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Question
If the Hong Kong subsidiary of a U.S. firm has net exposed assets of HK$ 500,000 and the HK$ changes in value from US$0.50/HK$ toUS$0.30/HK$, the U.S. firm will have a translation ________.
a. loss HK$100,000
b. loss US$100,000
c. gain US$100,000
d. gain US$ 50,000
Answer
This answer is hidden. It contains 1 characters.
Related questions
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Risk premium equals to:a. expected premium minus forward premium.b. expected premium plus forward premium.c. forward premium minus expected premium.d. exchange rate premium plus forward premium.
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Q:
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a. Correctly valued according to PPP.
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a. The pound depreciates.
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The equivalence of the exchange rate to the ratio of price levels between two countries is referred to as the:
a. Absolute PPP
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c. Interest rate parity
d. None of the above
Q:
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If a currency has appreciated more than the price differential between two countries as implied by PPP, then a currency is overvalued.
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Q:
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a. targets a domestic inflation rate within a certain range of values.
b. attempts to influence exchange rate movements with official statements on the governments preferred rate, without taking any direct action in the financial markets.
c. coordinates monetary and fiscal policies with ones trading partners so as to achieve particular international economic outcomes.
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Q:
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a. An increase in money supply
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Considering the internal balance in an economy, which of the following could lead to lower interest rate and higher income?
a. An increase in government spending
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In foreign exchange forecasting, what is a good forecast?
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c. When the forecast is high.
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a. -13.5%
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Q:
Suppose that the 1-year forward rate of dollar per pound is $1.32, the current spot rate ($/pound) is $1.20, and the expected future spot rate ($/pound) is $1.40. The expected premium on the pound is:
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Information exposure is a type of foreign exchange risk.
Q:
Suppose for two currencies the forward premium is 4% and the expected premium is 8%. Then the risk premium is:
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Q:
A U.S. firm has a 1 million payment due to a Dutch firm in 90 days. The current spot rate is $1.00 per euro, and the 90-day forward rate is $1.11. Ben forecasts that the spot rate in 90 days will be $0.99. Jerry forecasts that the spot rate will be $1.12 in 90 days. The actual spot rate in 90 days turns out to be $1.10. Whose advice, between Ben and Jerry, will save the companys money?
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b. Jerry
c. Both Ben and Jerry
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Q:
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b. 5%
c. 6.67%
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