13. The Fisher Effect states: a. The real interest rate in any country equals the nominal rate of interest b. The spot exchange rate between to countries is determined by the c. The nominal d. The difference in the national interest rates for securities of similar risk plus the expected rate of inflation. difference in the actual rates of inflation between the two plus the expected rate of inflation and maturity should be equal to but opposite in sign to the foreword rate l interest rate in any country equals the real rate of interest discount or premium for the foreign currency 14. If a "Big Mac" costs 50 Czech korunas in Prague and 30 Austrian schillings in Vienna, then the implicit exchange rate is: a. 0.6000 Ckr/Sch b. 1.6667 Ckr/Sch c. 0.6667 Sch/Ckr d. Both A and B e. None of the above e parent of a foreign subsidiary or affiliate will most likely accelerate the rate at which it transfers earnings and cash flows to the parent firm if: 15. Th a. It feels the foreign host country is becoming politically unstable b. Intra-firm payables are in the host country's currency, which is currently depreciating c. Income tax rate in the home country are higher than those in the foreign host country A and B above A, B, and C above d. e. 16. In currency matching, a firm should select the currency in which debt is denominated. a. To match the currency denomination of its current assets b. To match the currency denomination of its future cash flows c. To match the currency denomination of its fluctuating current assets d. To match the currency denomination of its shareholder's equity e. To match the currency denomination of its accounting exposure