国际金融Chapter模板
国际金融英文版(托马斯A普格尔著)---Chapter7
International lending to developing countries: the surge in international lending, 1974-1982
The oil shocks of the 1970s led to a surge in private international lending to developing countries. Four forces combined to create the surge.
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International lending to developing countries: the surge in international lending, 1974-1982
– Third, in developing countries, the 1970s was an era of peak resistance to foreign direct investment, in order to gain access to the higher returns offered in developing countries, banks had to lend outright to governments and companies in these countries.
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Taxes on international lending
If a country looms large enough to have power over the world market rate of return, it can exploit this market power to its own advantage, at the expense of other countries and the world as a whole. (nationally optimal tax) see figure 7.1 for an illustration
国际金融英文chapter 2
Chapter 2
Payments among Nations 国际收支
Balance of payments 国际收支平衡表
The set of accounts recording all flows of value between a nation’s residents and the residents of the rest of the world during a period of time. 一个国家的居民与非居民一定时期内的全部国 际经济交易。
Balanபைடு நூலகம்e of payments
The main kinds of flows in the balance of payments accounts
Merchandise trade flows Service flows Income flows Unilateral transfers (gifts) Private capital flows Official reserve asset flows
The Current Account (CA) Balance
3.Domestic production (Y) versus national expenditure (E). Y = C + Id + G +(X – M), E = C + Id + G, and CA = (X – M) approximately, so that CA = Y – E
国际金融(英文版)Chapter 1 Balance of Payment
Counterpart items
They arise because of the double entry system in balance of payments accounting and refer to adjustments in reserves owing to monetization or demonetization of gold, allocation or cancellation of SDRs and revaluation of the various components of total reserves.
Process of adjustment
This adjustment is in response to the various economic forces that impact a country’s balance of payments.
The basic balance
This is the current account balance plus the net balance of long-term capital flows.
The official settlement balance
The official settlements balance focuses on the operations that the monetary authorities have to undertake to finance any imbalance in the current and capital accounts.
国际金融chap2(14thedition)
影响国际收支平衡的因素
汇率
汇率的变化会影响一个国家的出口和 进口，进而影响国际收支平衡。
贸易政策
贸易政策的变化，如关税和贸易壁垒 的设置或取消，会对国际收支产生影 响。
投资和融资
一个国家的投资和融资活动也会影响 国际收支平衡，例如跨国公司的资金 流入流出、证券投资等。
经济周期
经济周期的变化会影响一个国家的出 口和进口需求，从而影响国际收支平 衡。
浮动汇率制
各国货币汇率自由浮动，国际收支调节主要依靠市场机 制。
区域货币体系和货币联盟
如欧元区、东南亚国家联盟等，区域内国家使用共同货 币。
国际货币基金组织的作用和职能
作用：维护国际金融稳定，促进全球经济合作 与发展。
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职能
提供短期融资，帮助成员国解决国际收支 问题。
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监督成员国经济政策，确保政策符合组织 原则。
作为外汇市场的中介机构，为 客户提供外汇交易服务。
投资银行
提供外汇交易服务，同时也作 为市场的做市商，提供流动性。
中央银行
作为货币政策的制定者，通过 买卖外汇影响汇率，以实现汇 率稳定和国际收支平衡。
跨国公司
为满足国际贸易和投资的需要， 进行外汇交易。
个人和机构投资者
通过个人账户参与外汇交易， 满足旅行、留学等需求。
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外汇市场
外汇市场的定义和功能
定义
实现货币兑换
外汇市场是不同国家货币兑换交易的场所 ，也称为"FOREX"或"FX"市场。
为国际贸易和投资提供必要的货币兑换服 务。
价格发现
流动性提供
通过市场交易，形成各种货币的汇率，反 映货币的真实价值。
International finance chapter 8 (国际金融英文版课件)
The marginal propensity to consume domestic
product (1-s-m)
The spending multiplier in a small, open economy
THE PERFORMANCE OF A NATIONAL ECONOMY
We
judge a country’s macroeconomic performance against a number of broad objectives or goals. We can usefully divide these broad goals into two categories: internal balance and external balance.
Chapter 8 HOW DOES THE OPEN MACROECONOMY WORK?
HOW DOES THE OPEN MACROECONOMY WORK?
This
chapter develops a general framework for analyzing the performance of a national economy that is open to international transactions.
The value of this multiplier is the same whether the
initial extra spending is made by the government or a surge in consumption, a rise in private investment spending, or a rise in exports.
