chapter 8 HW example #76031

Which of the following is the name for U.S. dollars deposited in any bank account outside the United​ States?

What is LIBOR?

Which of the following​ allows, but does not​ require, a firm to buy or sell a specified amount of a foreign currency at a specified price at any time up to a specified​ date?

You work at a bank that performs services for a British bank in the United States. What is this​ called?

In _______, you can use the _____ market to cover your exposure to potential currency depreciation.

Eurocurrency is

Suppose your company imports hand-made leather handbags and shoes from Italy. You prefer

Almost _____% of all forex transactions involve the U.S. dollar. This pre-eminence stems from __________.

Which of the following is a characteristic of the international Fisher​ effect?

According to the International Fisher Effect, if a country's inflation rate is expected to increase, then the nominal interest rate will be ______, and the forward discount will ______.

Suppose the spot rate is $1 = €0.7960 and the 3-month forward rate is $1 = €0.7973. What is the annualized forward premium or discount? (Answer may or may not be approximate.)

Assume the ₤ spot price is $2 and the three-month forward price is $1.75. Then the annualized forward _____ will be ______.

The direct exchange rate is $1.43 / €1. Then the indirect exchange rate is approximately

Suppose: ​₤1 buys​ $3 in​ NY, Tokyo, and London ​$1 buys​ ¥150 in​ NY, Tokyo, and London ​₤1 buys​ ¥175 in​ NY, Tokyo, and London Then

Suppose: ₤1 buys $1.50 in NY, Tokyo, and London $1 buys ¥100 in NY, Tokyo, and London ₤1 buys ¥150 in NY, Tokyo, and London Is there an opportunity for two-point arbitrage?

Corporation A is an international company with business operations in Canada, the U.K., and Australia. The firm believes that the Canadian dollar will increase in value in the future and that pound will decrease in value in the future. In order to take advantage of this situation, what should Corporation A do?

Suppose your company has significant liabilities in ₤. You notice that the ₤ is selling at a forward premium. You advise your CFO to increase your firm's holdings of liabilities in ₤. Is this sound advice?

Suppose US$1 = Can$0.75, and jeans sell in the U.S. for US$50 and in Canada for Can$37.50. Then purchasing power parity exists.