When an exchange rate is quoted by a dealer in country as the local currency price of one unit of foreign currency, he is quoting the ________. A) indirect quote B) direct quote C) bid quote D) ask quote ANSWER Answer: B
Date: September 19th, 2020
Which one of the following features is not part of the interbank foreign exchange market? A) derivative securities such as foreign currency futures and options B) trade in swaps and forward contracts C) immediate exchanges of monies D) non-strategic loans ANSWER Answer: D
Date: September 19th, 2020
Which one of the following is not a characteristic of a liquid market? A) Market makers stand ready to buy and sell currencies. B) Foreign exchange dealers make transactions only with dealers. C) It becomes easy to match buyers and sellers. D) Transaction costs are low. ANSWER Answer: B
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
A 10% increase in sales causes EPS to rise from $0.50 to $0.56. Assuming the firm has no debt, what is its degree of operating leverage (DOL)? A) 1.00 B) 1.20 C) 0.83 D) 1.50 E) 0.75 ANSWER B
Date: September 19th, 2020
