International Finance Sample Questions
1. An arbitrage is best defined as
A. A legal condition imposed by the CFTC.
B. The act of simultaneously buying and selling the same or equivalent assets or commodities for the
BUS 331: International Finance
Instructor: Dr. Keli Xiao
Office: Harriman Hall, Room 314E
Office Hours: Tuesday 3:00pm 4:00pm
Email: [email protected]
Time: Tuesday and Thursday, 4:00pm 5:20pm
Classroom: Harriman Hall 111
Capital budgeting, for example planning to invest another plants.
Capital structure, for example paying back long-term debt that company had.
Working capital management, for example paying back money that company owned t
International Finance Full 2015
Homework 1 (Due on 3/2)
1. The Financial Management Decision Process. What are the three types of financial
management decisions? For each type of decision, give an example of a business transaction
that would be relevant.
1. A statement that summarized an economys transactions with the rest of the
world for a specified time period.
2. A country can run an overall BOP deficit or surplus by engaging in the official
reserve transactions. For examp
1. Yes. The reason that they should is because EARs can provide the relevant rate.
2. Since the payment is $25,000 per year forever, I apply to the perpetuity formula
Pv=PMT/r, and r=6%. So Pv= $416666.67. You will pay $416666
1. Describe the difference between a swap broker and a swap dealer.
A swap broker arranges a swap between two counterparties for a fee without
taking a risk position in the swap.
A swap dealer is a market maker of swaps and as
An arbitrage is best defined as the act of simultaneously buying and selling the
same or equivalent assets or commodities for the purpose of making
When interest rate parity (IRP) does not hold there are opportunities fro covered