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Q 1/40
Score 0
Due to the risks involved in international business, firms should
60
maintain international business to no more than 35% of total business
None of above
only consider international business in major countries
maintain international business to no more than 20% of total business
Q 2/40
Score 0
With regard to corporate goals, an MNC is mostly concerned with maximizing ____, and a purely domestic firm is mostly concerned with maximizing ____.
60
shareholder wealth; shareholder wealth
short-term earnings; sales volume
short-term earnings; shareholder wealth
shareholder wealth; short-term earnings
40 questions
Q.
Due to the risks involved in international business, firms should
1
60 sec
Q.
With regard to corporate goals, an MNC is mostly concerned with maximizing ____, and a purely domestic firm is mostly concerned with maximizing ____.
2
60 sec
Q.
For the MNC, agency costs are typically
3
60 sec
Q.
The valuation of an MNC should rise when an event causes the expected cash flows from foreign to ____ and when foreign currencies denominating these cash flows are expected to ____.
4
60 sec
Q.
An increase in the current account deficit will place ____ pressure on the home currency value, other things equal
5
60 sec
Q.
The World Bank was established to_____
6
60 sec
Q.
The International Development Association was established to_____
7
60 sec
Q.
Which of the following is not mentioned in the text as an additional risk resulting from international business
8
60 sec
Q.
Assume that a bank's bid rate on Swiss francs is $.45 and its ask rate is $.47. Its bid-ask percentage spread is
9
30 sec
Q.
The bid/ask spread for small retail transactions is commonly in the range of ____ percent?
10
60 sec
Q.
Which of the following statement is incorrect regarding to spot market liquidity?
11
60 sec
Q.
Which of the following is not the main objective of the international money market?
12
60 sec
Q.
What is main purpose of calculating the bid-ask spread on an exchange rate?
13
60 sec
Q.
Assume that $1 is equal to .85 British Pound and 98 yen. What is the value of British Pound in Yen
14
60 sec
Q.
Which of the following is an incorrect bid/ask quotation for the Taiwan dollar?
15
60 sec
Q.
You observe a quotation of the Swiss Franc of $0.007. You are, however, interested in the number of Swiss Franc per dollar. Thus, you calculate the ____ quotation of ____ Swiss Franc /$.
16
60 sec
Q.
An MNC's medium debt financing decisions are satisfied in the ____ market, while its short-term financing decisions are satisfied in the ____ market?
17
60 sec
Q.
The owners of a multinational firm are the
18
60 sec
Q.
The world's largest foreign exchange trading center is
19
60 sec
Q.
What is the spot market?
20
60 sec
Q.
Suppose that the current exchange rate is €0.80 = $1.00. The direct quote, from the U.S. perspective is
21
60 sec
Q.
The Bid price
22
60 sec
Q.
Suppose a bank customer with €1,000,000 wishes buy Japanese yen. The dollar-euro exchange rate is quoted as $1.60 = €1.00 and the dollar-yen exchange rate is quoted at $1.00 = ¥120. How many yen will the customer get
23
60 sec
Q.
The largest and most active financial market in the world is
24
60 sec
Q.
What is the definition of a call option?
25
60 sec
Q.
Mr. Nghia purchase a put option that was written on £100,000. The strike price is $1.50 = £1.00 and the option premium is $0.02 per British Pound. What is the theoretical maximum gain on this position in USD?
26
60 sec
Q.
If we have 2 put options that have the same maturity and premium, the more valuable one will have a
27
60 sec
Q.
Which of the following does the most to reduce default risk for futures contracts?
28
60 sec
Q.
A put option has a strike price of $15. The price of the underlying stock is currently $22. The put is
29
60 sec
Q.
Who has the right to sell an asset at a “lock-in” price
30
60 sec
Q.
Who has an obligation to sell an asset at a “lock-in” price?
31
60 sec
Q.
Which of the following strategies will be profitable if the price of the underlying asset is expected to decrease?
32
60 sec
Q.
A _________ option is said to be in the money when the market price of the underlying security _______ the exercise price?
33
30 sec
Q.
The ________ the existing market price of the underlying financial instrument relative to the strike price, the ______ the call option premium.
34
60 sec
Q.
A foreign currency ________ option gives the holder the right to ________ a foreign currency whereas a foreign currency ________ option gives the holder the right to ________ an option
35
60 sec
Q.
The price at which an option can be exercised is called the ________
36
30 sec
Q.
The maximum gain for the purchaser of a call option contract is ________ while the maximum loss is ________.
37
60 sec
Q.
Which of the following is NOT true for the writer of a call option?
38
60 sec
Q.
You have to pay a loan denominated in SGD due in 6 months. To protect yourself against unexpected changes in the VND/SGD exchange rate you should?
39
60 sec
Q.
Which of the following is NOT a factor in determining the premium price of a currency option?
