1. Bank A quotes a bid price of $1.52 and an ask price of $1.54 for the British pound. Bank B
quotes a bid price of $1.51 and an ask price of $1.53 for the British pound. If a trader has
$100,000 to invest, what should the trader do to take advantage of l
Chapter 4 Exchange Rate Determination
1. The value of the Australian dollar (A$) today is $0.73. Yesterday, the value of the
Australian dollar was $0.69. The Australian dollar _ by _%.
A) depreciated; 5.80
B) depreciated; 4.00
C) appreciated; 5.80
Chapter 19 Financing International Trade
1. Which of the following is a reason why commercial banks can facilitate international
A) The exporter may not wish to accept credit risk of the importer.
B) The government may impose exchange contracts tha
1. Consider an exporter that sells its accounts receivables off to another firm that becomes
responsible for obtaining cash from the various importers. This reflects:
a. accounts receivable financing. c. factoring.
b. consignment. d. a letter of credit
Chapter 6 Government Influence on Exchange Rates
1. To force the value of the pound to appreciate against the dollar, the Federal Reserve
A) sell dollars for pounds in the foreign exchange market and the European Central Bank
(ECB) should sell dol
FIN 4604: Sample Questions III
1). Assume that the Swiss franc has an annual interest rate of 8% and is expected to depreciate by 6%
against the dollar. From a U.S. perspective, the effective financing rate from borrowing francs is:
FINA312 / FINA517 16B
Assume you purchased 200 shares of XYZ common stock on margin at $70 per share
from your broker. If the initial margin is 55%, how much did you borrow from the
FINA312 / FINA517 15B
TUTORIAL SESSION 01
The basic trade-off in the investment process is
a. between the anticipated rate of return for a given investment instrument and its
degree of risk.
b. between understanding the nature of a particula