Luyện tập hành vi khách hàng

1. According to your text, ____ is a country that has been perceived as one of the most
attractive sources of new demand

a. Australia
b. India
c. Vietnam
d. China
2. A banker's acceptance is a draft drawn on and accepted by a(n) ____.
a. importer
b. none of the above
c. bank
d. exporter

3. The "J curve" effect describes

a. the tendency for exporters to initially reduce the price of goods when their own currency
appreciates.
b. the short-run tendency for a country's balance of trade to deteriorate even while its currency is
depreciating.
c. the continuous long-term inverse relationship between a country's current account balance
and the country's growth in gross national product.
d. the reaction of a country's currency to initially depreciate after the country's inflation rate
declines.
4. Mr. Nghia purchase a put option that was written on £100,000. The strike price is $1.50 =
£1.00 and the option premium is $0.02 per British Pound. What is the theoretical maximum
gain on this position in USD?
a. $148,000 correct 100%
b. $2,000
c. $80,000
d. There is unlimited upside potential.
Cách giải:

Thuộc Put option - buyer (người mua)
Spot = S
Strike = X
Phí= C
=> Lớn nhất khi -S+X-C>=0
-S+1.5-0.02 >=0
-S+1.48>=0
S<=1.48
Suy ra: Để đạt được tối đa khi 1,48*100000=$148000
5. ____ are most commonly classified as a direct foreign investment( trừ xuất khẩu vs licensing)
a. Licensing agreements
b. Purchases of international stocks
c. Exporting transactions
d. Foreign acquisitions
6. The higher a project's beta, the ____ is the project's ____ risk?
a. higher; systematic
b. higher; unsystematic
c. lower; systematic
d. lower; unsystematic


7. Which of the following theories identifies the non-transferability of resources as a reason for
international business. sản xuất ko chuyển giao trong thị trường ko hoàn hảo

a. none of the above
b. imperfect markets theory
c. product cycle theory
d. theory of comparative advantage
8. The impact of blocked funds on the net present value of a foreign project will be smaller if
interest rates are ____ in the host country and there are ____ investment opportunities in the

host country
a. very low; limited ( greater)
b. very high; limited
c. very high; numerous
d. very low; numerous

9. Which of the following statements regarding currency futures contracts and
forward contracts is NOT true

a. Futures contracts trade on organized exchanges whereas forwards take place between
individuals and banks with other banks via telecom linkages.
b. A futures contract is for a fixed maturity whereas the forward contract is for any maturity you
like up to one year.
c. A futures contract is a standardized amount per currency whereas the forward contract is for
any size desired.
d. All of the above are true.
10. Based on the text, it should be obvious that markets are not ____ in reality, and consequently,
monopolistic advantages ____ be exploited
a. imperfect; cannot
b. perfect; cannot
c. perfect; may possibly
d. imperfect; may possibly

11. A U.S.-based MNC has just established a subsidiary in Algeria. Shortly after the
plant was built, the MNC determined that its exchange rate forecasts, which had
previously indicated a slight appreciation in the Algerian dinar, were probably
false. Instead of a slight appreciation, the MNC now expects that the dinar will
depreciate substantially due to political turmoil in Algeria. This new development
would likely cause the MNC to ____ its estimate of the previously computed net
present value

a. increase
b. None of above is correct
c. increase, but not necessarily if the MNC reduces its investment in by an offsetting amount
d. lower, but not necessarily if the MNC invests enough in to offset the decrease in NPV
12. What is the key component of the current account?
a. balance of trade.
b. balance of money market flows.
c. balance of capital market flows.
d. unilateral transfers.
13. According to the textbook, what is the name of "central bank of central banks"?
a. World Trade Organization
b. International Development Association (IDA)


c. Bank for International Settlements (BIS)
d. International Financial Corporation (IFC)
14. Which of the following LC is not a trade-related LC?
a. revocable
b. import/export
c. all of the above are trade-related letters of credit
d. irrevocable
15. the cost of capital in Vietnam countries is likely to be ____ than that of the UK. and ____ than
that of Canada

nước kém phát triển khả năng sử dụng vốn cao hơn các nước phát
triển)
a. lower; higher
b. higher; lower
c. higher; higher

d. lower; lower
16. Which of the following does not constitute a form of direct foreign investment?
a. Franchising
b. Establishment of new foreign subsidiaries
c. International trade
d. Joint ventures
17. The U.S. treasury bonds yields currently 5%. The expected return of S&P 500 index is 13%.
Marvel, Inc. is considering a project that has a beta of 2. What is the required rate of return on
Marvel stock in percentage? (Write down the number only, round up to 0 decimal number)
5% +2*(13%-5%) = 21% (re = rf + B(rm-rf))

