The most widely used currency in the Eurobond market is the euro. True or False?

As inflation in France increases and stays the same in the U.S., the exchange rate of the euro to the dollar will increase. True or False?

The Swiss franc is selling for $.9412 and the British pound is selling for $1.5119. The cross rate between the franc and the pound (the number of Swiss francs that would buy one British pound) is approximately:

.161

1.61

.0322

3.22

Which of the following hedging strategies is not used to minimize transaction exposure?

The Eurobond market

The forward exchange market

The money market

Which of the following is NOT an example of a factor that can significantly influence exchange rates?

The cost to purchase a loaf of bread in the U.S. has increased by $.50 while the cost has remained the same in London.

The cost of capital has increased by 2% in the U.S. and has decreased by 2% in Germany.

Interest rates on short-term investments in the U.S. have decreased to 4% while interest rates in Japan are at 8%.

The U.S. has begun to export a higher level of goods to China than the prior year.