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Author Archives: Anonymous

If interest rates on the euro are consistently below U.S. in…

If interest rates on the euro are consistently below U.S. interest rates, then for the international Fisher effect (IFE) to hold:

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If the Fed desires to strengthen the dollar without affectin…

If the Fed desires to strengthen the dollar without affecting the dollar money supply, it should:

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Assume the following information:   U.S. investors have $1,0…

Assume the following information:   U.S. investors have $1,000,000 to invest: 1-year deposit rate offered by U.S. banks = 12% 1-year deposit rate offered on Swiss francs = 10% 1-year forward rate of Swiss francs = $.62 Spot rate of Swiss franc = $.60   Given this information:

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Generally, MNCs with more foreign costs than foreign revenue…

Generally, MNCs with more foreign costs than foreign revenues will be ____ affected by a ____ foreign currency.

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Assume the following information for a bank quoting on spot…

Assume the following information for a bank quoting on spot exchange rates:   Exchange rate of Singapore dollar in U.S. $ = $.32 Exchange rate of pound in U.S. $ = $1.50 Exchange rate of pound in Singapore dollars = S$4.50   Based on the information given, as you and others perform triangular arbitrage, what should logically happen to the spot exchange rates?

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If a U.S. firm’s expenses are more susceptible to exchange r…

If a U.S. firm’s expenses are more susceptible to exchange rate movements than revenue, the firm will ____ if the dollar ____.

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The most commonly used scale on architectural plans is ____.

The most commonly used scale on architectural plans is ____.

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Intracompany trade makes up approximately ________ percent o…

Intracompany trade makes up approximately ________ percent of all international trade.

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If the interest rate is lower in the U.S. than in the United…

If the interest rate is lower in the U.S. than in the United Kingdom, and if the forward rate of the British pound is the same as its spot rate:

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Assume the following information:  Current spot rate of…

Assume the following information:  Current spot rate of New Zealand dollar = $.41 Forecasted spot rate of New Zealand dollar 1 year from now = $.43 One-year forward rate of the New Zealand dollar = $.42 Annual interest rate on New Zealand dollars = 8% Annual interest rate on U.S. dollars = 9%   Given the information in this question, the return from covered interest arbitrage by U.S. investors with $500,000 to invest is ____%.

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