国际金融英文版习题Chapter3.docx

国际金融英文版习题Chapter3.docx

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国际金融英文版习题Chapter3

国际金融英文版习题Chapter-3

INTERNATIONALFINANCE

AssignmentProblems（3）Name:

Student#:

I.Choosethecorrectanswerforthefollowingquestions（onlyONEcorrectanswer）（2creditsforeachquestion,totalcredits2x25=50）

1.InterbankquotationsthatincludetheUnitedStatesdollarsareconventionallygivenin__________,whichstatetheforeigncurrencypriceofoneU.S.dollar,suchasabidpriceofSFr0.85/$.

A.indirectquote

B.directquote

C.Americanquote

D.Europeanquote

2.Thespotexchangeratepublishedinfinancialnewspapersisusuallythe__________.

A.nominalexchangerate

B.realexchangerate

C.effectiveexchangerate

D.equilibriumexchangerate

3.Theforeignexchangereferstothe__________.

A.foreignbanknotesandcoins

B.demanddepositsinforeignbanks

C.foreignsecuritiesthatcanbeeasilycashed

D.alloftheabove

4.Thefunctionsoftheforeignexchangemarketcomedownto__________.

A.convertingthecurrencyofonecountryintothecurrencyofanother

B.providingsomeinsuranceagainsttheforeignexchangerisk

C.makingtheforeignexchangespeculationeasy

D.OnlyAandBaretrue.

5.WhichofthefollowingisNOTtrueregardingtheforeignexchangemarket?

A.Itistheplacethroughwhichpeopleexchangeonecurrencyforanother.

B.Theexchangeratenowadaysismainlydeterminedbythemarketforces.

C.Mostforeignexchangetransactionsarephysicallycompletedinthismarket.

D.Alloftheabovearetrue.

6.Theworldlargestforeignexchangemarketsare__________respectively.

A.London,NewYorkandTokyo

B.London,ParisandFrankfurt

C.London,HongKongandSingapore

D.London,ZurichandBahrain

7.TheforeignexchangemarketisNOTefficientbecause__________.

A.monetaryauthoritiesdominatetheforeignexchangemarketandeverybodyknowsthatbydefinition,centralbanksareinefficient

B.commercialbanksandotherparticipantsofthemarketdonotcompetewithoneanotherduetothefactthattransactiontakesplacearoundtheworldandnotinasinglecentralizedlocation

C.foreignexchangedealershavedifferentpricessuchasbidandaskprices

D.Noneofthereasonslistedarecorrectbecausetheforeignexchangemarketisanefficientmarket

8.__________earnaprofitbyabid-askspreadoncurrenciestheybuyandsell.__________ontheotherhand,earnaprofitbybringingtogetherbuyersandsellersofforeignexchangesandearningacommissiononeachsaleandpurchase.

A.Foreignexchangebrokers;foreignexchangedealers

B.Foreignexchangedealers;foreignexchangebrokers

C.arbitragers;speculators

D.commercialbanks;centralbanks

9.MostforeignexchangetransactionsarethroughtheU.S.dollars.Ifthetransactionisexpressedasthecurrenciesperdollar,thisisknownas__________whereas__________areexpressedasdollarspercurrency.

A.directquote;indirectquote

B.indirectquote;directquote

C.Europeanquote;Americanquote

D.Americanquote,Europeanquote

10.FromtheviewpointofaJapaneseinvestor,whichofthefollowingwouldbeadirectquote?

A.SFr1.25/€

B.$1.55/₤

C.¥110/€

D.€0.0091/¥

11.Whichofthefollowingistrueabouttheforeignexchangemarket?

A.Itisaglobalnetworkofbanks,brokers,andforeignexchangedealersconnectedbyelectroniccommunicationssystem.

B.Theforeignexchangemarketisusuallylocatedinaparticularplace.

C.Theforeignexchangeratesareusuallydeterminedbytherelatedmonetaryauthorities.

D.Themainparticipantsinthismarketarecurrencyspeculatorsfromdifferentcountries.

12.Theextenttowhichtheincomefromindividualtransactionsisaffectedbyfluctuationsinforeignexchangevaluesisconsideredtobe_________.

A.Translationexposure

B.economicexposure

C.transactionexposure

D.accountingexposure

13.Whichofthefollowingexchangeratesisadjustedforpricechanges?

