Refer to table 61 according to the information

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International Financial Management
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Chapter 4 / Exercise 34
International Financial Management
Madura
Expert Verified
45) Refer to Table 6.1. According to the information provided in the table, the 6month yen is selling at a forward ________ of approximately ________ per annum. (Use the mid rates to make your calculations.) A) discount; 2.09%
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International Financial Management
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Chapter 4 / Exercise 34
International Financial Management
Madura
Expert Verified
B) discount; 2.06% C) premium; 2.09% D) premium; 2.06% Answer: C
46) Refer to Table 6.1. Cross rates
47) Given the following exchange rates, which of the multiplechoice choices represents a potentially profitable intermarket arbitrage opportunity? ¥129.87/$ euro 1.1226/$ euro 0.00864/¥
48) For arbitrage opportunities to be practical,
49) The U.S. dollar suddenly changes in value against the euro moving from an exchange rate of $0.8909/euro to $0.08709/euro. Thus, the dollar has ________ by ________. A) appreciated; 2.30% B) depreciated; 2.30% C) appreciated; 2.24% D) depreciated; 2.24% Answer: A
50) When the cross rate for currencies offered by two banks differs from the exchange rate offered by a third bank, a triangular arbitrage opportunity exists.
51) Most transactions in the interbank foreign exchange trading are primarily conducted via telecommunication techniques and little is conducted face-to-face.
52) Global daily foreign exchange turnover (combined swaps, spot, and forward transactions) has declined from roughly $1,500 billion in 2001, to $1,200 in 2004, to $1,000 in 2007.
53) Given the following pair wise exchange rates, estimate the crossrate of pounds per euro. $0.8410/£ $1.2223/euro A) £1.000/euro B) £1.5062/euro C) £0.6639/euro D) euro 1.5062/£ Answer: C
54) Given the following quotations (where the dollar is the home currency), what is the annualized forward premium (discount) on the U.S. dollar? Spot rate: $1.305/euro 6 -month forward rate: $1.335/euro
55) The article in the text about an intern's first day on the job as a currency trader relates how what he/she had learned in business school had very little to do with how trading decisions were made on the floor of the exchange.
56) The Continuous Linked Settlement system (CLS) links with the Real-Time Gross Settlement (RTGS) systems and is expected to eventually result in same-day settlement rather than the current two-day settlement required for foreign exchange spot market transactions.
57) Currency trading increased tremendously between 2004 and 2007 with daily trading volume jumping from $1.9 trillion to $3.2 trillion. Which of the following do experts think was a major driving force behind the increased daily volume?
A) increased activity by specialized investment groups such as hedge funds B) institutional investors holding more internationally diversified portfolios thus requiring more currency transactions C) increased use of technical computer-based trading D) all of the above Answer: D
58) New York City has the greatest volume of foreign exchange activity in the world.

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