If Chinese Yuan becomes stronger relative to US dollar, it would discourage US exports, and benefit US consumers discourage US exports, and hurt US consumers encourage US exports, and benefit US consumers encourage US exports, and hurt US consumers A U.S. firm has borrowed pound 50 million from a British firm. The borrower will need to convert dollars to pounds to repay the loan when it is due. The U.S. firm could hedge the exchange rate risk by Buying pounds forward Selling pounds forward Borrowing pounds Buying dollars forward Borrowing dollars A U.S. bank converted $1 million to Swiss francs to make a Swiss franc loan to a valued corporate customer when the exchange rate was 1.2 francs per dollar. The borrower agreed to repay the principle plus 5% interest in 1 year. The borrower repaid Swiss francs at loan maturity and when the loan was repaid the exchange rate was 1.3 francs per dollar. What was the bank's dollar rate of return? 13.75% -2.69% 7.14% -3.08% 1.35% In the previous question, if the U.S. bank had hedged its foreign exchange rate risk by selling one-year Swiss francs proceeds in forward foreign exchange market at 1.225 francs per dollar. What was the rate of return to the U.S. bank? 7.19% 4.25% 2.86% 1.05% -1.62% Which of the following statements is CORRECT? Savings associations have more diversified asset portfolios than commercial banks Credit unions are typically larger than commercial banks. The major assets for a commercial bank are investment securities. The major liabilities for a commercial bank are deposits. Commercial banks often have lower financial leverage than other non financial firms