Exchange Rate Risk & Futures Contracts | Tài chính quốc tế | Trường Học Viện nông nghiệp Việt Nam

Mexicocorp (Mexico) has about $3,500,000 in receivables over the next three
months. Mexicocorp wil hedge against exchange rate risk by: Select one:
a. selling 3-month forward for USD 3,500,000 VND
b. buying a call option contract for USD3,500,000 in 3 months
c. entering a swap contract in which the company sells spot and buys 3-month forward for USD3,500,000
d. Buying future contract to sell 3,500,000 in 3 months
Which of the following statements about futures contracts is NOT TRUE Select one:
a. The clearing house determines the profit and loss of the traders on the delivery days
b. Futures contract parties must deposit initial margin and maintenance margin
c. Contract size, delivery day, delivery month and last trading day of future contracts are standardized
d. Futures contracts are guaranteed by the clearing house
The theory implying that the inflation differential between two economies
reflects the difference in nominal interest rates between the two economies is Select one:
a. Relative purchasing power parity
b. The International Fisher Effect
c. Uncovered interest rate parity
d. Covered interest rate parity
Any event that reduces the euro area demand for Japanese yen should result in
a(n) _______ in the value of the Japanese yen with respect to _______, other things being equal Select one: a. increase; euro
b. decrease; noneuro currencies c. decrease; euro
d. increase; noneuro currencies
Market-based forecasting is based on what? Select one: a. forward rates (2) b. either (1) or (2) c. neither (1) nor (2) d. spot rates (1)
______ forecasting involves use of historical exchange rate data to predict future values. Select one: a. fundamental b. none of the mentioned c. market-based d. technical
There are various forms of purchasing power parity (PPP) theory. Which form of
PPP is also known as the "law of one price"? Select one: a. numerical form b. relative form c. absolute form d. none of the mentioned
Which of the following does NOT explain why PPPs do not actually exist: Select one:
a. Commodity basket structure of economies including those that do not
participate in international trade b. Shipping cost
c. The basket structure of the economies is the same
d. Trade barriers such as taxes and fees exist
If a country experiences high inflation relative to the UK, its exports to the UK
should _______________, its imports should ___________, and there is
__________ pressure on its currency's equilibrium value. Select one: a. decrease; increase; upward
b. decrease; increase; downward
c. decrease; decrease; downward d. decrease; decrease; upward
If a forecaster predicts the British pound to be $1.70 in one year, but the spot
rate of the pound turns out to be $1.80 in one year, what is the absolute forecast
error as a percentage of realized value? Select one: a. -5.56% b. 5.88% c. 5.56% d. -5.88% Absolute PPP says that: Select one:
a. identical items in different markets will cost the same when denominated in the same currency (3)
b. between two points in time, the exchange rate change is equal to the inflation
difference of the two currencies (1)
c. at one point in time, exchange rate is determined by the ratio of the prices of
two baskets of goods in terms of two currencies (2)
d. (1), (2), (3) are all correct.
News of a potential surge in U.S. inflation and zero Chilean inflation places
_______ pressure on the value of the Chilean peso. The pressure will occur _______. Select one: a. downward; immediately b. upward; immediately
c. upward; only after the U.S. inflation surges
d. downward; only after the U.S. inflation surges
The current spot rate is 0.9260 CHF/USD. Expected inflation in Switzerland is
1% while expected inflation in the US is 4%. Assume that PPP is held. The
expected spot rate after one year is: Select one: a. 0.9538CHF/USD b. 0.8993 CHF/USD c. 0.9535CHF/USD d. 0.8900CHF/USD
The Bretton Woods Conference in 1944 resulted in the birth and operation of: Select one: a. (1) and (3) are correct
b. A fixed but adjustable exchange rate system (2)
c. A system in which members are free to choose their exchange rate regime (1)
d. The currencies of the member countries are freely convertible to gold (3)
A put option contract of an exercise price of JPY 90.80/USD is _______ when
the spot price of USD is JPY 90.50 Select one: a. ATM b. ITM c. OTM d. Neither is correct
Which of the following is a similarity between the currency futures market and the forward market? Select one:
a. both use standardized contract sizes b. both are self-regulating
c. none of the above are similarities
d. both use standardized delivery dates
Assume that domestic inflation is higher than foreign inflation. How will this
affect the supply of foreign currency, the demand for foreign currency and the
exchange rate in the foreign exchange market? Select one:
a. Supply decreases, demand increases and the exchange rate increases
b. Supply increases, demand decreases and the exchange rate falls
c. Supply decreases, demand does not change, and the exchange rate falls.
d. Supply increases, demand decreases and the exchange rate rises