Brooklyn College FINC3377 Global Financial Management Koppelman School of Business Department of Finance Professor: H.J. Abraham Lin 13. Cachita Haynes works as a currency speculator for Vatic Capital of Los Angeles. The current spot rate is 120.00/$. She must choose between the following 90-day options on the Japanese yen: Option Strike Price Premium Put on yen Call on yen What is Cachita's breakeven price to buy a call? a. 0.00503 b. 0.00S046 c. 0.00603 d. 0.00646 .0.0 0803 f. 0.009 in (dollar/yen) 14. (a. Asian Crisis 1997 b. Argentine Crisis 2002 c. Russian Crisis 1998 d. The Great $0.00800/ $0.00800/ $0.00003/ $0.00046/ Depression 1930 USA) did not have deep devaluation of the local currency 15. Quotation exposure, Backlog exposure and Billing Exposure are referred to as the risk of foreign exchange risk of a. translation exposure b. accounting exposure c. transaction exposure d. operating exposune 16.( a. translation exposure b. accounting exposure c. transaction exposure d operating exposure) is caused by the change in exchange rate and the et valbe i the local currency fluctuate. 17. Using Forward contracts or money market tools or currency options to hedge is a Contractual hedge b. operating hedge, c. financial hedge d accounting hedge 18. Matching currency cash flows, Risk-sharing agreements, Back-to-back or paral loans, and Currency swaps are often used to hedge a. translation exposure b. accounting exposure c. Do transaction exposure d. operating exposure Market conditions have changed. Maria Gonzalez now estimates the risk-free rate to be 3.60%, the company's credit risk premium is 4.40%, the domestic beta is estimated at 1.05, the international beta at .85, and the company's capital structure is now 30% debt. All other values remain the same. Domestic market return is 9% and the international market return is 8%. For both the domestic CAPM and ICAPM, calculate: 19. Please calculate the local WACC of Trident d.8.049% e-6.6980% c, 5.200% 9.270% b. 7.3400% a. 20. Please calculate the international WACC of Trident d.8049% e, 66980% c. 5.200% b, 7.340% a. 9.270%