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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.
$12, 711, 960
$12, e. None of the above
e. 38. The Purchase of U.S. Treasury Bond by
a French Investor Shows up as a:
e. Credit on the trade account.
Credit on long term capital account.
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
current account in a year when the country was a
net recipient of $250m in long term
the basic balance would be:
e. $50m 40. A Japanese investment in the U.S.
represents a foreign factor of production located
in the U.S. and the rent or income on such
investment adds to the:
e. GNP of the U.S.
GDP of Japan.
GNP of Japan.
Transfer receipts of Japan.
Transfer payments of Japan 41. A measure of value of production that
occurs within a country's borders without
to whether the production is done by domestic or
foreign factors of production is
referred to as:
e. Gross national product (GNP).
Net national product (NNP).
Net material product (NMP).
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
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.
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
b. Name the theory that identifies non-transferability of
resources as an explanation for international business.
c. Name a theory that identifies risk diversification as the
motivation for international business.
d. Which theory identifies specialization as a motivation
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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.
- Spring '12
- Exchange Rate