国际金融FinanceTestBank4.docx
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国际金融FinanceTestBank4
Chapter4—ExchangeRateDetermination
加息会降低通货膨胀
本国货币就增值
涨价了，出口就会减少
进口就会增加
1.ThevalueoftheAustraliandollar（A$）todayis$0.73.Yesterday,thevalueoftheAustraliandollarwas$0.69.TheAustraliandollar____by____%.
a.
depreciated;5.80
b.
depreciated;4.00
c.
appreciated;5.80
d.
appreciated;4.00
ANS:
C
SOLUTION:
（$0.73−$0.69）/$0.69=5.80%
PTS:
1
2.Ifacurrency'sspotratemarketis____,itsexchangerateislikelytobe____toasinglelargepurchaseorsaletransaction.
a.
liquid;highlysensitive
b.
illiquid;insensitive
c.
illiquid;highlysensitive
d.
noneoftheabove.
ANS:
CPTS:
1
3.____isnotafactorthatcausescurrencysupplyanddemandschedulestochange.
a.
Relativeinflationrates
b.
Relativeinterestrates
c.
Relativeincomelevels
d.
Expectations
e.
Alloftheabovearefactorsthatcausecurrencysupplyanddemandschedulestochange.
ANS:
EPTS:
1
4.AlargeincreaseintheincomelevelinMexicoalongwithnogrowthintheU.S.incomelevelisnormallyexpectedtocause（assumingnochangeininterestratesorotherfactors）a（n）____inMexicandemandforU.S.goods,andtheMexicanpesoshould____.
a.
increase;appreciate
b.
increase;depreciate
c.
decrease;depreciate
d.
decrease;appreciate
ANS:
BPTS:
1
5.AnincreaseinU.S.interestratesrelativetoGermaninterestrateswouldlikely____theU.S.demandforeurosand____thesupplyofeurosforsale.
a.
reduce;increase
b.
increase;reduce
c.
reduce;reduce
d.
increase;increase
ANS:
APTS:
1
6.InvestorsfromGermany,theUnitedStates,andtheU.K.frequentlyinvestineachotherbasedonprevailinginterestrates.IfBritishinterestratesincrease,Germaninvestorsarelikelytobuy____dollar-denominatedsecurities,andtheeuroislikelyto____relativetothedollar.
a.
fewer;depreciate
b.
fewer;appreciate
c.
more;depreciate
d.
more;appreciate
ANS:
APTS:
1
7.Whenthe"real"interestrateisrelativelylowinagivencountry,thenthecurrencyofthatcountryistypicallyexpectedtobe:
a.
weak,sincethecountry'squotedinterestratewouldbehighrelativetotheinflationrate.
b.
strong,sincethecountry'squotedinterestratewouldbelowrelativetotheinflationrate.
c.
strong,sincethecountry'squotedinterestratewouldbehighrelativetotheinflationrate.
d.
weak,sincethecountry'squotedinterestratewouldbelowrelativetotheinflationrate.
ANS:
DPTS:
1
8.AssumethattheinflationratebecomesmuchhigherintheU.K.relativetotheU.S.Thiswillplace____pressureonthevalueoftheBritishpound.Also,assumethatinterestratesintheU.K.begintoriserelativetointerestratesintheU.S.Thechangeininterestrateswillplace____pressureonthevalueoftheBritishpound.
a.
upward;downward
b.
upward;upward
c.
downward;upward
d.
downward;downward
ANS:
CPTS:
1
9.Ingeneral,whenspeculatingonexchangeratemovements,thespeculatorwillborrowthecurrencythatisexpectedtoappreciateandinvestinthecountrywhosecurrencyisexpectedtodepreciate.
a.True
b.False
ANS:
FPTS:
1
10.BaylorBankbelievestheNewZealanddollarwillappreciateoverthenextfivedaysfrom$.48to$.50.Thefollowingannualinterestratesapply:
Currency
LendingRate
BorrowingRate
Dollars
7.10%
7.50%
NewZealanddollar（NZ$）
6.80%
7.25%
BaylorBankhasthecapacitytoborroweitherNZ$10millionor$5million.IfBaylorBank'sforecastiscorrect,whatwillitsdollarprofitbefromspeculationoverthefive-dayperiod（assumingitdoesnotuseanyofitsexistingconsumerdepositstocapitalizeonitsexpectations）?
a.
$521,325.
b.
$500,520.
c.
$104,262.
d.
$413,419.
e.
$208,044.
ANS:
E
SOLUTION:
1.
Borrow$5million.
2.
ConverttoNZ$:
$5,000,000/$.48=NZ$10,416,667.
3.
InvesttheNZ$atanannualizedrateof6.80%overfivedays.
NZ$10,416,667⋅[1+6.80%（5/360）]
=NZ$10,426,505
4.
ConverttheNZ$backtodollars:
NZ$10,426,505⋅$.50=$5,213,252
5.
Repaythedollarsborrowed.Therepaymentamountis:
$5,000,000⋅[1+7.5%（5/360）]
=$5,000,000⋅[1.00104]
=$5,005,208
6.
Afterrepayingtheloan,theremainingdollarprofitis:
$5,213,252−$5,005,208=$208,044
PTS:
1
11.AssumethefollowinginformationregardingU.S.andEuropeanannualizedinterestrates:
Currency
LendingRate
BorrowingRate
U.S.Dollar（$）
6.73%
7.20%
Euro（€）
6.80%
7.28%
TrensorBankcanborroweither$20millionor€20million.Thecurrentspotrateoftheeurois$1.13.Furthermore,TrensorBankexpectsthespotrateoftheeurotobe$1.10in90days.WhatisTrensorBank'sdollarprofitfromspeculatingifthespotrateoftheeuroisindeed$1.10in90days?
a.