A.nominalexchangerate

B.realexchangerate

C.effectiveexchangerate

D.equilibriumexchangerate

14.SupposetheexchangerateoftheRMBversusU.S.dollaris¥6.8523/$now.IftheRMBweretoundergoa10%depreciation,thenewexchangerateintermsof¥/$wouldbe:

A.6.1671B.7.5375C.6.9238D.7.6135

15.AtleastinaU.S.MNC’sfinancialaccountingstatement,ifthevalueoftheeurodepreciatesrapidlyagainstthatofthedollaroverayear,thiswouldreducethedollarvalueoftheeuroprofitmadebytheEuropeansubsidiary.Thisisatypical__________.

A.transactionexposure

B.translationexposure

C.economicexposure

D.operatingexposure

16.AJapanese-basedfirmexpectstoreceivepound-paymentin6months.Thecompanyhasa（an）__________.

A.economicexposure

B.accountingexposure

C.longpositioninsterling

D.shortpositioninsterling

17TheexposuretoforeignexchangeriskknownasTranslationExposuremaybedefinedas__________.

A.changeinreportedowner’sequityinconsolidatedfinancialstatementscausedbyachangeinexchangerates

B.theimpactofsettlingoutstandingobligationsenteredintobeforechangeinexchangeratesbuttobesettledafterchangeinexchangerates

C.thechangeinexpectedfuturecashflowsarisingfromanunexpectedchangeinexchangerates

D.Alloftheabove

triangulararbitrage?

Ifso,showstepsandcalculatetheamountofprofitinSwissfrancs.（8credits）

12.Ifthedollarappreciates1000%againsttheruble,bywhatpercentagedoestherubledepreciateagainstthedollar?

（5credits）

13.Asapercentageofanarbitrarystartingamount,abouthowlargewouldtransactionscostshavetobetomakearbitragebetweentheexchangeratesSSFr/$=SFr1.7223/$,S$/￥=$0.009711/¥,andS￥/SFr=¥61.740/SFrunprofitable?

Explain.（7credits

14.Youaregiventhefollowingexchangerates:

S￥/A$=67.05–68.75

S￡/A$=0.3590–0.3670

CalculatethebidandaskrateofS￥/￡:

（5credits）

15.SupposethespotquotationontheSwissfranc（CHF）inNewYorkisUSD0.9442–52andthespotquotationontheEuro（EUR）isUSD1.3460–68.Computethepercentagebid-askspreadsontheCHF/EURquote.（5credits）

AnswerstoAssignmentProblems（3）

PartI

1.D

2.A

3.D

4.D

5.D

6.A

7.D

8.B

9.C

10.C

11.A

12.A

13.B

14.D

15.B

16.C

17.A

18.D

19.B

20.A

21.B

22.B

23.C

24.C

25.D

PartII

1.0.70x（105.3/102.5）=0.7x1.0273=0.7191

2.12.2x（105.3/110.5）=12.2x.9529=11.6259

3.B（0.7/.75）–1=-6.67%

4.D（1/12.2）/（1/11.8）–1=-3.28%

5.550

6.360

7.550/910=60.44%

8.360/910=39.56

9.（0.70/0.75）（60.44%）+（12.2/11.8）（39.56%）=.5641+0.4090=.9731=97.31%

10.weaker,becausedollardepreciatedby2.69%.

11.SinceS￥/$S$/SFrSSFr/￥=80x1/0.8900x1/95.00=0.946186<1,thereisanarbitrageopportunity.

Steps:

①Buy¥fromDeutscheBank,SFr10millionx95.00=¥950million

②Buy$fromFujiBank,$950m/80.00=$11.875m

③BuySFrfromUBS,$11.875x0.8900=SFr10.56875m

Profit（ignoringtransactionfees）:

SFr10.56875–SFr10=0.56875million=568,750

12.（x–1）=1000%;1/11–1=90.9%

13.SSFr/$S$/￥S￥/SFr=SFr1.7223/$x$0.009711/¥x¥61.740/SFr=1.0326

Iftransactioncostsexceed$0.0326（3.26%）,thearbitrageisunprofitable.

14.Given:

S￥/A$=67.05–68.75

S￡/A$=0.3590–0.3670

So,S￥/₤=67.05/0.3670=182.70（bid）

S￡/₤=68.75/0.3590=191.50（ask）

15.Given:

USD0.9442–52/SFr

USD1.3460–68/SFr

So,SSRr/€=1.3460/0.9452=1.424（bid）

SSFr/€=1.3468/0.9442=1.4264（ask）

Bid-askmargin=（1.4264–1.424）/1.4264=0.1683%