1. According to The National Post, the spot exchange rate for the Euro is Euro 1 = $0.63. The six-month forward exchange rate is Euro 1 = $0.67. Based on these quotes, the Euro is selling at a premium relative to the dollar, and the dollar is selling at a discount relative to the Euro. (TRUE / FALSE) 2. Triangle arbitrage is a profitable situation involving two separate currency exchange transactions. (TRUE / FALSE) 3. According to the relative purchasing power parity theory, high inflation in country A and low inflation in country B will cause the value of country A's currency to appreciate relative to that of country B. (TRUE / FALSE) Chapter 22: 4. If the lessee is generally responsible for the maintenance of the leased asset, then this scenario represents a characteristic of an operating lease. (TRUE / FALSE) 5. Bondo Manufacturing has just signed a lease agreement with MIPS Computers. Bondo agreed to pay $15,000 per month for 12 months. The purchase price of the equipment is $400,000. According to the lease agreement, MIPS will pay property taxes and insurance on the equipment. This lease is most likely a operating lease. (TRUE / FALSE) 6. All else being equal, the lower the cost of the equipment to be leased, the greater the net advantage to leasing (NAL) to the lessee. (TRUE / FALSE) Chapter 23: 7. An acquisition of a firm through the purchase of shares of the outstanding stock can be accomplished without having the shareholders vote on the acquisition. (TRUE / FALSE) 8. It has been suggested that the reason why the stockholders in acquiring firms may not benefit to any significant degree from an acquisition is because the target firms tend to be much larger than the acquiring firms. (TRUE / FALSE) 9. When one firm acquires another solely for the purpose of diversification, the merger is called a horizontal merger. (TRUE FALSE)