1 Which of the following statements is correct? Group of answer choices

The forward rate is the cost of buying a foreign currency today, on the spot.

The American or direct quote shows the amount of foreign currency per U.S. dollar.

Country risk refers to the political developments in a country that could affect the cash flows associated with a loan or investment in that country.

All the answers are correct.

The bid quote is the rate at which the dealer will sell foreign currency.

2 Which of the following statements is correct? Group of answer choices

The most widely quoted Eurocurrency interest rate is the London Interbank Offer Rate, or LIBOR, which is the long-term premium rate that major insurance firms in London charge to policyholders.

Country risk affects a firm's cash flows.

A Eurocurrency is a time deposit that is in a bank located in a country that issued the currency.

All the answers are correct.

The American or direct quote shows the amount of foreign currency per U.S. dollar.

3. Which of the following statements is correct? Group of answer choices

Foreign bonds sold in the United States are called Samurai bonds.

The forward rate is the exchange rate at which one currency can be converted to another immediately.

All the answers are correct.

A Eurodollar is defined as a U.S. dollar deposited in a bank outside the United States.

If the exchange rate is the price in foreign currency for a dollar, the quote is called an American or direct quote.

4. Which of the following statements is correct? Group of answer choices

The market risk premium for the future is not perfectly known.

If a firm has bonds outstanding and the firm would like to calculate the current cost of debt for the bonds, then the firm would use the CAPM to estimate the cost.

The U.S. tax code allows a deduction for interest expense incurred on borrowing.

The finance balance sheet is the same as the accounting balance sheet, but it is based on book values while the accounting balance sheet is based on market values.

All the answers are correct.