FIN 565 final exam 100% answers
Question 1.1. (TCO A) A high home inflation rate relative to other countries would the
home country's current account balance, other things being equal. A high growth in the
home income level relative to other countries would the home country's current account
balance, other things being equal. (Points : 5)
increase; increase
increase; decrease
decrease; decrease
decrease; increase
Question 2.2. (TCO A) Assume the Canadian dollar is equal to $0.98 and the Brazilian real
is equal to $0.28. The value of the Brazilian real in Canadian dollars is (Points : 5)
about 0.3500 Canadian
dollars. about 0.2857
Canadian dollars. about
3.5714 Canadian dollars.
about 1.0204 Canadian
dollars.
Question 3.3. (TCO B) Assume that IRP holds and the euro's interest rate is 9%, whereas the
U.S. interest rate is 12%. Then, the euro's interest rate increases to 11%, whereas the U.S.
interest rate remains the same. As a result of the increase in the interest rate on euros, the
euro's forward will in order to maintain IRP. (Points : 5)
discount; increase
discount; decrease
premium; increase
premium; decrease
Question 4.4. (TCO C) A strong dollar is normally expected to cause (Points :
5) high unemployment and high inflation in the United States.
high unemployment and low inflation in the United
States. low unemployment and low inflation in the United
States. low unemployment and high inflation in the
United States.
Question 5.5. (TCO D) Assume no transactions costs exist for any futures or forward
contracts. The price of British pound futures with a settlement date 180 days from now will
(Points : 5)
definitely be above the 180-day forward rate.
be about the same as the 180-day forward
This study source was downloaded by 100000832558064 from CourseHero.com on 01-19-2022 13:38:55 GMT -06:00
https://www.coursehero.com/file/17551111/FIN-565-final-exam-100-answers/
, FIN 565 final exam 100% answers
rate. definitely be below the 180-day forward
rate.
None of the above
This study source was downloaded by 100000832558064 from CourseHero.com on 01-19-2022 13:38:55 GMT -06:00
https://www.coursehero.com/file/17551111/FIN-565-final-exam-100-answers/
Question 1.1. (TCO A) A high home inflation rate relative to other countries would the
home country's current account balance, other things being equal. A high growth in the
home income level relative to other countries would the home country's current account
balance, other things being equal. (Points : 5)
increase; increase
increase; decrease
decrease; decrease
decrease; increase
Question 2.2. (TCO A) Assume the Canadian dollar is equal to $0.98 and the Brazilian real
is equal to $0.28. The value of the Brazilian real in Canadian dollars is (Points : 5)
about 0.3500 Canadian
dollars. about 0.2857
Canadian dollars. about
3.5714 Canadian dollars.
about 1.0204 Canadian
dollars.
Question 3.3. (TCO B) Assume that IRP holds and the euro's interest rate is 9%, whereas the
U.S. interest rate is 12%. Then, the euro's interest rate increases to 11%, whereas the U.S.
interest rate remains the same. As a result of the increase in the interest rate on euros, the
euro's forward will in order to maintain IRP. (Points : 5)
discount; increase
discount; decrease
premium; increase
premium; decrease
Question 4.4. (TCO C) A strong dollar is normally expected to cause (Points :
5) high unemployment and high inflation in the United States.
high unemployment and low inflation in the United
States. low unemployment and low inflation in the United
States. low unemployment and high inflation in the
United States.
Question 5.5. (TCO D) Assume no transactions costs exist for any futures or forward
contracts. The price of British pound futures with a settlement date 180 days from now will
(Points : 5)
definitely be above the 180-day forward rate.
be about the same as the 180-day forward
This study source was downloaded by 100000832558064 from CourseHero.com on 01-19-2022 13:38:55 GMT -06:00
https://www.coursehero.com/file/17551111/FIN-565-final-exam-100-answers/
, FIN 565 final exam 100% answers
rate. definitely be below the 180-day forward
rate.
None of the above
This study source was downloaded by 100000832558064 from CourseHero.com on 01-19-2022 13:38:55 GMT -06:00
https://www.coursehero.com/file/17551111/FIN-565-final-exam-100-answers/
