geb14 - Foreign Exchange Questions 1. Most foreign exchange...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Foreign Exchange Questions 1. Most foreign exchange transactions are through the U.S. dollar. If the transaction is expressed as the foreign currency per dollar this is known as _____________ whereas ___________ are expressed as dollars per foreign unit. (a) European terms; indirect (b) American terms; direct (c) American terms; European terms (d) European terms; American terms 2. The following is an example of an American terms foreign exchange quote. (a) $20/£ (b) 0.85 /$ (c) 100¥/ (d) None of the above 3. From the viewpoint of a British investor, which of the following would be a direct quote in the foreign exchange market? (a) SF2.40/£ (b) $1.50/£ (c) £0.55/ €ν (d) $0.90/ 4. A/an __________ quote in the United States would be foreign units per dollar, while a/an ______________ quote would be in dollars per foreign currency unit. (a) direct; direct (b) direct; indirect (c) indirect; indirect (d) indirect; direct 5. If the direct quote for a U.S. investor for British pounds is $1.78/£, then the indirect quote for the U.S. investor would be _________ and the direct quote for the British investor would be ____________. (a) £0.562/$; £0.562/$ (b) $0.562/£; £0.562/$ (c) £1.78/£; £0.562/$ (d) £0.562/$; $1.78/£ Use the table below to answer problems 19–23 Yen: Spot and Forward (¥/$) Pound: Spot and Forward ($/£) Mid Rates Bid Ask Mid Rates Bid Ask Spot 114.25 114.20 114.30 1.7865 1.7862 1.7868 Forward Rates 1 month 114.06 - 20 - 18 1.7840 - 26 - 24 6 months 112.91 - 136 - 132 1.7708 - 160 - 154
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
6. The current market spot rate of dollars for pounds as quoted in a newspaper is ________(American terms) or __________ (European terms). (a) £1.7865/$; $0.5598/£ (b) $1.7862/£; £0.5598/$ (c) $1.7865/£; £0.5598/$ (d) £1.7868/$; $0.5597/£ 7. According to the information provided in the table, the 6-month yen is selling at a forward ____________ of approximately ___________ per annum. (Use the mid rates to make your calculations.) (a) discount; 2.37% (b) discount; 2.31% (c) premium; 2.37% (d) premium; 2.31% 8. The U.S. dollar suddenly changes in value against the euro moving from an exchange rate of $0.8909/ to $0.8709/ . Thus, the dollar has ____________ by _______. (a) appreciated; 2.30%
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 5

geb14 - Foreign Exchange Questions 1. Most foreign exchange...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online