If you were trading currency in the New York currency market, the exchange rate between two currencies not expressed in U.S. dollars would be known as the ________ quote. A) direct B) indirect C) cross-rate D) European ANSWER Answer: C
Date: September 19th, 2020
The broker at Deutsche Bank quotes bid-ask rates of ¥104.15-30/$. What would be its direct asking price for yen if the bank’s €/$ ask rate is .6550? A) €.0061/¥ B) €.00628/¥ C) €159.24/¥ D) €164.25/¥ ANSWER Answer: B
Date: September 19th, 2020
The ________ quote refers to the dollar price of a foreign currency. A) European B) American C) Bid D) Ask ANSWER Answer: B
Date: September 19th, 2020
The CFO at SmithKlone Company receives a lump sum payment from a foreign vendor of 2,000 euros and intends to convert them to US$. When she calls her currency broker, the quote given is €.6250-.6667/US$. What can she expect to realize in US$ from the broker? A) $3,200 B) $3,000 C) $1,250 D) $1,334 […]
Date: September 19th, 2020
Gold-Jerry Gold Corporation is a mid-tier gold producer listed on the New York Stock Exchange. It is currently the end of Year 1, and the fiscal situation in the U.S and Europe is dire. Kenny Bania, an analyst at Gold-Jerry, forecasts that gold prices will rise during Year 2, since gold is regarded as a […]
Date: September 19th, 2020
What do the market makers in the currency markets provide? A) insurance against default by the buyers B) solvency C) stability D) liquidity ANSWER Answer: D
Date: September 19th, 2020
Durosteel Shafts Inc supplies cam shafts to GM for their popular Chevy Malibu model. Automobile sales fell significantly during the recent financial crisis. Now, at the end of Year 1, GDP is growing again and GM is forecasting an increase in automobile sales of 11% over the coming year. Use the data in the table […]
Date: September 19th, 2020
Which one of the following are the main participants in the global currency markets? A) commercial banks B) insurance companies C) hedge funds D) private equity funds ANSWER Answer: A
Date: September 19th, 2020
When transactions are conducted on the spot currency markets, ________ business day(s) is(are) allowed for contract settlement. A) one B) two C) five D) ten ANSWER Answer: B
Date: September 19th, 2020
CashCow Inc is all equity financed and generates perpetual annual EBIT of $100. Assume that the EBIT, and all other cash flows, occur at year end and that we are currently at the beginning of a year. CashCow has 150 shares outstanding and shareholders require a return of 10%. CashCow hires a new CEO, a […]
Date: September 19th, 2020
