Chapter 9
Managing Transaction Exposure and Economic Exposure
1.
Transaction exposure occurs if there is a change in an exchange rate and
.
*
A.
an outstanding obligation denominated in a foreign currency is settled
B.
sales are made in cash
C.
purchases are made in cash
D.
an outstanding obligation denominated in a home currency is settled
E.
all of the above
2.
If a foreign currency depreciates, exchange losses will occur when exposed
.
*
3.
Economic exposure measures the impact of actual exchange conversion involving the
following cases except
.
*
4.
A forward market hedge involves the following except
.
*
5.
A money-market hedge does not involve the following
.
A.
spot rate
B.
interest rate
*
C.
forward rate
D.
marketable securities
E.
accounts receivable
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6.
An option-market hedge in foreign exchange risk management is a form of a(n)
.
*
7.
A currency swap involves the following
.
*
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- Spring '12
- Wald
- Exchange Rate, Corporate Finance, Debt, Interest, Foreign exchange market, United States dollar, Forward contract
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