国际金融第3章(大卫艾特曼)
Chapter 3The International Monetary SystemQuestions3-1. The Gold Standard and the Money Supply. Under the gold standard all national governments promised to follow the “rules of the game.” This meant defending a fixed exchange rate. What did this promise imply about a country’s money supply?A country’s money supply was limited to the amount of gold held by its central bank or treasury.For example, if a country had 1,000,000 ounces of gold and its fixed rate of exchange was100 local currency units per ounce of gold, that country could have 100,000,000 local currencyunits outstanding. Any change in its holdings of gold needed to be matched by a change in thenumber of local currency units outstanding.3-2. Causes of Devaluation. If a country follows a fixed exchange rate regime, what macroeconomic variables could cause the fixed exchange rate to be devalued?The following macroeconomic variables could cause the fixed exchange rate to be devalued:•An interest rate that is too low compared to other competing currencies• A continuing balance of payments deficit•An inflation rate consistently higher than in other countries.3-3. Fixed versus Flexible Exchange Rates. What are the advantages and disadvantages of fixed exchange rates?•Fixed rates provide stability in international prices for the conduct of trade. Stable prices aid in the growth of international trade and lessen risks for all businesses.•Fixed exchange rates are inherently anti-inflationary, requiring the country to follow restrictive monetary and fiscal policies. This restrictiveness, however, can often be a burden to a countrywishing to pursue policies that alleviate continuing internal economic problems, such as highunemployment or slow economic growth.•Fixed exchange rate regimes necessitate that central banks maintain large quantities of international reserves (hard currencies and gold) for use in the occasional defense of the fixedrate. As international currency markets have grown rapidly in size and volume, increasingreserve holdings has become a significant burden to many nations.•Fixed rates, once in place, may be maintained at rates that are inconsistent with economic fundamentals. As the structure of a nation’s economy changes, and as its trade relationshipsand balances evolve, the exchange rate itself should change. Flexible exchange rates allow thisto happen gradually and efficiently, but fixed rates must be changed administratively—usuallytoo late, too highly publicized, and at too large a one-time cost to the nation’s economic health.Chapter 3 The International Monetary System 13 3-4. The Impossible Trinity. Explain what is meant by the term impossible trinity and why it is true.•Countries with floating rate regimes can maintain monetary independence and financial integration but must sacrifice exchange rate stability.•Countries with tight control over capital inflows and outflows can retain their monetary independence and stable exchange rate, but surrender being integrated with the world’scapital markets.•Countries that maintain exchange rate stability by having fixed rates give up the ability to have an independent monetary policy.3-5. Currency Board or Dollarization. Fixed exchange rate regimes are sometimes implemented through a currency board (Hong Kong) or dollarization (Ecuador). What is the difference between the two approaches?In a currency board arrangement, the country issues its own currency but that currency is backed 100% by foreign exchange holdings of a hard foreign currency—usually the U.S. dollar.In dollarization, the country abolishes its own currency and uses a foreign currency, such asthe U.S. dollar, for all domestic transactions.3-6. Emerging Market Exchange Rate Regimes. High capital mobility is forcing emerging market nations to choose between free-floating regimes and currency board or dollarization regimes. What are the main outcomes of each of these regimes from the perspective of emerging market nations?There is no doubt that for many emerging markets a currency board, dollarization, and freely-floating exchange rate regimes are all extremes. In fact, many experts feel that the global financial marketplace will drive more and more emerging market nations towards one of these extremes. As illustrated by Exhibit 3.6 (in the chapter and reproduced here), there is a distinct lack of “middle ground” left between rigidly fixed and freely floating. In anecdotal support of this argument,a poll of the general population in Mexico in 1999 indicated that 9 out of 10 people would preferdollarization over a floating-rate peso. Clearly, there are many in the emerging markets of theworld who have little faith in their leadership and institutions to implement an effective exchange rate policy.14 Eiteman/Stonehill/Moffett •Multinational Business Finance, Twelfth Edition3-7. Argentine Currency Board. How did the Argentine currency board function from 1991 to January 2002 and why did it collapse?Argentina’s currency board exchange regime of fixing the value of its peso on a one-to-one basis with the U.S. dollar ended for several reasons.