Fall-2 MBA, 2016
On all problems show your calculations.
Suppose that the current exchange rate is 0.88 = $1.00. The direct quote, from the U5. perspective is:
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1. A trade deficit, which is also referred to as net exports, is an economic condition that occurs when a
country is importing more goods than it is exporting. The deficit equals the value of goods being
imported minus the value of goods being exported, a
I will ask several short answer questions. You should be prepared to write several
sentences to respond to questions covering:
1) issues with the financial valuation of an international firm
International Finance Home Work 3
By Cristian Turean
1) The dollar-euro exchange rate is $1.14 = 1.00 and the yen-dollar exchange rate is 105 = $1.00. What
is the euro-yen cross rate?
Dollar-yen = 1/1.05 = 0.9524
Euro-yen = (USD/YEN)/(USD/EUR)= 0.9524/1.1
2.a. Mercantilism, which originated in Europe during the period of absolute monarchies, holds that
precious metals like gold and silver are the key components of national wealth, and that a continuing
trade surplus should be a major policy goal as it ensu
Please consider these questions concerning a country's balance of payments.
1) How does a trade surplus or deficit affect a country's unemployment rate? (Assume other
factors remain constant.)
2) What happens to a country's
Please answer the following questions:
1) The dollar-euro exchange rate is $1.14 = 1.00 and the yen-dollar exchange rate is 105 =
$1.00. What is the euro-yen cross rate?
1 = 119.7
2) Suppose you observe a spot exchange rate