Social Science Questions
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Suppose the spot rate and forward rate for the British pound are $1.4248 and $1.4179 respectively. Assume the forward pound is selling at a 1.94% annualized discount, what is the number of days of the forward contract?a) 180 daysb) 120 daysc) 90 daysd) 60 days
12) Who owns the retained earnings of a public firm?A) Common stockholdersB) BondholdersC) Management D) The IRS
8) Which of the following is NOT considered a fixed asset?A) LandB) EquipmentC) Buildings D) Patents
4) Which of the following is the least liquid current asset?A) AccrualsB) Accounts receivableC) Marketable securitiesD) Inventory
The spot and 180‑day forward rates for the euro are $1.3310 and $1.3402, respectively. The euro is said to be selling at a forwarda) discount of 6.9%b) premium of 6.9%c) discount of 1.4%d) premium of 1.4%
When an importer goes long in the forward market, they would bea) buying currency for future deliveryb) selling currency for future deliveryc) arbitraging the interest rate differentiald) buying a forward contract at a premium
Hedgers, mostly _____________, engage in forward contracts on the foreign exchange markets to protect the home currency value of various foreign currency-denominated assets and liabilities on their balance sheets.a) commercial banksb) public utilitiesc) multinational corporationsd) speculators
Suppose pound sterling is quoted at $1.4419-36, and the Swiss franc is quoted at $0.6250-67. What is the direct quote for the pound in Zurich?a) 2.3035-70b) 2.3018- 88c) 2.3008-98d) 2.3020-50
The risk that a central bank will not make the necessary transfer of foreign currency to complete a currency settlement is known as ________ risk.a) exchange rate b) Herstattc) Interest-rated) settlement
The overwhelming majority of foreign exchange transactions involvea) multinational corporations buying and selling foreign exchangeb) importers and exporters buying and selling foreign exchangec) banks buying and selling foreign exchanged) governments buying and selling foreign exchange
Most international currency transactions are conducted bya) major banksb) arbitrageursc) speculatorsd) hedgers
It is 1985 and suppose the 90‑day forward quotes on the DM and the French franc are $.4002‑10 and $.1180‑90, respectively. What is the direct 90‑day forward quote for the franc in Frankfurt?a) 3.3625‑54b) 3.3631‑92c) .2943‑74d) .2949‑68
American terms refers to thea) number of U.S. dollars per unit of foreign currencyb) number of foreign‑currency units per U.S. dollarc) quotation system found in the United Statesd) bid‑ask spread on the U.S. dollar
Traders on the foreign exchange market use ___________ to eliminate or cover the risk of loss on export or import orders denominated in foreign currencies.a) currency optionsb) forward contractsc) money-market hedgesd) currency futures contracts
If the direct price of the dollar is DM2.5 in 1990 Frankfurt and transaction costs were .4% of the amount transacted, then the minimum‑ maximum direct quotes for the DM in New York were:a) $.3968‑4032 b) $2.4800‑2.5200c) $.3984‑.4016d) $2.4900‑2.5100
Most currency transactions are channeled through the worldwide ________ market which accounts for _______ of foreign exchange transactions.a) stock, 50%b) interbank, 50%c) interbank, 95%d) internet, 30%
Exports of goods and services by the United States by 2008 total more than_________ of gross domestic product.a) 10%b) 20%c) 50%d) 75%
A ___________ between a bank and a customer calls for a fixed delivery date, at a fixed exchange rate for a specified amount of one currency against another currency payment.a) spot quotationb) currency optionc) currency swapd) forward contract
When exchange rates are quoted as the number of U.S. dollars per unit of foreign currency, it is referred to as a) American termsb) European termsc) fixed-exchange termsd) spot-market terms
The world's largest currency trading market isa) New Yorkb) Frankfurtc) Tokyod) London