1. Saguaro Funds. Tony Begay, a currency trader for Chicago-based Saguaro Funds, uses futures quotes
on British pounds to speculate on the value of the pound. Use the futures quotes in the table at the
bottom of the page to answer the following q
The International Financial
Look at firm goals, ownership structure and
This course concentrates on the
financial operations of all firms
More emphasis is placed
Identify problems in the 1930s that lead up to the
Bretton Woods System
Problems of the 1930s
Some of the problems exist today though they tend
not to be as severe.
Delegates to the Bretton Woods Conference in 1944
wanted to avoid/eliminate these problems
Both Forward and Future contracts
allow one to purchase currencies for
In the U.S. the most important market
for foreign currencies futures is the
International Money Market (IMM), a
division of the Chicago Mercantile
10) For most firms, the cost of capital decreases to a low point as the firm _ debt financing. At some point beyond this
optimal level, the cost of capital increases as the amount of debt _.
A) decreases; increases
B) decreases; decreases
C) increases; in
76) _ are domestic currencies of one country on deposit in a second country.
C) Federal funds
D) Discount window deposits
77) Of the following, which was NOT cited by the authors as a valuable function provided by the Eurocurre
67) The sale of a security to a small set of qualified institutional buyers is called a _.
A) depository receipt
B) private placement
C) fixed income security
D) None of the above
68) Which of the following conclusions is NOT supported by recent empirical
57) Empirical evidence has found that on average public firms that have been privatized by issuing public equity have _.
A) improved profitability
B) higher debt levels
C) lower real sales
D) All of the above
58) Empirical evidence has found that on avera
37) Which of the following are not contributing factors to the dominance of the London and New York Stock exchanges?
A) attractive tax environments
B) low levels of corruption
C) attractive regulatory environments
D) All are contributing factors
CHAPTER 14 RAISING EQUITY AND DEBT GLOBALLY
1) The choice of when and how to source equity/capital globally is usually aided early on by the advice of:
A) an investment banker.
B) your stock broker.
C) a commercial banker.
D) an underwriter.
85) Foreign bonds sold in the United States are nicknamed Yankee bonds, foreign bonds sold in Japan are called Samurai
bonds. What are foreign bonds sold in the United Kingdom nicknamed?
A) Union Jacks
86) A _ is a bon
19) Of the following, which is NOT identified by the authors as a country-specific environmental variable key to determining debt
A) historical development (agency costs)
B) taxation (governmental regulations)
C) corporate governance (the existenc
47) Which of the following is NOT an advantage of ADRs to U.S. shareholders?
A) Transfer of ownership is done in the U.S. in accordance with U.S. laws.
B) In the event of the death of the shareholder, the estate does not go through a foreign court.
27) TropiKana Inc., a U.S firm, has just borrowed euro 1,000,000 to make improvements to an Italian fruit plantation and
processing plant. If the interest rate is 5.50% per year and the Euro appreciates against the dollar from $1.40/ at the time the loan
12. Decision tree with multiple decision points Aa Aa 3
Purple Whale Inc. Co. is planning to add a new product line to make iBooks. However, Purple Whale Inc. is considering the possibility of abandoning the project
if the demand for the new product is lo
Chapter 5 Problem 8
NET PLANT & EQIUP.
FIN 435 Module 8 Chapter 10 Homework
Siam Cement, the Bangkok-based cement manufacturer, suffered enormous losses with the coming of
the Asian crisis in 1997. The Company had been pursuing a very aggressive growth strategy in the mid1990s, takin
Module 6 Homework Chapter 6
2a The Argentine peso was fixed through a currency board at Ps 1.00/$ throughout the 1990s. In
January 2002, the Argentine peso was floated. On January 29, 2003, it was trading at Ps 3.2/$. During
the one year period, Argentina
Problem 7 Mexican Peso Changes
Mexico officially changed the value of the Mexican peso from 3.2 peso per dollar to 5.5 pesos per dollar.
What was the percentage change in its value? (3.2-5.5)/5.5 = -41.81%
Was this a depreciation, devaluation, a