•As the U.S. dollar strengthened against other major world currencies, including the euro, during the 1990s, Argentine export prices rose vis-à-vis the currencies of its major trading partners.•This problem was aggravated by the devaluation of the Brazilian real in the late 1990s.•These two problems, in turn, led to continued trade deficits and a loss of foreign exchange reserves by the Argentine central bank. (4) This problem, in turn, led Argentine residents toflee from the peso and into the dollar, further worsening Argentina’s ability to maintain itsone-to-one peg.Euro.On January 4, 1999, eleven member states of the European Union initiated the3-8. TheEuropean Monetary Union (EMU) and established a single currency, the euro, which replacedthe individual currencies of participating member states. Describe three of the main ways thatthe euro affects the members of the EMU.The euro affects markets in three ways: (1) countries within the euro zone enjoy cheaper transaction costs; (2) currency risks and costs related to exchange rate uncertainty are reduced; and (3) allconsumers and businesses both inside and outside the euro zone enjoy price transparency andincreased price-based competition.The United Kingdom, Denmark, and Sweden have chosen not to adopt the euro but 3-9. Maveri c ks.rather maintain their individual currencies. What are the motivations of each of these three countries that are also members of the European Union?The United Kingdom chose not to adopt the euro because of the extensive use of the U.K. pound in international trade and financial transactions. London is still the world’s most importantfinancial center. The British are also very proud of their long tradition in financial matters when “Britannia ruled the waves.” They are afraid that monetary and financial matters may eventually migrate to Frankfurt where the European Central Bank is located. The British are also worriedabout continued concentration of decision making in Brussels where the main European Unioninstitutions are located.Denmark is also worried about losing its economic independence as a small country surrounded by big neighbors. Denmark’s currency, the krone, is mostly tied to the euro anyway, so it does not suffer a misalignment with the primary currency unit of the surrounding economies. Sweden has strong economic ties to Denmark, Norway, and the United Kingdom, none of which adopted the euro so far. Sweden, like the others, is afraid of over-concentration of power within EuropeanUnion institutions.Despite popular fears and a certain amount of nationalism, all three countries have strong forces within that would like these countries to adopt the euro. This would usually require popularreferendums, so you may see them adopt the euro in the future.Chapter 3 The International Monetary System 15 3-10. International Monetary Fund (IMF). The IMF was established by the Bretton Woods Agreement (1944). What were its original objectives?The IMF was established to render temporary assistance to member countries trying to defend the value of their currencies against cyclical, seasonal, or random occurrences. Additionally it was to assist countries having structural trade problems. More recently it has attempted to help countries, such as Russia, Brazil, Argentina, and Indonesia, to resolve financial crises.3-11. Special Drawing Rights. What are Special Drawing Rights?The Special Drawing Right (SDR) is an international reserve asset created by the IMF to supplement existing foreign exchange reserves. It serves as a unit of account for the IMF and other international and regional organizations and is also the base against which some countries peg the exchangerate for their currencies.Defined initially in terms of a fixed quantity of gold, the SDR has been redefined several times.It is currently the weighted value of currencies of the five IMF members having the largest exports of goods and services. Individual countries hold SDRs in the form of deposits in the IMF. These holdings are part of each country’s international monetary reserves, along with official holdings of gold, foreign exchange, and its reserve position at the IMF. Members may settle transactionsamong themselves by transferring SDRs.3-12. Exchange Rate Regime Classifications. The IMF classifies all exchange rate regimes into eight specific categories that are summarized in this chapter. Under which exchange rate regime would you classify each of the following countries?a. France: Exchange arrangements with no separate legal tender.b. The United States: independent floating.c. Japan: independent floating.d. Thailand: managed floating with no pre-announced path for the exchange rate. Prior to theAsian Crisis of 1997 it was tied to the U.S. dollar.3-13. The Ideal Currency. What are the attributes of the ideal currency?If the ideal currency existed in today’s world, it would