国际金融Chapter 4(课堂PPT)

A) reduce; increase
B) increase; reduce
C) reduce; reduce
D) increase; increase
.
6
Answer: E
6. Baylor Bank believes the New ZealaHale Waihona Puke Baidud dollar will appreciate over the
next five days from $.48 to $.50. The following annual interest rates apply:
Currency
Lending Rate
Borrowing Rate
Dollars
7.10%
7.50%
New Zealand dollar (NZ$) 6.80%
.
4
Answer: B
4. A large increase in the income level in Mexico along with no growth in the U.S. income level is normally expected to cause (assuming no change in interest rates or other factors) a(n) _______ in Mexican demand for U.S. goods, and the Mexican peso should _______.
A) liquid; highly sensitive
B) illiquid; insensitive
C) illiquid; highly sensitive
D) none of these
.
3
Answer: E
3. _______ is not a factor that causes currency supply and demand schedules to change.
Chapter 4
.
1
Answer: C ($0.73 – $0.69)/$0.69 = 5.80%
1. The value of the Australian dollar (A$) today is $0.73. Yesterday, the value of the Australian dollar was $0.69. The Australian dollar _______ by _______%.
.
7
1. 2. 3.
4.
5.
6.
Borrow $5 million. Convert to NZ$: $5,000,000/$.48 = NZ$10,416,667. Invest the NZ$ at an annualized rate of 6.80% over five days.
NZ$10,416,667 × [1 + 6.80% (5/360)] = NZ$10,426,505 Convert the NZ$ back to dollars: NZ$10,426,505 × $.50 = $5,213,252 Repay the dollars borrowed. The repayment amount is: $5,000,000 × [1 + 7.5% (5/360)] = $5,000,000 × [1.00104] = $5,005,208 After repaying the loan, the remaining dollar profit is: $5,213,252 – $5,005,208 = $208,044
A) depreciated; 5.80 B) depreciated; 4.00 C) appreciated; 5.80 D) appreciated; 4.00
.
2
Answer: C
2. If a currency’s spot rate market is _______, its exchange rate is likely to be _______ to a single large purchase or sale transaction.
A) Relative inflation rates B) Relative interest rates C) Relative income levels D) Expectations E) All of these are factors that cause currency
supply and demand schedules to change.
7.25%
Baylor Bank has the capacity to borrow either NZ$10 million or $5 million. If Baylor Bank’s forecast if correct, what will its dollar profit be from speculation over the five day period (assuming it does not use any of its existing consumer deposits to capitalize on its expectations)? Daily interest rate is 1/360 of the annual rate. A) $521,325. B) $500,520. C) $104,262. D) $413,419. E) $208,044.
A) increase; appreciate
B) increase; depreciate
C) decrease; depreciate
D) decrease; appreciate
.
5
Answer: A
5. An increase in U.S. interest rates relative to German interest rates would likely _______ the U.S. demand for euros and _______ the supply of euros for sale.