$579,845.
b.
$583,800.
c.
$588,200.
d.
$584,245.
e.
$980,245.
ANS:
A
SOLUTION:
1.
Borrow€20million.
2.
Convertthe€20millionto€20,000,000⋅$1.13=$22,600,000.
3.
Investthe$22,600,000atanannualizedrateof6.73%for90days.
$22,600,000⋅[1+6.73%（90/360）]
=$22,980,245
4.
Determineeurosowed:
€20,000,000⋅[1+7.28%（90/360）]=€20,364,000.
5.
Determinedollarsneededtorepayeuroloan:
€20,364,000⋅$1.10=$22,400,400.
6.
Thedollarprofitis$22,980,245−$22,400,400=$579,845.
PTS:
1
12.Theequilibriumexchangerateofpoundsis$1.70.Atanexchangerateof$1.72perpound:
a.
U.S.demandforpoundswouldexceedthesupplyofpoundsforsaleandtherewouldbeashortageofpoundsintheforeignexchangemarket.
b.
U.S.demandforpoundswouldbelessthanthesupplyofpoundsforsaleandtherewouldbeashortageofpoundsintheforeignexchangemarket.
c.
U.S.demandforpoundswouldexceedthesupplyofpoundsforsaleandtherewouldbeasurplusofpoundsintheforeignexchangemarket.
d.
U.S.demandforpoundswouldbelessthanthesupplyofpoundsforsaleandtherewouldbeasurplusofpoundsintheforeignexchangemarket.
e.
U.S.demandforpoundswouldbeequaltothesupplyofpoundsforsaleandtherewouldbeashortageofpoundsintheforeignexchangemarket.
ANS:
DPTS:
1
13.AssumethatSwissinvestorshavefrancsavailabletoinvestinsecurities,andtheyinitiallyviewU.S.andBritishinterestratesasequallyattractive.NowassumethatU.S.interestratesincreasewhileBritishinterestratesstaythesame.Thiswouldlikelycause:
a.
theSwissdemandfordollarstodecreaseandthedollarwilldepreciateagainstthepound.
b.
theSwissdemandfordollarstoincreaseandthedollarwilldepreciateagainsttheSwissfranc.
c.
theSwissdemandfordollarstoincreaseandthedollarwillappreciateagainsttheSwissfranc.
d.
theSwissdemandfordollarstodecreaseandthedollarwillappreciateagainstthepound.
ANS:
CPTS:
1
14.Therealinterestrateadjuststhenominalinterestratefor:
a.
exchangeratemovements.
b.
incomegrowth.
c.
inflation.
d.
governmentcontrols.
e.
noneoftheabove
ANS:
CPTS:
1
15.IfU.S.inflationsuddenlyincreasedwhileEuropeaninflationstayedthesame,therewouldbe:
a.
anincreasedU.S.demandforeurosandanincreasedsupplyofeurosforsale.
b.
adecreasedU.S.demandforeurosandanincreasedsupplyofeurosforsale.
c.
adecreasedU.S.demandforeurosandadecreasedsupplyofeurosforsale.
d.
anincreasedU.S.demandforeurosandadecreasedsupplyofeurosforsale.
ANS:
DPTS:
1
16.IfinflationinNewZealandsuddenlyincreasedwhileU.S.inflationstayedthesame,therewouldbe:
a.
aninwardshiftinthedemandscheduleforNZ$andanoutwardshiftinthesupplyscheduleforNZ$.
b.
anoutwardshiftinthedemandscheduleforNZ$andaninwardshiftinthesupplyscheduleforNZ$.
c.
anoutwardshiftinthedemandscheduleforNZ$andanoutwardshiftinthesupplyscheduleforNZ$.
d.
aninwardshiftinthedemandscheduleforNZ$andaninwardshiftinthesupplyscheduleforNZ$.
ANS:
APTS:
1
17.IftheU.S.andJapanengageinsubstantialfinancialflowsbutlittletrade,____directlyinfluencestheirexchangeratethemost.IftheU.S.andSwitzerlandengageinmuchtradebutlittlefinancialflows,____directlyinfluencestheirexchangeratethemost.
a.
interestratedifferentials;interestratedifferentials
b.
inflationandinterestratedifferentials;interestratedifferentials
c.
incomeandinterestratedifferentials;inflationdifferentials
d.
interestratedifferentials;inflationandincomedifferentials
e.
inflationandincomedifferentials;interestratedifferentials
ANS:
DPTS:
1
18.IfinflationincreasessubstantiallyinAustraliawhileU.S.inflationremainsunchanged,thisisexpectedtoplace____pressureonthevalueoftheAustraliandollarwithrespecttotheU.S.dollar.
a.
upward
b.
downward
c.
eitherupwardordownward（dependingonthedegreeoftheincreaseinAustralianinflation）
d.
noneoftheabove;therewillbenoimpact
ANS:
BPTS:
1
19.AssumethatBritishcorporationsbegintopurchasemoresuppliesfromtheU.S.asaresultofseverallaborstrikesbyBritishsuppliers.Thisactionreflects:
a.
anincreaseddemandforBritishpounds.
b.
adecreaseinthedemandforBritishpounds.
c.
anincreaseinthesupplyofBritishpoundsforsale.
d.
adecreaseinthesupplyofBritishpoundsforsale.
ANS:
CPTS:
1
20.Theexchangeratesofsmallercountriesareverystablebecausethemarketfortheircurrencyisveryliquid.
a.True
b.False
ANS:
FPTS:
1
21.Thephrase"thedollarwasmixedintrading"meansthat:
a.
t
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