4.A US frim has a -denominated payable of 100,000 in 6 months. Rather than a forward hedge or an option hedge, the US firm is going to execute a money market hedge. -denominated money market deposit earns a 3% return over 6 months (i.e. 3% is not the yearly rate, it is in the 6-month period rate). -denominated money market borrowing cost 4% over 6 months (i.e. 4% is not the yearly rate it is 6-months period rate). If the current exchange rate is .60/$. What is the guaranteed dollar amount the US firm will have to pay today in order to pay off the? 100,000.?

$161,812

$160,256

$58,252

$166,667

5. A Japanese firm issues a $-denominated bond and sells the bond in the US. this is a.?

Eurobond market issue

Foreign bond market issue

Foreign domestic bond market issue

Domestic bond market issue

6. Suppose that a US investor buys a foreign stock denominated in EUR. The stock goes up 4% in price. Over the same time period, the EUR appreciates 8% What is the US investors exact USD- denominated percentage rate of retune?

-3.70

4

12.32

-4.32