possess three attributes (illustrated inExhibit 3.4), often referred to as The Impossible Trinity.a.Exchange rate stability. The value of the currency would be fixed in relationship to othermajor currencies so traders and investors could be relatively certain of the foreign exchangevalue of each currency in the present and into the near future.b. Full financial integration. Complete freedom of monetary flows would be allowed, so tradersand investors could willingly and easily move funds from one country and currency to anotherin response to perceived economic opportunities or risks.c. Monetary independen c e. Domestic monetary and interest rate policies would be set by eachindividual country to pursue desired national economic policies, especially as they mightrelate to limiting inflation, combating recessions, and fostering prosperity and full employment.The reason that it is termed The Impossible Trinity is that a country must give up one of the three goals described by the sides of the triangle, monetary independence, exchange rate stability, orfull financial integration. The forces of economics do not allow the simultaneous achievement of all three.16 Eiteman/Stonehill/Moffett •Multinational Business Finance, Twelfth Edition3-14. Bretton Woods Failure. Why did the fixed exchange rate regime of 1945–1973 eventually fail?The fixed exchange rate regime of 1945–1973 failed because of widely diverging nationalmonetary and fiscal policies, differential rates of inflation, and various unexpected externalshocks. The U.S. dollar was the main reserve currency held by central banks and was the key to the web of exchange rate values. The United States ran persistent and growing deficits in itsbalance of payments, which required a heavy outflow of dollars to finance the deficits. Eventually the heavy overhang of dollars held by foreigners forced the United States to devalue the dollarbecause the United States was no longer able to guarantee conversion of dollars into its diminishing store of gold.3-15. EU and Euro Expansion. With so many new countries joining the European Union in 2004, when will they officially move to the euro—if ever?In January 2007 two more countries were added to the EU’s growing membership—Bulgaria and Romania. Their entry was little more than two years after the EU had added 10 more countriesto its ranks. As illustrated by Global Finance in Practice 3.2, to date only one of these new12 members has actually adopted the euro. Although all members are expected to eventuallyreplace their currencies with the euro, recent years have seen growing debates and continualpostponements by the new members in moving toward full euro adoption.。
chapter02国际金融74页PPT
2
教学要点
了解外汇市场的起源、功能和特点 掌握外汇市场结构 熟悉外汇市场交易产品
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2.1 外汇市场概述
1.外汇市场起源 外汇市场是专门从事外汇交易的场所 通常认为国际贸易是导致外汇市场建立的最主
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2.外汇市场功能
反映和调节外汇供求 形成外汇价格体系 实现购买力的国际转移 提供外汇资金融通渠道 防范汇率风险
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3.现代外汇市场特点
由区域性发展到全球性，实现24小时连续交易
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现代外汇市场特点
交易规模加速增长，但市场集中程度趋强
瑞士 香港 法国澳大利亚
德国
英国
新加坡
日本 美国
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chapter02国际金融
41、俯仰终宇宙，不乐复何如。 42、夏日长抱饥，寒夜无被眠。 43、不戚戚于贫贱，不汲汲于富贵。 44、欲言无予和，挥杯劝孤影。 45、盛年不重来，一日难再晨。及时 当勉励 ，岁月 不待人 。
第2章 外汇市场与外汇市 场业务
Foreign Exchange Market
表1 全球外汇市场交易额*（按工具、主体划分） （4月份日均交易额 单位：十亿美元）
外汇交易工具
1998 1,527
即期交易**
568
外汇远期**
128
外汇掉期**
734
货币互换
10
期权及其他工具
87
外汇交易主体
1,527
申报交易商
961
其他金融机构
299
非金融客户
国际金融-chapter nine
金币本位制
金块本位制 金汇兑本位制
布雷顿森林体系时期
牙买加货币体系
1 .Gold Standard system, 1870-1914
• Origins of the Gold Standard
– The Resumption Act (1819) marks the first adoption of a true gold standard. – 《恢复条令》 (1819) 标志着金本位制的正式采 用。 – The U.S. Gold Standard Act of 1900 institutionalized the dollar-gold link. – 1900年的《美国的金本位制法案》建立了美元 和黄金的联系
Key terms
• The international monetary system 国际货币 体系 • the Gold Standard 金本位制 • Gold Parity 铸币平价 • Bretton woods system 布雷顿森林体系 • IMF 国际货币基金组织 • Triffin problem—特里芬难题 • Optimum Currency Areas—最优货币区
The international monetary system
• International Macroeconomic Policy Under the Gold Standard, 1870-1914 • The Interwar Years, 1918-1939 • The Bretton Woods System and the International Monetary Fund
characters：
• （A）official international reserves take the form of gold. • （B）unhindered imports and exports of gold across its borders. • (C) trade currency for gold free
国际金融Chapter Two
• A debit (-) is a flow for which the country must pay. Such as : • The country’s imports of goods; • Purchases by firms in this country of consulting services from providers located in foreign countries; • Purchases by investors in this country of the equity shares of a foreign company from the foreigner that previously owned the shares. • In each of these cases is obligated to make a payment to a foreigner.
The U.S. government simply gives $8 million in foreign aid to the government of Egypt in the form of wheat from U.S. government stockpiles.
