home work need help can you help-Excel for calculations required by Questions 26-35.

1. A South Korean company imports from the U.S. and pays in U.S. dollars. The spot exchange rate is $/1054won and the forward rate is the same. The South Korean company expects the U.S. dollar to appreciate against the won. The South Korean company could protect its position by: entering into a hedge buying dollars forward entering into a hedge selling dollars forward entering into locational arbitrage entering into triangular arbitrage none of the above 2. The inflation rate is expected to rise substantially in Argentina while U.S. inflation remains unchanged. With respect to the U.S. dollar, this would: place either upward or downward pressure on the Argentine real (depending on degree of increase in Argentine inflation) place upward pressure on the Argentine peso place downward pressure on the Argentine peso place downward pressure on the U.S. dollar none of the above 3. A U.S. company purchases materials from a company in Brazil for 1 million reals. It receives revenues from Brazil of 2 million reals. The U.S. company would: be unaffected by a stronger dollar be unaffected by a weaker dollar benefit from a stronger dollar benefit from a weaker dollar none of the above 4 A U.S. MNC expects net cash inflows of equal amounts in two foreign currencies. The two currencies are positively correlated. The MNC's transaction exposure is: relatively high relatively low neutral need more information to answer this question none of the above 5 The most important goal of a domestic firm is to maximize shareholder wealth. The most important goal of a MNC is to: maximize sales volume maximize earnings maximize employee wellbeing maximize shareholder wealth none of the above 6 The capital account includes: Interest and dividend payments received by investors on foreign securities unilateral transfers portfolio investment all of the above none of the above 7 A U.S.based MNC has 10 million yen receivables due in 60 days. It is certain that the yen will appreciate substantially over time and the expected appreciation is already priced into the forward market. If the firm is correct, it should: sell yen forward. purchase yen currency put options. purchase yen currency call options. purchase yen forward. remain unhedged 8 The U.S. tends to import more when: economic growth in foreign countries increases the currencies of foreign countries strengthen against the dollar the currencies of foreign countries weaken against the dollar. U.S. inflation rises. none of the above 9 European currency options: have all of the same characteristics as Americanstyle options, but trade only in European markets are similar to Americanstyle options, except they can only be exercised on the expiration date usually have the same premium as Americanstyle options are not available for speculating in the foreign exchange market none of the above 10The exchange rate of the British pound is $1.31. This is an example of: a direct quotation showing how many dollars a pound will buy a direct quotation showing how many pounds a dollar will buy an indirect quotation showing how many dollars a pound will buy an indirect quotation showing how many pounds a dollar will buy none of the above 11Eurobonds: are denominated only in euros are rarely issued in bearer form are denominated in a number of currencies do not have secondary markets none of the above 12When goods are exported at prices below cost: the local government may be providing free loans the local government may be providing free land it may be considered dumping all of the above none of the above 13A U.S. MNC should increase in value when its cash flows from subsidiaries in China and Vietnam increase, and when the: Chinese yuan and Vietnamese dong appreciate Chinese yuan and Vietnamese dong depreciate the yuan appreciates and the dong depreciates the dong appreciates and the yuan depreciates none of the above 14Economic exposure: represents only the exchange rate risk when converting net foreign cash inflow to the local currency represents any impact of exchange rate fluctuations on a firm's future cash flows represents contractual transactions denominated in foreign currencies is shortterm in nature none of the above 15A U.S. company focuses on local sales, but buys inventory, denominated in yen, from Japanese companies. The company has almost no foreign competition. The company will probably benefit most by: depreciation of the local currency appreciation of the local currency appreciation of the yen a stable yen none of the above 16The market price of a currency call option will probably increase if: the strike price is increased the length of time to expiration is shorter the underlying currency fluctuates in value the value of the underlying currency depreciates none of the above 17The Fijian dollar cannot have which of the bid/ask quotations shown below? $.57/$.56 $.57/$.59 $.53/$.54 $.58/$.60 All of the above are possible bid/ask quotations. 