• JPY/CAD = $0.112 BRL/CAD = $0.2422 Calculate JPY/BRL

BRL 0.4621

BRL 0.0462

Cannot calculate

BRL 21.6400

• Singapore Wealth Fund purchases 5% of Citibank Stock. This is:

Foreign Direct Investment

Foreign Acquisition

Foreign Portfolio Investment

International Money market Investment

• : Canadian currency is strengthening. It may lead to:

More exports from Canada

Less imports into Canada

All of the above

More investments into Canada

• Spot rate of CAD for British Pound is CAD 1.7029. Amount of British Pounds demanded by Canadians is more than the pounds available at this price. Canadian dollar will -------------- against British Pound.

float

appreciate

stay stable

depreciate

• If you are international borrower, you would like to borrow in a currency that will

Appreciate against your home currency

widely fluctuate against your home currency

Depreciate against your home currency

None of the above

• : Imperfection of markets implies:

Labor and capital cannot flow unrestricted

adverse impact on international trade

factors of production are freely transferable

More tariffs by governments

• You have to pay 1 million Euros to a German exporter today.

TD bank quotes a rate $1.5020- 5025.

BMO quotes a rate 1.5021-5026.

RBC quotes a rate 1.5022- 5027

Whats your decision?

Accept TD Bank quote

Accept BMO Quote

Accept RBC quote

Postpone the payment

• Assume the country of Eritrea ties its currency (the Nakfa-ERN) to the dollar and the exchange rate will remain fixed. Eritrea has frequent trade with countries in the eurozone and the United States. All traded products can easily be produced by all the countries, and the

demand for these products in any country is very sensitive to the price because consumers can shift to wherever the products are relatively cheap.

Assume that the euro depreciates substantially against the dollar during the next year.

What is the likely effect (if any) of the euros exchange rate movement on the volume of Eretreas exports to the eurozone?

will decline

will increase

will remain more or less the same

Cannot be determined

• Chinese Agricultural Bank buys 1 billion USD worth of US Treasury Bonds. Interest is payable every qarter and the first payment is made in May 2021.

Interest payments are not part of BOP

US Balance of payments account is credited

US transfer payments account is debited

US BOP account is debited

• High inflation may contribute to:

Higher economic growth

Appreciation of currency

Current account deficit

Current account surplus

• : The investment arm of CIBC, a canadian bank, manages the public issue of new shares of a Mexican company and receives 5% of the total issue as Management fees. Which of the following is affected?

Transfer Payments

Capital Account

Current Account

Financial Account

• Mitsubishi, A Japanese company, issues bonds denominated in British Pounds in London. These bonds are called

Samurai bonds

Yen bonds

Euro bonds

Foreign bonds

• Exchange rates for CAD/ROUBLE for 5 consecutive months are given below. The inference is:

CAD/ROUBLE 62.4452 60.3374 59.2417 58.8643 58.4421

CAD appreciated by 6.85%

Rouble depreciated by 6.41%

Rouble appreciated by 6.85%

CAD depreciated by 6.41%