2024 – FIN 534 Quiz 10 week 11 Rating A 534 FIN QUIZ 10 CHAPTER 17 Question

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>fin 534 quiz 10 week 11

FIN 534 Quiz 10 week 11

Rating A

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534 FIN QUIZ 10  (CHAPTER 17)

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Question 1 2 out of 2 points

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.

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>question 2 2

Question 2 2 out of 2 points

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?

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Question 3 2 out of 2 points

Purchasing power parity

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?

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Question 4 2 out of 2 points

Which of the following statements is NOT CORRECT?

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Question 5 2 out of 2 points

Suppose a foreign investor who holds tax-exempt Eurobonds paying 9% is considering investing in an equivalent-risk domestic bond in a country with a 28% withholding tax on interest paid to foreigners.

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Question 6 2 out of 2 points

If the inflation rate in the United States is greater than the inflation rate in Britain, other things held constant, the British pound will

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Question 7 2 out of 2 points

If one Swiss franc can purchase $0.71 U.S. dollars, how many Swiss francs can one U.S. dollar buy?

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Question 8 2 out of 2 points

>suppose 90-day investments

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 90day forward market, 1 British pound equals $1.65.

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Question 9 2 out of 2 points

If one U.S. dollar buys 1.64 Canadian dollars, how many U.S. dollars can you purchase for one Canadian dollar?

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Question 10 2 out of 2 points

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.

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Question 11 2 out of 2 points

Foreign exchange market

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?

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Question 12 2 out of 2 points

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?

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Question 13 2 out of 2 points

Suppose in the spot market 1 U.S. dollar equals 1.60 Canadian dollars. 6-month Canadian securities have an annualized return of 6% (and thus a 6-month periodic return of 3%). 6month U.S. securities have an annualized return of 6.5% and a periodic return of 3.25%. If interest rate parity holds, what is the U.

S.

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Question 14 2 out of 2 points

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?

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Question 15 2 out of 2 points

 

Suppose that currently, 1 British pound equals 1.62 U.S. dollars and 1 U.S. dollar equals 1.62 Swiss francs. What is the cross exchange rate between the pound and the franc?