18 If Mexican demand for U.S. dollars increases, and other things remain constant, which of the following should occur: the value of the dollar should decrease the value of the dollar should increase the value of the dollar should remain the same the value of the peso should increase none of the above 19 From the standpoint of the U.S., a Canadian purchase of U.S. securities represents a: capital outflow unilateral transfer capital inflow trade inflow none of the above 20 Portugal currently has a balance of trade deficit with Country X. When a firm in Country X manufactures a product that is almost identical to the original product produced in Portugal and other countries, this: increases Portugal's capital account deficit decreases Portugal's capital account deficit increases the balance of trade deficit with Country X decreases the balance of trade deficit with Country X none of the above 21 Last week, the Brazilian real was worth $0.50, but appreciated 2% by the end of the week. What is the value of the real today. Show how you derive the answer. $0.510 $0.49 $0.52 $1.15 none of the above 22 The Hong Kong dollar is: allowed to fluctuate freely pegged to the Chinese yuan pegged to the U.S. dollar pegged to the euro none of the above 23 Depreciation of a firm's local currency will benefit from which of the following operations: borrowing in a foreign currency paying dividends to foreign stockholders purchasing supplies overseas exporting to foreign countries none of the above 24 A British MNC believes that the U.S. dollar is going to depreciate significantly in the near future. It has payables of $1 million due in 60 days. If the MNC is correct that the dollar will depreciate, a good strategy is to: sell dollars forward purchase dollars forward purchase dollar currency call options remain unhedged none of the above 25 A Belgian company purchases materials from a company in the U.S. for 1.5 million euros. It receives revenues from the U.S. of 2 million euros. The Belgian company: would be unaffected by a stronger dollar has high transaction exposure has high economic exposure has high translation exposure none of the above 26 A U.S. company sells goods to a Canadian company for 8 million Canadian dollars, purchases supplies from Canadian companies for 7 million Canadian dollars, and incurs interest expense of 4 million Canadian dollars on Canadian loans. The exchange rate is C$/US$1.014. (1) Calculate the US$ value of the company's cash flows; (2) Would the US$ value of the cash flows increase or decrease with an exchange rate of C$/US$.98 and how much? Show how you derive your answers. 27 "A U.S. company expects to receive 1 million British pounds in 1 year. The U.S. deposit rate for 1 year is 4% and the borrowing rate for 1 year is 9%. The British deposit rate for 1 year is 3% and the borrowing rate for 1 year is 8%. The British pound spot rate is $1.61 and the 1year forward rate is $1.62. Calculate the value of these exports in 1 year in U.S. dollars if the company enters into a money market hedge. Show how you derive your answer. " 28 MLC Audio is a U.S.based MNC that has subsidiaries in three European countries. The subsidiaries frequently remit their earnings back to the parent company. This year, the Portuguese subsidiary generated a net outflow of 2,000,000, the Spanish subsidiary generated a net inflow of 2,500,000, and the Italian subsidiary generated a net inflow of 500,000. Calculate the net inflow or outflow as measured in U.S. dollars this year. The exchange rate for the euro is $1.31. Show how you derive your answer. 29 In Period 1, the predicted value of the Mexican peso was $0.13 and the realized value was $0.14. In period 2 the predicted value was $0.14 and the realized value was $0.12. In period 3, the predicted value was $0.13 and the realized value was $0.15. Calculate the mean absolute forecast error as a percentage of the realized value. Show how you derive your answer. 30 The U.S. oneyear interest rate is 5% and its expected annual inflation rate is 3%. The 1year Chinese interest rate is 10% and its expected annual inflation rate is 8%. You plan to invest $100,000 in the Chinese market for one year and you believe that PPP holds. The spot exchange rate of a Chinese RMB is $0.159. Calculate the percentage yield on your investment? Show how you derive your answer. 31 The current spot rate of the Mexican peso is $0.13 and the 180day forward rate is $0.14. The180day deposit rate is 1% in the U.S. and 4% in Mexico. An investor plans to use covered interest arbitrage for a 180day investment of $1 million. (1) Calculate how many U.S. dollars you will have after 180 days; and (2) the amount of the gain or loss. Show how you derive your answers. 32 The bid rate of an Australian dollar is $1.055 and the ask rate is $1.065 at Bank 1. The bid rate of the Australian dollar is $1.04 and the ask rate is $1.05 at Bank Y. Calculate your gain if you use $1,000,000 and execute locational arbitrage. Show how you derive your answer. 33 The spot rate of the British pound is $1.61. The premium on a British pound call option is $.02 and the exercise price is $1.65. The option will be exercised on the expiration date, if at all. The spot rate on the expiration date is $1.66. (1) Calculate the profit as a percent of the premium paid. Show how you derive your answer; and (2) Will the option be exercised? 34 One ADR of a German company sells for $55.50 and the ADR is convertible into 2 shares of stock. The spot rate of the euro is $1.31. Calculate the share price of the firm in euros. Show how you derive your answer. 35 At the end of the year, a U.S. company has expected cash flows of 1,000,000 from Japanese operations, CHF200,000 from Swiss operations, and 350,000 euros from German operations. At the end of the year, the yen value is expected to be. $.011; the Swiss franc value is expected to be $1.08, and the euro value is expected to be $1.31. Calculate expected dollar cash flows for the company by currency and total. Show how you derive your