FIN 534 Week 11 Quiz 10 Chapter 17To Purchase Click Link
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534 Week 11 Quiz 10 Chapter 17Question 1
Suppose DeGraw Corporation, a U.S. exporter, sold a solar
heating station to a Japanese customer at a price of 143.5 million
yen, when the exchange rate was 140 yen per dollar. In order to
close the sale, DeGraw agreed to make the bill payable in yen, thus
agreeing to take some exchange rate risk for the transaction. The
terms were net 6 months. If the yen fell against the dollar such
that one dollar would buy 154.4 yen when the invoice was paid, what
dollar amount would DeGraw actually receive after it exchanged yen
for U.S. dollars?Answer Question 2
Suppose 144 yen could be purchased in the foreign exchange
market for one U.S. dollar today. If the yen depreciates by 8.0%
tomorrow, how many yen could one U.S. dollar buy tomorrow?Answer
Question 3
Suppose one British pound can purchase 1.82 U.S. dollars today
in the foreign exchange market, and currency forecasters predict
that the U.S. dollar will depreciate by 12.0% against the pound
over the next 30 days. How many dollars will a pound buy in 30
days?Answer Question 4
Suppose 6 months ago a Swiss investor bought a 6-month U.S.
Treasury bill at a price of $9,708.74, with a maturity value of
$10,000. The exchange rate at that time was 1.420 Swiss francs per
dollar. Today, at maturity, the exchange rate is 1.324 Swiss francs
per dollar. What is the annualized rate of return to the Swiss
investor?Answer Question 5
A box of candy costs 28.80 Swiss francs in Switzerland and $20
in the United States. Assuming that purchasing power parity (PPP)
holds, what is the current exchange rate?Answer Question 6
Suppose one year ago, Hein Company had inventory in Britain
valued at 240,000 pounds. The exchange rate for dollars to pounds
was 1 = 2 U.S. dollars. This year the exchange rate is 1 = 1.82
U.S. dollars. The inventory in Britain is still valued at 240,000
pounds. What is the gain or loss in inventory value in U.S. dollars
as a result of the change in exchange rates?Answer Question 7
Which of the following is NOT a reason why companies move into
international operations?Answer Question 8
If one U.S. dollar buys 1.64 Canadian dollars, how many U.S.
dollars can you purchase for one Canadian dollar?Answer Question
9
If the inflation rate in the United States is greater than the
inflation rate in Britain, other things held constant, the British
pound willAnswer Question 10
In 1985, a given Japanese imported automobile sold for 1,476,000
yen, or $8,200. If the car still sold for the same amount of yen
today but the current exchange rate is 144 yen per dollar, what
would the car be selling for today in U.S. dollars?Answer Question
11
Suppose the exchange rate between U.S. dollars and Swiss francs
is SF 1.41 = $1.00, and the exchange rate between the U.S. dollar
and the euro is $1.00 = 1.64 euros. What is the cross-rate of Swiss
francs to euros?Answer Question 12
Suppose hockey skates sell in Canada for 105 Canadian dollars,
and 1 Canadian dollar equals 0.71 U.S. dollars. If purchasing power
parity (PPP) holds, what is the price of hockey skates in the
United States?Answer Question 13
If one Swiss franc can purchase $0.71 U.S. dollars, how many
Swiss francs can one U.S. dollar buy?Answer Question 14
Suppose 90-day investments in Britain have a 6% annualized
return and a 1.5% quarterly (90-day) return. In the U.S., 90-day
investments of similar risk have a 4% annualized return and a 1%
quarterly (90-day) return. In the 90-day forward market, 1 British
pound equals $1.65. If interest rate parity holds, what is the spot
exchange rate?Answer Question 15
Which of the following statements is NOT CORRECT?Answer
