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International Finance.d

International Finance.d

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80 вопросов Вариант 1 Доступ 7 дней
Содержание теста

Вопросы и варианты

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Вопрос 1

The currency used to buy imported goods is

  1. the buyer's home currency
  2. the seller's home currency
  3. the currency of a third country
  4. special drawing rights
Вопрос 2

If portable disk players made in China are imported into the United States, the Chinese manufacturer is paid with

  1. international monetary credits
  2. dollars
  3. yuan, the Chinese currency
  4. euros, or any other third currency
Вопрос 3

If the United States sells beef to Japan, the U.S. beef producer is paid with

  1. euros, or any other third currency
  2. dollars
  3. yen, the Japanese currency
  4. international monetary credits
Вопрос 4

When Safeway supermarkets in the United States buys strawberries from Mexico,

  1. it must use dollars to pay Mexican farmers
  2. it may use any currency it chooses
  3. it must use pesos to pay Mexican farmers
  4. the transaction shows up in the U.S. capital account
Вопрос 5

A country records its international finance accounts in its

  1. balance of payments accounts
  2. import/export log accounts
  3. trade payments accounts
  4. net exports payments account
Вопрос 6

A country's balance of payments accounts record is

  1. its international trading, borrowing, and lending
  2. only its official transactions with other governments
  3. the country's net indebtedness to foreigners
  4. the flow of human and nonhuman resources between it and its trading partners
Вопрос 7

A country's balance of payments accounts include all of the following EXCEPT

  1. military account
  2. capital account
  3. current account
  4. official settlements account
Вопрос 8

The balance of payments accounts include the

  1. non-performing account
  2. export bank account
  3. current account
  4. exim bank account
Вопрос 9

In part, a country's current account measures

  1. its current debt as opposed to its long-term debt
  2. receipts from the sale of goods and services to foreigners and payments for goods and services bought from foreigners
  3. net increases and decreases in a country's holdings of foreign currency
  4. borrowing and lending activity between the country's residents and foreigners
Вопрос 10

The balance of payments account used to record payments for imported goods and services is the

  1. exim account
  2. current account
  3. capital account
  4. import account
Вопрос 11

If a firm based in the Netherlands wishes to avoid the risk of exchange rate movements, and is due to receive USD100,000 in 90 days, it could:

  1. purchase US dollars 90 days from now at the spot rate
  2. sell US dollars 90 days from now at the spot rate
  3. enter into a 90-day forward sale of US dollars for euros
  4. enter into a 90-day forward purchase of US dollars for euros
Вопрос 12

Under a fixed exchange rate system:

  1. a forward foreign exchange market does not exist as it would be pointless since rates do not move
  2. central bank intervention in the foreign exchange market is often necessary
  3. central bank intervention in the foreign exchange market is not permitted
  4. central bank intervention in the foreign exchange market is not necessary since rates do not move
Вопрос 13

Given a home country and a foreign country, purchasing power parity suggests that:

  1. the home currency will depreciate if the current home inflation rate exceeds the current foreign inflation rate
  2. the home currency will appreciate if the current home inflation rate exceeds the current foreign inflation rate
  3. the home currency will depreciate if the current home inflation rate exceeds the current foreign interest rate
  4. the home currency will depreciate if the current home interest rate exceeds the current foreign interest rate
Вопрос 14

If purchasing power parity were to hold even in the short run, then:

  1. real exchange rates should tend to increase over time
  2. real exchange rates should tend to decrease over time
  3. quoted nominal exchange rates should be stable over time
  4. real exchange rates should be stable over time
Вопрос 15

If Euro-sterling interest rates were consistently below Eurodollar interest rates, then for the international Fisher effect to hold:

  1. the value of the British pound against the dollar would appreciate in some periods and depreciate in others, but on average, there would be a zero rate of appreciation
  2. the value of the British pound would tend to appreciate against the dollar
  3. the value of the British pound would tend to depreciate against the dollar
  4. the real value of the British pound would remain constant most of the time
Вопрос 16

A US exporter denominates its Ruritanian exports in Ruritanian doppels (RUD) and expects to receive RUD600,000 in one year. What will be the approximate value of these exports in 1 year in US dollars if the firm executes a forward hedge?

