QUESTION 17

The spot and 30 day forward rates for the Dutch guilder are $.3075 and $.3120, respectively. The guilder is said to be selling at a forward

		premium of 19.51%
		premium of 17.56%
		premium of 9.76%
		discount of 17.56%

5 points

QUESTION 18

A ________ involves simultaneously borrowing and lending activities in two different currencies to lock in the currency's value of a future foreign currency cash flow.

		forward contract
		currency collar
		money-market hedge
		currency option

5 points

QUESTION 19

If you fear the dollar will rise against the French franc, with a resulting adverse change in the dollar value of the equity of your French subsidiary, you can hedge by

		selling francs forward in the amount of net assets
		buying francs forward in the amount of net assets
		reducing the liabilities of the subsidiary
		selling francs forward in the amount of total assets

5 points

QUESTION 20

Under FASB 52, most financial statements must be translated using the

		monetary/nonmonetary method
		current/noncurrent method
		current rate method
		temporal method