Try out our new practice tests completely free!

# Corporate Finance Study Set 2

Bookmark

## Quiz 18 : Multinational Financial Management

If the spot rate of the Israeli shekel is 5.51 shekels per dollar and the 180-day forward rate is 5.97 shekels per dollar, then the forward rate for the Israeli shekel is selling at a ____ to the spot rate.
Free
Multiple Choice

D

In 1985, a given Japanese imported automobile sold for 1,476,000 yen, or $8,200.If the car still sold for the same amount of yen today but the current exchange rate is 144 yen per dollar, what would the car be selling for today in U.S.dollars? Free Multiple Choice Answer: Answer: C Suppose it takes 1.82 U.S.dollars today to purchase one British pound in the foreign exchange market, and currency forecasters predict that the U.S.dollar will depreciate by 12.0% against the pound over the next 30 days.How many dollars will a pound buy in 30 days? Free Multiple Choice Answer: Answer: D Legal and economic differences among countries, although important, do NOT pose significant problems for most multinational corporations when they coordinate and control worldwide operations of subsidiaries. True False Answer: Exchange rate risk is the risk that the cash flows from a foreign project, when converted to the parent company's currency, will be worth less than was originally projected because of exchange rate changes. True False Answer: When the value of the U.S.dollar appreciates against another country's currency, we may purchase more of the foreign currency with a dollar. True False Answer: The United States and most other major industrialized nations currently operate under a system of floating exchange rates. True False Answer: Suppose one U.S.dollar can purchase 144 yen today in the foreign exchange market.If the yen depreciates by 8.0% tomorrow, how many yen could one U.S.dollar buy tomorrow? Multiple Choice Answer: The Eurodollar market is essentially a long-term market; most loans and deposits in this market have maturities longer than one year. True False Answer: Calculating a currency cross rate involves determining the exchange rate for two currencies by using a third currency as a base. True False Answer: A Eurodollar is a U.S.dollar deposited in a bank outside the United States. True False Answer: Exchange rate quotations consist solely of direct quotations. True False Answer: Suppose the exchange rate between U.S.dollars and Swiss francs is SF 1.41 =$1.00, and the exchange rate between the U.S.dollar and the euro is $1.00 = 1.64 euros.What is the cross-rate of Swiss francs to euros? Multiple Choice Answer: If it takes$0.71 U.S.dollars to purchase one Swiss franc, how many Swiss francs can one U.S.dollar buy?
Multiple Choice
If 1.64 Canadian dollars can purchase one U.S.dollar, how many U.S.dollars can you purchase for one Canadian dollar?
Multiple Choice
If the inflation rate in the United States is greater than the inflation rate in Britain, other things held constant, the British pound will
Multiple Choice