  1. $236,127
  2. $240,000
  3. $238,584
  4. $234,000
Вопрос 17

If direct spot quotations in New York and London were $1.5995–1.6000 and £0.6250–0.6254 respectively, arbitrage profits per $1m would be:

  1. $640
  2. $327
  3. 0
  4. $313
Вопрос 18

Calculate the forward per annum premium or discount given the following quotes. Spot £1 = $1.4000; 3 months forward £1 = $1.4200.

  1. The $ is at a discount of 5.71 per cent
  2. The $ is at a premium of 1.43 per cent
  3. The $ is at a discount of 1.43 per cent
  4. The $ is at a premium of 5.71 per cent
Вопрос 19

The international Fisher effect suggests that should pound interest rates exceed US dollar interest rates:

  1. UK inflation rate will decrease
  2. the pound will depreciate against the dollar
  3. the pound will be at a discount on the dollar
  4. the pound’s value will remain constant
Вопрос 20

Inflation in the United States and Sweden is expected to be 4 and 9 per cent, respectively, in the forthcoming year and 6 and 7 per cent, respectively, in the year following. The current spot rate for the Swedish krona is $0.1050. Based on purchasing power parity, the expected spot value for the Swedish krona in two years would be:

  1. $0.1024
  2. $0.1074
  3. $0.0992
  4. $0.1111
Вопрос 21

A forward exchange contract is an agreement to exchange currencies at a … date at a pre-contracted exchange rate. Forward contracts are written by banks and trade between banks in the interbank market and are sold to bank’s clients.

  1. Past
  2. Future
  3. Present
Вопрос 22

As with the spot market, the forward market is a decentralized, continuous open-bid double-auction market. Forward exchange trades in both outright and swap form, where the latter involves the purchase/sale and subsequent sale/purchase of a … .

  1. Currency
  2. Options
  3. Bonds
Вопрос 23

A forward premium on a foreign currency means that the forward value of the foreign currency … the currency’s spot value. A forward discount means the forward value is less than the spot value.

  1. Exceeds
  2. Decrease
  3. Equal
Вопрос 24

If speculators are risk neutral and we ignore transaction costs, the forward exchange rate … the market’s expected future spot rate.

  1. Increase
  2. Decrease
  3. Equal
Вопрос 25

Payoff profiles show the change in value of an asset or liability that is associated with unanticipated changes in … rates. For forward contracts, payoff profiles are upward- or downward-sloping straight lines.

  1. Exchange
  2. Market
  3. Historic
Вопрос 26

Swaps, which involve a double exchange – usually a spot exchange subsequently reversed by a forward exchange – are traded between banks so that individual banks can efficiently manage their foreign exchange risk.

  1. True
  2. False
Вопрос 27

Options are also valuable to international investors and borrowers, whereas outright forwards are valuable to importers and exporters.

  1. True
  2. False
Вопрос 28

In the interbank market forward exchange rates are quoted as the spot rate plus or minus swap points. The swap points are added to or subtracted from the spot rate depending respectively on the ascending or descending order of the swap points.

  1. True
  2. False
Вопрос 29

It is possible to tell from the order of options points whether a currency is at a forward premium or discount.

  1. True
  2. False
Вопрос 30

Forward bid and ask spreads widen with increased maturity because of the increasing thinness of markets as maturity increases. It is harder to keep buy and sell orders balanced simply by changing the bid-ask rates in markets with fewer transactions.

  1. True
  2. False
Вопрос 31

Currency futures are bets on what will happen to the spot exchange rate, settled … .

  1. Every day
  2. Every Week
  3. Every month
Вопрос 32

… are traded in specialized markets in standard contract sizes, such as d125,000. There are relatively few maturity dates.

  1. Futures
  2. Swaps
  3. Options
Вопрос 33

Because of their low transaction costs and easy settlement, currency futures appeal to … .

  1. Governments
  2. People
  3. Speculators
Вопрос 34

The payoff profiles for futures are similar to those for forward contracts, except that futures outcomes are a little … because of marking-to-market risk.

