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Please solve those questions as soon as possible without explanation. Thanks a lot 6. Most foreign exchange transactions are through the U.S. dollar. If the
Please solve those questions as soon as possible without explanation. Thanks a lot
6. Most foreign exchange transactions are through the U.S. dollar. If the transaction is expressed as the foreign currency per dollar this is known as _____________ whereas ___________ are expressed as dollars per foreign unit.
a. European terms; indirect
b. American terms; direct
c. American terms; European terms
d. European terms; American terms
7. Assume that a call option has an exercise price of $1.70/. At a spot price of $1.62/, the call option has
a. a time value of $0.08.
b. a time value of $0.00.
c. an intrinsic value of $0.00.
d. an intrinsic value of -$0.08.
8. The beginning share price for a security over a three-year period was $100. Subsequent year-end prices were $124, $116 and $128. The arithmetic average annual rate of return and the geometric average annual rate of return for this stock was
a. 9.30% and 8.78% respectively.
b. 9.30% and 7.89% respectively.
c. 9.30% and 7.03% respectively.
d. 9.30% and 6.37% respectively.
9. Level I ADRs trade primarily
a. on the New York Stock Exchange.
b. on the American Stock Exchange.
c. over the counter market
d. Level I ADRs typically do not trade at all, but instead are privately issued and held until maturity.
10. Which of the following is an advantage to exporting goods to reach international markets rather than entering into some form of FDI?
a. fewer agency costs
b. fewer direct advantages from research and development
c. a greater risk of losing markets to copycat goods producers
d. an inability to exploit R&D as effectively as if also invested abroad
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