1. FIN 534 Week 12 Quiz 10
(15 questions with answers) 99,99 % Scored
PLEASE DOWNLOAD HERE
Finance 534 week 11 quiz 10
• Question 1
Suppose DeGraw Corporation, a U.S. exporter, sold a solar heating station to a
Japanese customer at a price of 143.5 million yen, when the exchange rate was
140 yen per dollar. In order to close the sale, DeGraw agreed to make the bill
payable in yen, thus agreeing to take some exchange rate risk for the transaction.
The terms were net 6 months. If the yen fell against the dollar such that one
dollar would buy 154.4 yen when the invoice was paid, what dollar amount would
DeGraw actually receive after it exchanged yen for U.S. dollars?
Question 2
Suppose 144 yen could be purchased in the foreign exchange market for one
U.S. dollar today. If the yen depreciates by 8.0% tomorrow, how many yen could
one U.S. dollar buy tomorrow?
• Question 3
Suppose one British pound can purchase 1.82 U.S. dollars today 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?
• Question 4
Suppose 6 months ago a Swiss investor bought a 6-month U.S. Treasury bill at a
price of $9,708.74, with a maturity value of $10,000. The exchange rate at that
time was 1.420 Swiss francs per dollar. Today, at maturity, the exchange rate is
1.324 Swiss francs per dollar. What is the annualized rate of return to the Swiss
investor?
• Question 5
A box of candy costs 28.80 Swiss francs in Switzerland and $20 in the United
States. Assuming that purchasing power parity (PPP) holds, what is the current
exchange rate?

2. • Question 6
Suppose one year ago, Hein Company had inventory in Britain valued at 240,000
pounds. The exchange rate for dollars to pounds was 1£ = 2 U.S. dollars. This
year the exchange rate is 1£ = 1.82 U.S. dollars. The inventory in Britain is still
valued at 240,000 pounds. What is the gain or loss in inventory value in U.S.
dollars as a result of the change in exchange rates?
• Question 7
Which of the following is NOT a reason why companies move into international
operations?
• Question 8
If one U.S. dollar buys 1.64 Canadian dollars, how many U.S. dollars can you
purchase for one Canadian dollar?
• Question 9
If the inflation rate in the United States is greater than the inflation rate in Britain,
other things held constant, the British pound will
• Question 10
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?
• Question 11
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 $ euros.
What is the cross-rate of Swiss francs to euros?
• Question 12
Suppose hockey skates sell in Canada for 105 Canadian dollars, and 1 Canadian
dollar equals 0.71 U.S. dollars. If purchasing power parity (PPP) holds, what is
the price of hockey skates in the United States?
• Question 13
If one Swiss franc can purchase $0.71 U.S. dollars, how many Swiss francs can
one U.S. dollar buy?
• Question 14

3. Suppose 90-day investments in Britain have a 6% annualized return and a 1.5%
quarterly (90-day) return. In the U.S., 90-day investments of similar risk have a
4% annualized return and a 1% quarterly (90-day) return. In the 90-day forward
market, 1 British pound equals $1.65. If interest rate parity holds, what is the spot
exchange rate?
• Question 15
Which of the following statements is NOT CORRECT?