Practice Midterm Solutions Fin 410 Spring 2007 Midterm 1 Solutions

1568 words - 7 pages

Name: ________KEY____________________

Midterm I
Finance 410
International Financial Management
Spring 2007

Instructions:

1. There are 10 multiple-choice questions, each worth 3 points and 6 problems worth a total of 70 points.

2. Write your answers (IN CAPITAL LETTERS) for the multiple choice questions
on the answer sheet provided at the back of the exam.

3. You need a calculator and some writing utensil; all the formulas are provided in the back of the exam in a separate formula sheet.

4. Do not forget to write your names at the top of this page. Exams without names will not be graded.

5. GOOD LUCK!!!!!!!!


MULTIPLE CHOICE QUESTIONS:

1. ...view middle of the document...

portfolio investment; direct investment


4. The current U.S. dollar to Japanese Yen spot exchange rate is 125¥/$. If the 90-day forward exchange rate is 127¥/$, then the Yen is selling at a per annum forward __________ of ___________.

A. premium; 1.57%
B. premium; 6.30%
C. discount; 1.57%
D. discount; 6.30%


5. Which of the following would not be considered a direct investment either into or from the United States?

A. The purchase of U.S. Treasury securities
B. Ford Motor Company building an assembly plant in Mexico
C. Honda of Japan building a manufacturing plant in Alabama
D. Intel purchasing a chip manufacturing plant in Thailand




6. Which of the following statements is correct?

A. The unrestricted supply of newly minted gold, helped expand international trade under the classical gold standard.
B. Under the Bretton Woods system, each country was responsible for maintaining its exchange rate within 1 percent of the adopted par value by buying or selling foreign exchanges as necessary
C. Under the Bretton Woods system, the British pound was the only currency that was fully convertible to gold
D. Gresham’s law implies that under bimetallism, the most valuable metal would tend to circulate. Good money would drive bad money out.
E. All of the above statements are correct.




7. Covered interest arbitrage moves the market __________ equilibrium because _______________.

A. toward; purchasing a currency on the spot market and selling in the forward market narrows the difference between the two rates.
B. toward; investors are now more willing to invest in risky securities
C. away from; purchasing a currency on the spot market and selling in the forward market increases the difference between the two rates.
D. away from; demand for the stronger currency forces up interest rates on the
weaker currency




8. The $/£ bid and ask prices are $1.4484 and $1.5281, respectively. What are the corresponding £/$ bid and ask prices?

A. £0.6904/$ and £0.6544/$
B. £0.6544/$ and £0.6904/$
C. $1.52181/£ and $1.4484/£
D. Cannot be determined until a dealer posts these bid ask quotes





9. Under an international regime of fixed exchange rates, countries with a BOP ____________ should consider ________________ their currency while countries with a BOP ____________________ should consider ______________ their currency.

A. deficit, revaluing; surplus, revaluing
B. deficit, devaluing; surplus, devaluing
C. surplus, devaluing; deficit, revaluing
D. surplus, revaluing; deficit, devaluing




10. According to the International Fisher Effect, if an investor purchases a five-year U.S. bond that has an annual interest rate of 5% rather than a comparable British bond that has an annual interest rate of 6%, then the investor...

Other Papers Like Practice Midterm Solutions Fin 410 Spring 2007 Midterm 1-Solutions

CoughCough Solutions 1 Essay

1284 words - 6 pages Cough Syrup Case Solutions Year 0 1 Plant equipment $ (65,000) $ Renovation $ - Salvage $ - Depreciation Tax Shield 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 18 19 20 21 22 23 24 25

Week 1 Fin 515 Solutions Essay

1898 words - 8 pages Chapter 1 (page 19) 1. What is the most important difference between a corporation and all other organizational forms? The corporation is separate legal entity. When a corporation is formed, it is a totally separate legal entity from its investors. A corporation can sue anyone and a corporation can be sued by anyone. The liability will also be limited within the corporation and the investors have zero liability to pay from their pocket. 2

Eco550 Midterm Part 1

1024 words - 5 pages Economic profit is defined as the difference between revenue and ____. Answer Selected Answer: total economic cost Correct Answer: total economic cost . Question 2 .4 out of 4 points Correct The form of economics most relevant to managerial decision-making within the firm is: Answer Selected Answer: microeconomics Correct Answer: microeconomics . Question 3 .4 out of 4 points Correct The moral hazard in

Profesor Slokin Midterm 1 Study Guide

933 words - 4 pages REQUIRES LARGER AND LARGER DECREASES IN TANK PRODCUTIN. • Comparative advantage o Refer to handout o Practice ivy’s method! • Circular flow o Memorize! o Not orange and green one, simplified one o What do the boxes stand for? o What flows from and out of each box? • ADAM SMITH o His book, title and deets about it o Entire title! o “INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF THE NATIONS”  Main concepts • 1) Pin Factory

