Regression tests of the unbiasedness hypothesis indicate that it is ________ with real life events. A) an unbiased indicator of expected future exchange rates B) very consistent C) not consistent D) has a strong correlation to the current account ANSWER Answer: C
Date: September 19th, 2020
With the ACH (automated clearing house) credits, disbursement float is sacrificed because ACH transactions immediately draw down a company’s payroll account on pay day. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Modern portfolio theory developed by William F. Sharpe is the foundation of ________. A) currency market parity models B) the balance sheet hedge C) the capital asset pricing model D) adjusted net present value model ANSWER Answer: C
Date: September 19th, 2020
Multinational corporations most often hedge their transaction exchange rate risk using currency ________. A) options B) futures C) spreads D) forward contracts ANSWER Answer: D
Date: September 19th, 2020
If investors ________, we would assume that do not make systematic mistakes when forecasting exchange rates. A) have rational expectations B) have complete knowledge of all possible bid and ask quotes C) know that interest rate differentials provide information about the intensity of devaluations D) anticipate events that occur ANSWER Answer: A
Date: September 19th, 2020
When the forward rate is equal to the expected future spot rate, the forward rate is said to be ________ the future spot rate. A) an information signal for B) an unbiased predictor of C) a hedge for D) in parity with the expected future spot rate ANSWER Answer: B
Date: September 19th, 2020
Collection float is experienced by a payer and is a delay in the receipt of funds. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Which one of the following would some say invalidates the unbiasedness hypothesis? A) the Fisher Effect B) the efficient market hypothesis C) the Siegel paradox D) the law of one price ANSWER Answer: C
Date: September 19th, 2020
If market efficiency is identified with parity, currency markets that are ________ provide no opportunities for currency traders to earn profits. A) not in parity B) in parity C) in interest rate parity only D) in purchasing power parity ANSWER Answer: B
Date: September 19th, 2020
Disbursement float is experienced by a payee and is a delay in the actual withdrawal of funds. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
