International Financial Market

The forward rate is the exchange rate used for immediate exchange of currencies.

• True

• False

If a U.S. firm desires to avoid the risk from exchange rate fluctuations, and it will need C$200,000 in 90 days to make payment on imports from Canada, it could:

• obtain a 90 day forward purchase contract on Canadian dollars.

• obtain a 90 day forward sale contract on Canadian dollars.

• purchase Canadian dollars 90 days from now at the spot rate.

• sell Canadian dollars 90 days from now at the spot rate.

A forward contract can be used to lock in the __________ of a specified currency for a future point in time.

• purchase price

• sale price

• purchase price

  and sale price

• none of the above

A syndicated loan:

• represents a loan by a single bank to a syndicate of corporations.

• represents a loan by a single bank to a syndicate of country governments.

• represents a direct loan by a syndicate of oil producing exporters to a less developed country.

• represents a loan by a group of banks to a borrower.

Eurobonds:

• can be issued only by European firms.

  and be sold only to European investors.

• can be sold only to European investors.

• can be issued only by European firms.

• none of the above.

An investor engaging in a transaction whereby he or she contracts to purchase British pounds one year from now is an example of a spot market transaction.

• True

• False

A cross exchange rate expresses the amount of one foreign currency per unit of another foreign currency.

• True

• False

Assume that a bank's bid rate on Japanese yen is $.0041 and its ask rate is $.0043. Its bid ask percentage spread is:

• about 4.99%.

• about 4.43%.

• about 4.65%.

• about 4.88%.

.......is a style of dance where several couples dance choreographically around a circle.

• Tango

• Kizomba

• Salsa

• Salsa Rueda