1)

Futures contracts are sold on exchanges and are consequently than forward contracts, which can be to satisfy an MNC's needs.

Select one:

a. more standardized; custom-tailored

b. less standardized; custom-tailored

c. more standardized; standardized

d. more custom-tailored; custom-tailored

e. more custom-tailored; standardized

2)

If a U.S. firm desires to avoid the risk from exchange rate fluctuations, and it is paying 100,000 in 90 days, it could:

Select one:

a. obtain a 90-day forward sale contract on euros.

b. purchase euros 90 days from now at the spot rate.

c. obtain a 90-day forward purchase contract on euros.

d. sell euros 90 days from now at the spot rate.

3)

If the home currency begins to appreciate against other currencies, this should the current account balance, other things equal (assume that substitutes are readily available in the countries, and that the prices charged by firms remain the same).

Select one:

a. increase

b. have no impact.

c. reduce.

d. all of the above are equally possible.

4)

If the interest rate rises in Egypt while other variables remain constant

Select one:

a. capital inflows into Egypt will not affected.

b. capital will flow out of Egypt.

c. capital inflows into Egypt will increase.

d. capital inflows into Egypt will decrease.

e. none of the above

5)

In comparing exporting to FDI, FDI operation will likely incur fixed production costs and transportation costs than exporting.

Select one:

a. lower; higher

b. higher; higher

c. higher; lower

d. lower; lower