Fin 6605 MC Set A Model

The current spot rate is 13995 assume that relative

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Unformatted text preview: 11.10% 7.42% None of the above 37. The current spot rate ($/€) is 1.3995. Assume that relative PPP holds between U.S. and Germany, and U.S. inflation is expected to be 3% per year for the next five years while German inflation is expected to be 5% per year over the same period. XYZ Corp of USA has a 10 million euro receivable at the end of five years. Calculate the expected amount of dollars to be received by XYZ at the end five years. to a. b. b. c. c. d. $15,407,539 $15,407,539 $13,728,429 $14,266,748 $12, 711, 960 $12, e. None of the above e. 38. The Purchase of U.S. Treasury Bond by 38. The U.S. a French Investor Shows up as a: French a. b. c. d. e. Credit on the trade account. Credit on long term capital account. Credit Debit on the current account. Debit on short term capital account Credit on short-term performance balance 39. If the U.S. ran a deficit of $150m on the 39. If current account in a year when the country was a net recipient of $250m in long term capital, then the basic balance would be: a. $250m b. $200m c. $l00m $l00m d. $400m e. $50m 40. A Japanese investment in the U.S. Japanese represents a foreign factor of production located in the U.S. and the rent or income on such investment adds to the: investment a. a. b. c. c. d. d. e. GNP of the U.S. GNP GDP of Japan. GDP GNP of Japan. GNP Transfer receipts of Japan. Transfer payments of Japan 41. A measure of value of production that 41. measure occurs within a country's borders without regard to whether the production is done by domestic or foreign factors of production is commonly referred to as: referred a. a. b. b. c. c. d. e. Gross national product (GNP). Gross Net national product (NNP). Net Net material product (NMP). Net Gross domestic product (GDP). Balance of payment (BOP) 42. Analyze each of the following transactions. Indicate whether it generates a credit/debit and the US BOP account balance it affects. (Trade, Current, Basic or Performance Trade, Balances) Balances 01. 02. 02. 03. 03. 04. 05. 06. 07. 08. 09. 10. The Chinese bought $55m worth of US beef. An American bought a hotel in Japan for $45m British invertors bought $40m of US bonds. Americans bought $50m worth of Iraqi oil. Microsoft sold $22m computer software to Mexico Japanese visitors spent $25m at Orlando Theme Parks The French invested $35m in US CDs US residents gave $22m to their relatives in Mexico SunTrust paid $10m in interest to Italian investors US doctors received $30m in service fees from Brazil 43. 43. a. a. Identify the theory that points to international business engagement as a natural stage in the evolution of new products from introduction to growth, maturity and eventual decline eventual b. b. Name the theory that identifies non-transferability of resources as an explanation for international business. resources c. c. Name a theory that identifies risk diversification as the motivation for international business. motivation d. d. Which theory identifies specialization as a motivation for inter...
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This note was uploaded on 12/17/2012 for the course FIN 3604 taught by Professor Zhang during the Spring '12 term at University of San Francisco.

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