Solutions to Chapter 1 - Financial Accounting

1201 words - 5 pages CHAPTER 1 THE NATURE AND PURPOSE OF ACCOUNTING Problems Problem 1-1 |CHARLES COMPANY | |BALANCE SHEET AS OF DECEMBER 31, ----. | |Assets | |Liabilities and Owners’ Equity | |Cash

Midterm Info

1746 words - 7 pages to finish all questions in time. Also remember that the questions are based on the Text Book chapter topics and my Instructions but are not directly from the book (as was also true in your bi-weekly assignments). Review my Instructions on the six chapters covered in the Midterm. Besides, also review the Two Tri-Weekly assignment solutions. As you have already seen, I give the solution to the Tri-Weekly Assignments with necessary explanations and

Accounting

489 words - 2 pages Practice Midterm Solutions Page 1 1. B 2. B 3. D 4. C Page 2 1. B 2. A 3. E 4. B Page 3 Beca Company Schedule of Cost of Goods Manufactured Direct Materials: Beginning raw materials inventory $ 9,000 Add: Purchases of raw materials 124,000 Raw materials available for use

Flutter Analysis

806 words - 4 pages =moment of inertia =spring constant Page 1 [AEROELASTICITY MIDTERM PROJECT-FLUTTER ANALYSIS ] March 14, 2012 =constant of torsional spring =displacement of typical section (positive down) =rotation angle of typical section =distance from the aerodynamic center =dynamic pressure= , where =air density and =air speed = lift force= = =Aerodynamic moment and is positive nose up Similarly assume that the motion is simple

Fi504 Mid Term

859 words - 4 pages prepare a single-step and multiple step income statement and calculate certain ratios based on the numbers in the income statement. A good way to prepare for this exam in addition to reading Chapters 1 through 6 is to replay the Live Lectures and review the Illustrations and solutions for the problems listed below. Helpful Textbook Illustrations • Illustration 1-1 on page 6 • Illustration 1-2 on page 7 • Illustration 1-8 on page 15

Acct504 Midterm Exam Study Guide

1354 words - 6 pages ACCT504 Midterm Study Guide YOU MAY WANT TO PRINT THIS GUIDE. 1. The Midterm is open book and open notes. The maximum time you can spend in the exam is 2 hours and 30 minutes. If you have not clicked the Submit for Grading button by then, you will be exited from the exam automatically. In the exam environment, the Windows clipboard is disabled, so you will not be able to copy exam questions or answers to or from other applications. 2. You

Principles of Management

966 words - 4 pages PAMANTASAN NG CABUYAO Cabuyao, Laguna COLLEGE OF COMPUTER STUDIES Course Code: Course Title: Number of Units: Description: CS102a Computer Programming 1 4 units (3 hours lecture with 3 hours laboratory per week) This course introduces the students to the fundamentals of logic formulation together with their implementation in the C++ Programming language. This course should serve as a foundation for students in the Computer Science, Information

Related Essays

Fin 534 Midterm Part 1 Essay

1694 words - 7 pages Question 1 2 out of 2 points Correct Which of the following statements is CORRECT? Answer Selected Answer: It is usually easier to transfer ownership in a corporation than it is to transfer ownership in a sole proprietorship. Correct Answer: It is usually easier to transfer ownership in a corporation than it is to transfer ownership in a sole proprietorship. Question 2 2 out of 2 points Correct You recently sold 100 shares of

Ibus 410 Midterm 2 Essay

3532 words - 15 pages Country Competitiveness and Institutions: 1. What does country competitiveness mean? The extent to which a country is capable of generating more wealth than its competitors do in the world markets How is it related to but different from the comparative advantage of a country? it measures and compares the effectiveness of countries in providing firms with an environment that sustains the domestic and international competitiveness of those

Homework 1 Solutions Essay

919 words - 4 pages CHE 331 Fall 2013 OSU Chemical, Biological and Environmental Engineering Homework #1 Solutions Page 1 Solutions for CHE 331 Homework #1: Problem 1: a) Develop a mathematical model to predict the concentration of salt (C1) leaving the first tank as a function of time. Calculate the time for C1 to reach 0.01% of the initial value (0.0001Co). To simplify the problem, we will make the following assumptions: • • • Constant volume

Ch. 1 Solutions Fi504 Essay

3571 words - 15 pages ’ Equity | $838,247,000 | | $185,762,000* | | $652,485,000 | *$56,066,000 + $129,696,000 SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 1-1 (a) P Shared control, tax advantages, increased skills and resources. (b) SP Simple to set up and maintains control with founder. (c) C Easier to transfer ownership and raise funds, no personal liability. BRIEF EXERCISE 1-2 (a) 4 Investors in common