• Credit(+) Debit(-) • Merchandise export $8 • Unilateral transfer to Egypt $8
• The $ 8 million credit is straightforward since this is just another merchandise export, for which the United States must be paid. • The accountants get around the fact that the United States was not paid by Egypt by inventing a debit item for the unilateral transfer (gift) to Egypt. They invent the fiction that the United States received $ 8 million in goodwill- or gratitude- from Egypt for its gift of wheat.
《国际金融》第一和二章
仍按照上例。假设MIKE是个谨慎的投资者，他担心将来汇率发生变化。就把预计将来收回的706.9015万英镑，在远期市场上卖出。
假设投资之初，三个月的远期汇率：英镑/美元=1.445 在三个月到期时，mike 把收回的706.9015万英镑用来履行远期合同后，收回；
706.9015万英镑×1.445= 1021.473万美元，
1.7.2 利率平价说
01
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03
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1.7.2 利率平价说
对利率平价说的简要评价
国际收支说的早期形式：国际借贷说 该理论的主要观点是：一国汇率的变化，是由外汇的供给和需求决定的，而外汇的供求是由国际收支引起的。而只有进入实际支付阶段的国际收支，才会影响外汇的供求。
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汇率与国际收支：国际收支说
1.2 外汇的种类
CONTENTS
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单击添加文本具体内容
03
单击添加文本具体内容
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单击添加文本具体内容
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单击添加文本具体内容
汇率 3.3.1 汇率及其标价方法 3.3.2 汇率的种类
1.3.1 汇率及其标价方法
汇率的概念 又称汇价，是一国货币折算成另一国货币的比率。
汇率的标价方法
01
直接标价法，
相对购买力平价 不同国家货币购买力之间的相对变化，是汇率变动的决定因素。汇率的变化与同一时期内两国物价水平的相对变动成比例。在纸币流通条件下，相对购买力平价更具实际意义。 3.8 汇率决定理论 1.7.1 汇率与价格水平：购买力平价说
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03
01
02
利率平价说的基本内容
核心内容：在没有交易成本的情况下，远期汇率的变动水平（亦远期汇率同即期汇率相比变动的百分比）必定等于利差（在同样的时间区间上所衡量的）。
国际金融英文版--- Chapter Four
EXCHANGE RATE RISK
Economic exposure: the risk that a company’s profits will be
5 percent When the
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What is exchange risk?
Currency risk is a form of risk that arises from the change in price of one currency against another. Whenever investors or companies have assets or business operations across national borders, they face currency risk if their positions are not hedged.
Chapter_1__The_Balance_of_Payment
Ⅱ
Slide 1-5
National accounts
国民经济 账户
Result
reflected in a prominent role
Slide 1-6
Balance of payments
国际收支 平衡表
Exchange rate
1.1 Double-Entry Accounting
U.S. credit transaction (+)
Merchandise exports 商品出口 Transportation and travel receipts 运输及旅游收入 Income received from investments abroad 海外投 资所获得的收入 Gifts received from foreign residents外国居民捐赠 Aid received from foreign governments 外国政府 援助 Investments in the United States by overseas residents外国居民在美国的投资
Payment to foreigners
Debit transaction (-) 借方交易
国际收支平衡表中所用记账方法是国际上通行的 借贷复式记账法 ，每一笔国际经济交易都要以同 一数额出现两次，一次在借方，一次在贷方
Slide 1-21
Business School
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IMF(International Monetary Fund) WTO(World Trade Organization ) BIS(Bank for International Settlements) OECD(Organization for Economic Co-operation and Development ) EU(European Union)
国际金融课件Chapter.ppt
Example 1:
• Suppose your company would like to buy some goods from United Kingdom, and the price is ￡1 million, and pay in six month later. The exchange at present is 1.6 $/￡, which means that you pay for 1.6million dollars. • However, six month later, the dollar depreciate against the British pound by 5 percent, to 1.68$/￡. So you have to pay for 1.68 million dollars. • Because of the change in the exchange rate, the dollar price of the goods would rise 5 percent, you have to pay 80000 dollar more.
1.1 Types of Foreign Exchange Risk Exposure 外汇风险暴露的类型 • Transaction exposure: the risk that the
domestic cost or proceeds of a transaction may change. •交易风险：以外币计价的交易成本或交易收益可能发 Translation exposure: (also known as 生变动的风险。 accounting exposure) the risk that the translation of value of foreign-currencydenominated assets is affected by exchange rate changes. • Economic exposure: (also known as operating) 换算风险：就是将多种外币计价的资产和负债换算 the risk that exchange rate changes may 为某种单一货币计价时发生的风险。 affect the present value of future income streams.
