Suppose the spot exchange rate is 2 US dollars per British pound The forward

Suppose the spot exchange rate is 2 us dollars per

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50. Suppose the spot exchange rate is 2 U.S. dollars per British pound. The forward exchange rate is 1.9 dollars per pound. Which of the following is true? A. The U.S. inflation rate is lower.B. The pound is selling at a premium.C. The pound is selling at a discount.D. U.S. interest rates are lower.E. More than one of the above is true.51. Which one of following statements is not correct? 31-13
Chapter 31 - International Corporate Finance52. Suppose that the one-year forward rate on pounds is $1.75£. Given no arbitrage opportunities, this implies that traders expect: 53. Remitting cash flows is a term used to describe: 54. Financial Accounting Standard Board Statement Number 52 requires that most assets and liabilities be translated at the current exchange rate. Gains and losses are recorded: A. against shareholder's equity.B. as a normal part of income.C. as an extraordinary item against income.D. as a footnote to the statements.E. only on the income tax statements.55. The law of one price is also known as: 31-14
Chapter 31 - International Corporate Finance56. Absolute purchasing power parity is also known as: 57. A firm engaging in international investments:

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