  1. Certain
  2. Higher
  3. Uncertain
Вопрос 35

Marking-to-market risk is the result of uncertainty in the path of the future’s contract value between purchase and sale and the volatility of … rates.

  1. Banks
  2. Supplier
  3. Interest
Вопрос 36

Futures and forward exchange rates are linked by arbitrage.

  1. True
  2. False
Вопрос 37

Currency options give buyers the right or opportunity, but not the obligation, to buy or sell foreign exchange at a pre-agreed exchange rate, the strike exchange rate. Call options give the buyer the right to purchase the foreign currency at the strike exchange rate, and put options give the buyer the right to sell the foreign currency at the strike exchange rate.

  1. True
  2. False
Вопрос 38

American options allow the buyer to exercise after to the expiry of the option, while European options allow the buyer to exercise before the expiry date of the option.

  1. True
  2. False
Вопрос 39

The value of an option depends on the extent to which it is in the money, that is, the extent to which the option has intrinsic value, and also on the volatility of the underlying exchange rate, the interest rate on the currency paid for the option, the forward exchange premium or discount and the length of time to expiration. The value of the option can also be considered to depend on the interest rate differential, which, like the forward premium or discount, reflects the expected path of the exchange rate.

  1. True
  2. False
Вопрос 40

An over-the-counter customized options market coexists with the exchange-based currency options. Over-the-counter options are written by governments.

  1. True
  2. False
Вопрос 41

The … account is a record of the flow of payments between the residents of one country and the rest of the world in a given period.

  1. Balance-of-payments
  2. Options
  3. Swaps
Вопрос 42

The balance-of-payment account is based on … .

  1. Market
  2. Future
  3. Double-entry bookkeeping
Вопрос 43

… entries in the balance of payments result from purchases by foreigners of a country’s goods, services, goodwill, financial and real assets, gold and foreign exchange.

  1. Debit
  2. Credit
  3. Withdraw
Вопрос 44

The … account includes trade in goods and services, income and unilateral transfers.

  1. Current
  2. Debit
  3. Credit
Вопрос 45

A … account deficit can be financed by selling a country’s bills, bonds, stocks, real estate, or businesses.

  1. Current
  2. Debit
  3. Credit
Вопрос 46

Purchases and sales of financial and real assets result in a supply of or demand for a country’s currency in the same way as purchases and sales of goods and services.

  1. True
  2. False
Вопрос 47

Changes in official reserves occur when governments intervene in the foreign exchange markets to influence exchange rates. When exchange rates are truly flexible, changes in official reserves are zero.

  1. True
  2. False
Вопрос 48

Since all entries in the balance of payments should collectively sum to zero, the balance of- payments accountant can determine the errors that were made. This is called the statistical discrepancy.

  1. True
  2. False
Вопрос 49

With constant exchange rates, the correctly measured deficit/surplus in the current account equals the correctly measured surplus/deficit in the capital account.

  1. True
  2. False
Вопрос 50

It is equally valid to consider a current-account deficit/surplus to be the cause of, or to be caused by, a capital-account surplus/deficit.

  1. True
  2. False
Вопрос 51

Flexible exchange rates are determined by the forces of … supply and demand.

  1. Currency
  2. Jobs
  3. Profit
Вопрос 52

We can construct the supply curve of a currency from a country’s demand curve for … , and the demand curve for a currency from the country’s supply curve of exports.

  1. Exports
  2. Imports
  3. Duties
Вопрос 53

The effect of any item in the … account on the exchange rate can be determined by identifying how it shifts the currency supply or currency demand curve.

  1. GDP
  2. Trade Deficit
  3. Balance-of-payments
Вопрос 54

… , an improvement in a country’s terms of trade causes the country’s currency to appreciate.

  1. Ceteris paribus
  2. Balance of Payments
  3. Trade Deficit
Вопрос 55

… that is higher than in other countries causes a country’s currency to depreciate. If inflation in different countries is equal, ceteris paribus, exchange rates do not change.

