1. T or F: If interest rate parity and RPPP hold then more developed countries will have higher real interest rates.
2. T or F: Interest rate parity says that the country with the higher rate of interest will see its currency go up in value.
3. T or F: If your firm has an accounts receivable in yen, it is good practice to offset this by buying calls on the yen.
4. T or F: The market forward rates is ALWAYS equal to the synthetic forward rate.
5. T or F: The market forward rate ALWAYS turns out to be the future spot rate.
6. T or F: It is much more important to convert costs of equity to global costs of equity than it is to convert costs of debt to global costs of debt.
7. T or F: In international finance, marginal tax rates are preferred over effective tax rates.