Exam I Make Up-Key

Exam I Make Up-Key - Kansas State University Finance...

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Kansas State University Finance Department Fall 2001 International Financial Management Exam I- Make Up, Tuesday November 6 Dr. Amir Tavakkol Student Name: _____________________________________________________________________________ _ Notes: Please answer all of the questions. Questions have equal weights. If a question is not clear, ask for explanation. Good Luck! 1. Suppose that the Brazilian cruzeiro devalues by 40% against the U.S. dollar. By how much will the dollar appreciate against the cruzeiro? a) 67% b) 40% c) 32% d) 28% e) none of the above 2. Which of the following is an example of foreign exchange market intervention? a) the U.S. government pays Social Security checks to pensioners living in Poland b) IBM sells DM it received in international trade c) the Canadian government pays interest to Saudi Arabian investors d) the French government sells dollars in the foreign exchange market to prop up the value of the franc e) all of the above 3. In order to boost the value of the DM relative to the dollar a) the Fed should sell dollars for DM and the Bundesbank should buy DM with dollars b) the Fed should sell dollars for DM and the Bundesbank should buy dollars with DM c) the Fed should sell DM for dollars and the Bundesbank should sell dollars for DM d) the Fed should sell DM for dollars and the Bundesbank should buy DM with dollars e) c and d
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4. The sale of American computers to the Spanish government shows up as a) a debit on the official reserves account b) a credit on the official reserves account c) a credit on the trade account d) a debit on the current account e) none of the above 5. The most likely way to reduce the Japanese trade surplus is to a) revalue the Japanese yen b) impose quotas on imports from Japan c) boost Japanese savings d) boost Japanese consumption e) all of the above 6. The spot and 30-day forward rates for the Dutch guilder are $.3075 and $.3120, respectively. The guilder is said to be selling at a forward
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This note was uploaded on 05/24/2011 for the course ECON 3 taught by Professor Dd during the Spring '11 term at Alvin CC.

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Exam I Make Up-Key - Kansas State University Finance...

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