International Payment 5

1.On January 10, 20xx, company Q wanted to sell US dollars for British Pounds. Two banks A and B list the following exchange rates: Bank A: GBP/USD=1.4346-51; Bank B: GBP/USD=1.4348-55. The rates applied to transactions between company Q and the bank is

• A.1,4351
• B.1,4346
• C.1,4348
• D.1,4355

2.you have 2 million USD. How would you make a profit if you knew the current exchange rate on the Singapore market is EUR/USD=1.32 and on the Shanghai market it is EUR/USD= 1.21?

• Buy USD in Shanghai and sell it back in Singapore
• Buy USD in Singapore and resell it in Shanghai
• Buy EUR in Shanghai and resell in Singapore
• Buy EUR in Singapore and resell in Shanghai

3.the exchange rate between EUR and INR today is 1EUR=84.01 INR. Please choose the correct statement.

• EUR/INR is an indirect price quote from the German perspective
• INR is the base currency
• EUR/INR is an indirect price quote on the Indian side
• EUR is the quote currency

S has Japanese Yen and needs to change it to Euro. Bank announces f.e.x as USD/JPY =115,09-23 and EUR/USD =1,1366-1,1403 Mr. S will buy EUR at the exchange rate:

• EUR/JPY= 115.23x1.1366
• EUR/JPY= 115.09x1.1403
• EUR/JPY= 115.09x1.1366
• EUR/JPY= 115.23x1.1403

5.Which statement is not true about currency devaluation?

• Currency devaluation is a measure to promote overseas investment of the country implementing the devaluation.
• Currency devaluation is a measure to adjust exchange rates implemented by the central bank of a country.
• Currency devaluation can lead to increased prices of imported goods.
• Currency devaluation can increase the foreign debt of the country implementing the devaluation.

6.China's central bank uses the USD in national foreign exchange reserves to sell into the market to increase the value of the Yuan compared to the US dollar. Which of the following policies has this bank used?

• Currency devaluation policy
• Currency appreciation policy
• Exchange stabilization fund
• Exchange policy

The exchange rates used in spot forex trading are:

• Spot exchange rate
• Official exchange rate
• Forward exchange rate
• Cross rates

A put option gives … the right, but not obligation, to … a specified number of foreign currency units to the option seller (the writer) at a fixed price, up to the option’s expiration date.

• Buyer/buy
• Seller/sell
• Seller/buy
• Buyer/sell

10 Choose the wrong answer: Exchange rate

• It is an important price in the economy
• Affected by many factors including the inflation rate
• Can be adjusted using the "discount interest rate" policy
• When posting exchange rates, the location and time must be clearly stated

11.Choose the correct answer (You can choose more than one answer; points will only be awarded if all answers are selected): When the Thai Baht depreciates against the US dollar,

• Thai investors when investing in the US will be at a disadvantage
• Thai exporters will benefit from increased exports of goods to the US.
• The price of American goods in the Thai market will tend to be more expensive
• Thai tourists will travel to the US more