国际金融双语期末A卷

Part I: Multiple choice(1*30=30score)

( only one choice for each question)

1.Which of the following transactions is recorded in the financial account?

A)Ford motor company builds a new plant in China

B)A Chinese businessman imports Ford automobiles from the United States.

C)A U.S. tourist spends money on a trip to China.

D)The New York Yankees are paid $10 million by the Chinese to play an

exhibition game in Beijing, China.

2.In the balance of payments, the statistical discrepancy or error term is used to:

A)Ensure that the sum of all debits matches the sum of all credits.

B)Ensure that imports equal the value of exports.

C)Obtain an accurate account of a balance-of-payments deficit.

D)Obtain an accurate account of a balance-of-payments surplus.

3. A deficit in the overall balance generally is an indication that:

A)The country’s monetary authorities were selling foreign currency.

B)The country’s monetary authorities were buying foreign currency.

C)The country’s monetary authorities were buying domestic currency.

D)The country’s monetary authorities were buying imported goods.

4. Suppose that a Korean television set that costs 600 won in Korea costs $400 in the United States. These prices suggest that the exchange rate between the won and the dollar is:

A)1.5 won per dollar

B)0.75 won per dollar

C)$1.50 per won

D)$3 per won

5. To the US, U.S. capital inflows will create a __________ foreign currency and a __________ U.S. dollars.

A)Demand for; supply of

B)Supply of; demand for

C)Shortage of; demand for

D)Supply of; shortage of

6. U.S. imports of goods and services will create a __________ foreign currency and

a __________ U.S. dollars.

A) Demand for; supply of

B) Supply of; demand for

C) Shortage of; demand for

D) Supply of; shortage of

7.If the spot price of the euro is $1.10 per euro and the 30-day forward rate is $1.00 per euro, and you believe that the spot rate in 30 days will be $1.05 per euro, you can

maximize speculative gains by:

A)Buying euros in the spot market and selling the euros in 30 days at the

future spot rate.

B)Signing a forward foreign exchange contract to sell the euros in 30 days.

C)Signing a forward foreign exchange contract to sell the dollars in 30 days.

D)Buying dollars in the spot market and selling the dollars in 30 days at the

future spot rate.

8.Assume you are a Chinese exporter and expect to receive $250,000 at the end of 60 days. You can remove the risk of loss due to a devaluation of the dollar by:

A)Selling dollars in the forward market for 60-day delivery.

B)Buying dollars now and selling it at the end of 60 days.

C)Selling the yuan equivalent in the forward market for 60-day delivery.

D)Keeping the dollars in the United States after they are delivered to you.

9. The interest rate in the U.K. is 4% for 90 days, the current spot rate is $2.00/£ and the forward rate is $1.96/£. If the covered interest rate differential is about 1%, then the interest rate in the U.S. for 90 days would have to be:

A)7%

B)4%

C)3%

D)2%

10. If the covered interest differential is zero:

A)International investments will be unprofitable.

B)Parity has not been reached.

C)The overall covered return on a foreign-currency investment equals

the return on a comparable domestic-currency investment.

D)A currency is at a forward premium by as much as its interest rate

is higher than the interest rate in the other country.

11. When uncovered interest parity holds:

A)A currency is expected to appreciate by as much as its interest rate

is lower than the interest rate in the other country.

B) A currency is expected to appreciate by as much as its interest rate

is higher than the interest rate in the other country

C) A currency is expected to depreciate by as much as its interest rate

is lower than the interest rate in the other country

D)The forward premium equals the interest rate differential.

12. International Fisher Effect refers to the condition when:

A)Covered differential equals zero.

B)Expected uncovered differential equals zero.

C)Uncovered interest parity holds.

D)Both (B) and (C).