6. The Sarbanes-Oxley Act, which was passed by the U.S. Congress in July 2002, was not designed for which of the following major requirements? A) corporate boards must have audit committees drawn from independent directors; B) reform corporate governance C) companies can no longer make loans to corporate directors D) limit trade with countries deemed lenient on terrorism. 17. Which of the following led to the eventual demise of the fixed currency exchange rate regime worked out at Bretton Woods? A) Widely divergent national monetary and fiscal policies among member nations. B) Differential rates of inflation across member nations C) Several unexpected economic shocks to member nations. D) all of the above Under the gold standard of currency exchange that existed from 1879 to 1914, an ounce of gold 18. cost $20.67 in U.S. dollars and 4.2474 in British pounds. Therefore, the equilibrium exchange rate between the pound and dollar that prevails under gold standard is represented by A) $4.8665SVE B) E0.205S/s C) always changing because the price of gold was always changing. D) unknown because there is not enough information to answer this question E) A and B In the foreign exchange market, while A) wholesalers; retailers B) central banks; treasuries C) speculators; arbitragers D) dealers; brokers 19. seek all of their profit from exchange rate changes seek to profit from simultaneous exchange rate differences in different markets. 20. A forward contract to deliver U.S. dollars for British pounds could be described either as or A) buying dollars forward; buying pounds forward. B) selling pounds forward; selling dollars forward. C) selling pounds forward; buying dollars forward. D) selling dollars forward; buying pounds forward. 21. Consider the bid-offer quote of USD/AUD is 0.6000-0.6015 and USD/MXP is 0.0933-0.0935. What is the implied MXN/AUD cross rate? A: MXPI/AUD 10.6952-10.7181 B: MXP/USD 6.4200-6.4469 C: MXP/USD 6.43087-6.4331 D: MXP/USD 10.8520-10.9523 22. You are given the following exchange rate quotes in Sydney: USD/AUD AUDVEUR USDVEU 0.5366 1.6428 0.8782 Calculate the US dollar profit, if any, on a three-point arbitrage. A: USD1.0038 for every 1 USD invested B: USDO.2320 for every 1 USD invested C: USD1.0043 for every 1 USD invested D: USD 0.0038 for every USD invested 23. If a forecast indicates that the spot exchange rate will be lower than the forward rate on the maturity date of the forward contract: A) a speculator will buy forward and sell spot upon delivery B) a speculator will sell forward and sell spot upon delivery