  1. Inflation
  2. Deflation
  3. Demand
Вопрос 56

If import demand is … the currency supply curve slopes downward.

  1. Inelastic
  2. Elastic
  3. Same
Вопрос 57

When the supply curve slopes upwards the foreign exchange market may be unstable.

  1. True
  2. False
Вопрос 58

Because import demand elasticities are larger in the short run than in the long run, instability is more likely in the short run than the long run.

  1. True
  2. False
Вопрос 59

The same conditions that cause short-run instability and long-run stability result in a J curve. The J curve shows that a depreciation can temporarily worsen the balance of trade, while an appreciation can temporarily improve the balance of trade.

  1. True
  2. False
Вопрос 60

The phenomenon of an initial worsening and subsequent improvement of the trade balance after a depreciation is known as the J-curve effect.

  1. True
  2. False
Вопрос 61

The law of one price states that a commodity will have the … price in terms of a common currency in every country.

  1. Higher
  2. Lower
  3. Same
Вопрос 62

The law follows from commodity arbitrage, which involves buying in the … country if prices are different.

  1. Highest
  2. Cheapest
  3. Largest
Вопрос 63

It follows from the law of one price that the dollar price of a commodity in the United States … the pound price of the commodity in Britain multiplied by the spot exchange rate of dollars per British pound.

  1. Higher
  2. Lower
  3. Equal
Вопрос 64

Deviations from this relationship can be caused by transportation costs and … tariffs.

  1. Imports
  2. Exports
  3. Production
Вопрос 65

The principle of PPP is the extension of the law of one price to prices of a basket of goods. In its absolute form, PPP says that the dollar price of a basket of goods in the United States is the pound price of the basket in Britain, … by the exchange rate of dollars per pound.

  1. Divided
  2. Multiplied
  3. Subtracted
Вопрос 66

In its relative form, PPP says that the rate of change of the exchange rate is approximately equal to the difference between inflation rates.

  1. True
  2. False
Вопрос 67

Speculation and efficient markets also produce the relative form of the PPP condition in terms of expected values.

  1. True
  2. False
Вопрос 68

Empirical support for the PPP condition is high, although there is some evidence it may hold in the long run.

  1. True
  2. False
Вопрос 69

The reasons the law of one price and PPP do not hold include transportation costs, tariffs, quotas, and the fact that there are goods and services that are non-tradable.

  1. True
  2. False
Вопрос 70

The fact that empirical evidence does support PPP may be due to statistical difficulties in evaluating the principle.

  1. True
  2. False
Вопрос 71

There are several reasons why … should be performed by the firm rather than by its shareholders.

  1. Hedging
  2. Buying
  3. Selling
Вопрос 72

An importer or exporter faces exposure and risk because of … between agreeing on a foreign-currency price and settling the transaction.

  1. Delay
  2. Deciding
  3. Timely
Вопрос 73

The expected cost of hedging is the difference between the forward exchange rate for buying/selling and the expected future … for buying/selling.

  1. Swap Rate
  2. Spot Rate
  3. Option rate
Вопрос 74

The expected cost of hedging can be estimated as … of the difference between the forward spread and the spot spread.

  1. One Half
  2. One Third
  3. One Fourth
Вопрос 75

The decision to use … hedging does not depend on there being a forward-risk premium. The premium represents a cost and a benefit.

  1. Backward
  2. Forward
  3. Close
Вопрос 76

The bid-ask spread on short-maturity forward transactions does not substantially exceed that on spot transactions, so that the expected cost of forward hedging is small.

  1. True
  2. False
Вопрос 77

Futures-market hedging achieves essentially the different result as forward hedging.

  1. True
  2. False
Вопрос 78

Foreign-currency accounts payable can be hedged by buying a call option on the foreign currency, and accounts receivable can be hedged by buying a put option on the foreign currency.

  1. True
  2. False
Вопрос 79

An importer can hedge with a swap by borrowing in the home currency, buying the foreign-currency spot, and investing in the foreign currency.

  1. True
  2. False
Вопрос 80

Foreign exchange exposure can be eliminated by invoicing in foreign currency.

  1. True
  2. False