Question 1

A German firm is attempting to determine the euro/pound exchange rate and has the following exchange rate information: USD/pound = $1.5509/ and the USD/euro rate = $1.2194/. Therefore, the euro/pound rate must be:

a)1.2719/.

b)0.7863/.

c)0.7316/.

d)1.2719/.

Question 2

Which of the following pieces of U.S. legislation was developed and passed in response to the 2008-2009 international credit crisis?Question 2

a)Dodd-Frank Wall Street Reform and Consumer Protection Act

b)Gramm-Leach-Bliley Financial Services Modernization Act

c)Depository Institutions Deregulation and Monetary Control Act

d)The Glass-Steagall Act

Question 3

Define patient and impatient capitalism and discuss how each may lead to different decision-making in the shareholder wealth maximization model.

Question 4

What is the Official Reserves Account (ORA), and why is it more important for countries under a fixed exchange rate regime than for ones under a floating exchange rate regime?