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Answer: A
8. International money market transactions normally represent the equivalent of: A) $1 million or more. B) $1,000 to $10,000. C) $10,000 and $100,000. D) $100,000 and $200,000.
Answer: C
10. As a result of the Smithsonian Agreement, the U.S. dollar was: A) the currency to be used by all countries as a medium of exchange for international trade. B) forced to be freely floating relative to all currencies without any boundaries. C) devalued relative to major currencies. D) revalued (upward) relative to major currencies.
Answer: B
3 × 30 × $1.63 = $146.70
16. The ADR of a British firm is convertible into 3 shares of stock. The share price of the firm was 30 pounds when the British market closed. When the U.S. market opens, the pound is worth $1.63. The price of this ADR should be: A) $48.90. B) $146.70. C) $55.21. D) none of these.
Chapter 3
Answer: B
4.26%
Bid-ask percentage spread = ($.47 – $.45)/$.47 =
1.Assume that a bank’s bid rate on Swiss francs is $.45 and its ask rate is $.47. Its bid-ask percentage spread is: A) about 4.44%. B) about 4.26%. C) about 4.03%. D) about 4.17%.
Answer: E
6. _______ is not a bank characteristic important to customers in need of foreign exchange. A) Quote competitiveness B) Speed of execution C) Forecasting advice D) Advice about current market conditions E) All of these are important bank characteristics to customers in need of foreign exchange.
Answer: D ($.008/$.59) = F$.014/¥
14. A Japanese yen is worth $.0080, and a Fijian dollar (F$) is worth $.5900. What is the value of the yen in Fijian dollars (i.e., how many Fijian dollars do you need to buy a yen)? A) 73.75. B) 125. C) 1.69. D) 0.014. E) none of these.
Answer: B
12. Assume a Japanese firm invoices exports to the U.S. in U.S. dollars. Assume that the forward rate and spot rate of the Japanese yen are equal. If the Japanese firm expects the U.S. dollar to _______ against the yen, it would likely wish to hedge. It could hedge by _______ dollars forward. A) depreciate; buying B) depreciate; selling C) appreciate; selling D) appreciate; buying
Answer: D
7. A syndicated Eurocredit loan: A) represents a loan by a single bank to a syndicate of corporations. B) represents a loan by a single bank to a syndicate of country governments. C) represents a direct loan by a syndicate of oil producing exporters to a less developed country. D) represents a loan by a group of banks to a borrower.
Answer: C
5. A forward contract can be used to lock in the _______ of a specified currency for a future point in time. A) purchase price B) sale price C) purchase price or sale price D) none of these
Answer: A
3. If a U.S. firm desires to avoid the risk from exchange rate fluctuations, and it will need C$200,000 in 90 days to make payment on imports from Canada, it could: A) obtain a 90 day forward purchase contract on Canadian dollars. B) obtain a 90 day forward sale contract on Canadian dollars. C) purchase Canadian dollars 90 days from now at the spot rate. D) sell Canadian dollars 90 days from now at the spot rate.
Answer: D
2. _______ is not a factor that affects the bid/ask spread. A) Order costs B) Inventory costs C) Volume D) All of these factors affect the bid/ask spread.
Answer: D
4. Which of the following is not true with respect to spot market liquidity? A) The more willing buyers and sellers there are, the more liquid a market is. B) The spot markets for heavily traded currencies such as the Japanese yen are very liquid. C) A currency’s liquidity affects the ease with which an MNC can obtain or sell that currency. D) If a currency is illiquid, an MNC is typically able to quickly purchase that currency at a reasonable exchange rate.
Answer: C
15 × $1.10 he ADR of a Dutch firm represents one share of that firm’s stock that is traded on a Dutch stock exchange. The share price of the firm was 15 euros when the Dutch market closed. As the U.S. market opens, the euro is worth $1.10. Thus, the price of the ADR should be: A) $13.64. B) $15.00. C) $16.50. D) 16.50 euros. E) none of these.
Answer: B
13. Loans of one year or longer extended by banks in Europe are called: A) Eurocurrency loans. B) Eurocredit loans. C) Eurobond loans. D) parallel loans.
Answer: D
11. According to the text, the average foreign exchange trading around the world _______ per day. A) equals about $200 billion B) equals about $400 billion C) equals about $700 billion D) exceeds $1 trillion