Hi.

83.

Which of the following is a risk evaluation system in international lending today?

A.

The Seat-of-the-pants method

B.

The Discrimination method

C.

The Delphi method

D.

The State-risk indicator method

E.

None of the options is correct.

84.

The Hagard Mercantile Company has made a $30 million investment in a mill in Germany and fears a substantial decline in the mark's current spot rate from $0.63 to $0.56 lowering the value of the company's investment in the mill. Which of the following currency contracts can help Hagard solve this problem?

A.

Call currency option

B.

Put currency option

C.

Long-hedge currency futures contract

D.

Currency swap contract

E.

None of the options is correct.

85.

The Goudge Grilling Company has just ordered a shipment of grills from Frankfurt. Payment for the grills must be in euros when the grills are delivered. Euros have changed in value in the last 30 days. They have gone from $1.42 to $1.44. If this trend continues which of the following currency contracts can help the Goudge Grilling Company hedge their currency risk?

A.

Put currency option

B.

Short-hedge currency futures contract

C.

Long-hedge currency futures contract

D.

Currency swap contract

E.

None of the options is correct.

86.

As the text suggests, all of the following areas of the world have significant opportunities for foreign banks except:

A.

Asia.

B.

China.

C.

Russia.

D.

Japan.

E.

South Korea.

87.

The primary source for international bank statistics is:

A.

the FDIC.

B.

the OCC.

C.

the BIS.

D.

the ETC.

E.

the United Nations.

-fm