FINS1612_FinalExam_PracticeQs

forty-five to fifty-three, sixty-two to sixty six. Calculate the forward exchange rate.
A
AUD = USD0.7783 - 87
B
AUD = USD0.7907 - 19
C
AUD = USD0.7911 - 15
D
AUD = USD0.8465 - 13
10. Mega Bank Limited has been asked to provide a three month forward AUD/USD ‘buy’ quote
to a corporate client. The following information is available to the FX dealer:
USD75 000 within the next six weeks. The company enters into a forward exchange contract
with an FX dealer for ‘one month forward delivery’ of USD. On what date will value
B
Quote II is the convention adopted in Australia and is a direct quote
C
Quote I is the convention adopted in Australia and is an indirect quote
D
Quote II is the convention adopted in Australia and is an indirect quote
before the due date and therefore decides to enter into a forward exchange contract to
protect its position. The company receives the following quote: ‘the Aussie is seventy-eight
7.
An Australian company is to export electronic equipment to Europe, in particular Germany
and France and needs to consider the exchange rate implications of conducting business in
B
The principal trading floor of the FX market is located in Sydney, with
subsidiary branch offices in other main capital cities
C
The Reserve Bank may conduct FX transactions in order to change the
the unit of the quotation. Which exchange rate quotation will the treasurer include in the
report?
A
AUD = USD0.7655 - 60
B
USD = AUD1.3055 - 63
C
AUD = USD0.7660 - 55
sell USD = DEM1.20
The dealer recognises an arbitrage opportunity and immediately conducts a series of
transactions, based on the above quotations. This arbitrage strategy may be described as:
market?
A
A corporation that borrows funds from overseas capital markets for use in its own
domestic operations will generally need to sell foreign currency
position
D
All of the above
3.
A FX dealer at Mega Bank Limited notes the following rates are being quoted in
the market:
sell USD = AUD1.25
buy USD = DEM1.25
through a FX dealer and receives the following quote: ‘Aussie mark spot is one-twenty-two
fifty-five to sixty five’. What is the value of the export receipt?
D
USD = AUD1.3063 - 55
9.
An importer, Ossie Limited, will be required to purchase USD in approximately six months to
pay for a consignment of goods. The company is concerned that the AUD may depreciate
C
0.7642
D
0.7644
2
CHAPTER 16 MULTIPLE CHOICE QUESTIONS
1.
In a floating exchange rate regime, the exchange rate is the equilibrium price of the currency.
Changes in demand for a currency will cause changes in the equilibrium exchange rate.
convert the USD into AUD, the company decides to ‘speculate’ on a favourable movement in
the exchange rate. In ‘today + n days’ the exchange rate is AUD = USD0.79. Which of the
Which of the statements in relation to the AUD demand curve in the FX market is not
correct?
A
The purchase of AUD goods, services or assets generates a demand for AUD
An Australian company has received USDs in payment for goods exported. At the time of
receiving the USDs the exchange rate is quoted as AUD = USD0.78. Rather than immediately
deutschemark and French francs. Spot rates quoted are:
USD = DEM1.5650 - 60
USD = FFR5.2907 - 15
Calculate the DEM/FFR cross-rate.
A
DEM = FFR5.2907 - 5.2915
Spot rate
AUD = USD0.7654 - 59
US interest rates
= 7.73% p.a.
Australian interest rates = 8.64% p.a.
Calculate the three month forward ‘buy’ rate.
A
0.7637
B
0.7639
FINS 1612 Capital Markets and Institutions Final Exam Practice Questions
CHAPTER 15 MULTIPLE CHOICE QUESTIONS
1.
Which of the following statements is not correct in relation to the operation of the FX
from an FX dealer; AUD = USD0.7655 - 60. In order to prepare a financial report on the
viability of a project for the board of directors, the treasurer is required to ensure the USD is
B
DEM = FFR3.3790 - 3.3806
C
DEM = FFR3.3785 - 3.3812
D
DEM = FFR0.2958 - 0.2960
8.
The treasurer of Multinational Limited has received the following foreign exchange quote
following statements is correct?
A
The company has taken a ‘long’ position in the USD
B
The exporter company has made a loss on its FX position
C
The opportunity cost of interest foregone will affect the profitability of the FX
I
AUD = USD0.7845 - 50
II
USD = AUD1.2747 - 39
Which of the following statements is correct?
A
Quote I is the convention adopted in Australia and is a direct quote
composition of its ‘official reserve assets’
D
‘Dealers’ in the Australian FX market are required to hold a FX dealers, authority
from the Reserve Bank
Baidu Nhomakorabea
2.
A
Triangular arbitrage
B
Covered interest arbitrage
C
Locational arbitrage
D
Speculative arbitrage
4.
It is Tuesday, 27 March 199X, and an Australian importing company has to pay a US exporter
B
A depreciation of the AUD equates to a fall in the price of Australian goods, services
A
$407 664.09
B
$407 996.74
C
$612 750.00
D
$613 250.00
1
6.
A student researching the AUD/USD exchange rate on a particular day is confused to find the
following two quotations:
settlement occur?
A
29 March 199X
B
27 April 199X
C
29 April 199X
D
30 April 199X
5.
An Australian export company wishes to sell its deutschemark receipts, DEM500 000,