)  .1166?72 
D)  .1154?64 
A)  .1156?62 
B)  .1164?74 
C)  .1166?72 
D)  .1154?64

Question 5

What is the name of the international bank communications network for foreign exchange transactions that connects more than 7,000 banks and broker-dealers?

Accepted Answer

A)  FedWire 
B)  CHIPS 
C)  SWIFT 
D)  UBS 
A)  FedWire 
B)  CHIPS 
C)  SWIFT 
D)  UBS

Question 6

The $/DM exchange rate is DM1 = $.35 and the DM/FF exchange rate is FF1 = DM.31. What is the FF/$ exchange rate?

Accepted Answer

A)  3.226 French francs per dollar 
B)  1.129 French francs per dollar 
C)  .886 French francs per dollar 
D)  9.217 French francs per dollar 
A)  3.226 French francs per dollar 
B)  1.129 French francs per dollar 
C)  .886 French francs per dollar 
D)  9.217 French francs per dollar

Question 7

Suppose the 90?day forward quotes on the DM and the French franc are $.4002?10 and $.1180?90, respectively. What is the direct 90?day forward quote for the franc in Frankfurt?

Accepted Answer

A)  3.3625?54 
B)  3.3631?92 
C)  .2943?74 
D)  .2949?68 
A)  3.3625?54 
B)  3.3631?92 
C)  .2943?74 
D)  .2949?68

Question 8

Suppose the spot direct quotes for the Italian lira and Swedish krone are $.00050?51 and $.1201?10, respectively. What is the direct quote for the Swedish krone in Milan?

Accepted Answer

A)  .00413?25 
B)  .00422?31 
C)  235.49?242.00 
D)  237.81?245.03 
A)  .00413?25 
B)  .00422?31 
C)  235.49?242.00 
D)  237.81?245.03

Question 9

If the direct price of the dollar is 5 in Copenhagen and transaction costs are .5%, then the minimum?maximum direct quotes for the Danish krone in New York are

Accepted Answer

A)  4.9750?5.0250 
B)  4.9500?5.0500 
C)  .1980?.2020 
D)  .1990?.2010 
A)  4.9750?5.0250 
B)  4.9500?5.0500 
C)  .1980?.2020 
D)  .1990?.2010

Question 10

Exports of goods and services by the United States now total more than _________ of gross domestic product.

Accepted Answer

A)  10% 
B) 20% 
C) 50% 
D) 75% 
A)  10% 
B) 20% 
C) 50% 
D) 75%

Trading on the foreign exchange market is

A ___________ between a bank and a customer calls for a fixed delivery date, at a fixed exchange rate for a specified amount of one currency against another currency payment.

Suppose the direct quote for sterling in New York is 1.3110?5. Then the direct quote for dollars in London is:

Suppose the following direct quotes are received for spot and one? month French francs in New York: .1160?684?Then the outright 30? day forward quote for the French franc is:

What is the name of the international bank communications network for foreign exchange transactions that connects more than 7,000 banks and broker-dealers?

The $/DM exchange rate is DM1 = $.35 and the DM/FF exchange rate is FF1 = DM.31. What is the FF/$ exchange rate?

Suppose the 90?day forward quotes on the DM and the French franc are $.4002?10 and $.1180?90, respectively. What is the direct 90?day forward quote for the franc in Frankfurt?

Suppose the spot direct quotes for the Italian lira and Swedish krone are $.00050?51 and $.1201?10, respectively. What is the direct quote for the Swedish krone in Milan?

If the direct price of the dollar is 5 in Copenhagen and transaction costs are .5%, then the minimum?maximum direct quotes for the Danish krone in New York are

Exports of goods and services by the United States now total more than _________ of gross domestic product.

Introduction: Multinational Enterprise and Multinational Financial Management

The Determination of Exchange Rates

The International Monetary System

Parity Conditions in International Finance and Currency Forecasting

The Balance of Payments and International Economic Linkages

Currency Futures and Options Markets

Swaps and Interest Rate Derivatives

Measuring and Managing Translation and Transaction Exposure

Measuring and Managing Economic Exposure

Country Risk Analysis

International Financing and National Capital Markets

International Portfolio Investment

Capital Budgeting for the Multinational Corporation

Financing Foreign Trade

Managing the Multinational Financial System

Filters

Exam 6: The Foreign Exchange Market

Trading on the foreign exchange market is

A ___________ between a bank and a customer calls for a fixed delivery date, at a fixed exchange rate for a specified amount of one currency against another currency payment.

Suppose the direct quote for sterling in New York is 1.3110?5. Then the direct quote for dollars in London is:

Suppose the following direct quotes are received for spot and one? month French francs in New York: .1160?684?Then the outright 30? day forward quote for the French franc is:

What is the name of the international bank communications network for foreign exchange transactions that connects more than 7,000 banks and broker-dealers?

The $/DM exchange rate is DM1 = $.35 and the DM/FF exchange rate is FF1 = DM.31. What is the FF/$ exchange rate?

Suppose the 90?day forward quotes on the DM and the French franc are $.4002?10 and $.1180?90, respectively. What is the direct 90?day forward quote for the franc in Frankfurt?

Suppose the spot direct quotes for the Italian lira and Swedish krone are $.00050?51 and $.1201?10, respectively. What is the direct quote for the Swedish krone in Milan?

If the direct price of the dollar is 5 in Copenhagen and transaction costs are .5%, then the minimum?maximum direct quotes for the Danish krone in New York are

Exports of goods and services by the United States now total more than _________ of gross domestic product.

Introduction: Multinational Enterprise and Multinational Financial Management

The Determination of Exchange Rates

The International Monetary System

Parity Conditions in International Finance and Currency Forecasting

The Balance of Payments and International Economic Linkages

Currency Futures and Options Markets

Swaps and Interest Rate Derivatives

Measuring and Managing Translation and Transaction Exposure

Measuring and Managing Economic Exposure

Country Risk Analysis

International Financing and National Capital Markets

International Portfolio Investment

Capital Budgeting for the Multinational Corporation

Financing Foreign Trade

Managing the Multinational Financial System

Filters