18. The U.S. treasury bonds yields currently 3%. The expected return of S&P 500 index
is 10%. Ford, Inc. is considering a project that has a beta of 1.2. What is the cost of
dollar-denominated equity in percentage? (Write down the number only, round up to
1 decimal number)
3% + 1.2*(10%-3%) = 11.4% giống câu 17
19. The ____ a project's variability in cash flows, and the ____ the positive correlation between
the project's cash flow and the MNC's cash flow, the higher the risk of the project?

a. higher; lower
b. lower; lower
c. higher; higher
d. lower; higher
20. Assume a Dell Inc. initiates direct foreign investment in Indonesia. If the parent's government
imposes a ____ tax rate on funds remitted from a foreign subsidiary, a project is less likely to
be feasible from the ____ point of view

a. low; parent's
b. None of above is correct (high; parent’s)
c. high; subsidiary's

d. low; subsidiary’s
21. Ms. Ngoc Anh opens a short futures position. The contract size is €62,500, the
maturity is six months, and the initial price is $1.50 = €1. The next day, the settlement


price is $1.60 = €1. What is the amount of her gain or loss in USD. (write + before the
number for gain, - before the number for loss, round up to 0 decimal numbers)
Gía ban đầu chấp nhận là $1.5, nhưng ngày tiếp theo thì giá tăng lên là $1.6. Nên Bà
Ngọc Anh bị lỗ $0.1 => Lỗ 0.1*62500= -6250
22. You bought a put option on euros with a strike price of $1.70/£. The option premium
is 0.02 USD per unit. Which spot price make you break-even(điểm hòa vốn) if you
choose to exercise the option before maturity? (write number only, round up to 2
decimal numbers) -c+k-st . c=0.02. st=1.7. k=? .
Strike price-Spot price-Premium=0
=> Spot price=Strike price - Premium = 1,7-0,02 = 1,68
23. Which of the following industries would most likely take advantage of lower costs in
some less developed foreign countries
a. assembly line production
b. specialized professional services
c. nuclear missile planning
d. planning for more sophisticated computer technology
24. What is a name of a foreign currency contract that calls for the future delivery of a
standard amount of foreign exchange at a predetermined time, place, and price?
a. forward
b. swap
c. option
d. futures
Đề của thầy khoa

Due to the risks involved in international business, firms should. none of

above
With regard to corporate goals, an MNC is mostly concerned with maximizing
____, and a purely domestic firm is mostly concerned with maximizing ____.
Shareholder wealth. Shareholder wealth
For the MNC, agency costs are typically. Lager than agency cost of a small
purely domestic firm
The valuation of an MNC should rise when an event causes the expected
cash flows from foreign to ____ and when foreign currencies denominating
these cash flows are expected to ____. increase; appreciate


An increase in the current account deficit will place ____ pressure on the
home currency value, other things equal. Downward
The World Bank was established to___. Enhance economic development
through non-subsidized loans (at market interest rates.)
The International Development Association was established to_____.
Enhance economic development through low-interest rate loans (belowmarket rates)
Which of the following is not mentioned in the text as an additional risk
resulting from international business. interest risk
Assume that a bank's bid rate on Swiss francs is 0.45 and its ask rate is 0.45an
ditsask rate is 0.47. Its bid-ask percentage spread is. None of above
The bid/ask spread for small retail transactions is commonly in the range of
____ percent? all of above
...Which of the following statement is incorrect regarding to spot market
liquidity? if a currency is illiquid, an MNC is typically able to quickly purchase
that currency at a resonable exchange rate
Which of the following is not the main objective of the international money
market? all of above
What is main purpose of calculating the bid-ask spread on an exchange rate?
the bid - ask spread determines the transaction cost of foreign exchange.

Assume that $1 is equal to .85 British Pound and 98 yen. What is the value of
British Pound in Yen.
a. 0.0087


b. 121.23
c. None of above
d. 111.49
You observe a quotation of the Swiss Franc of 0.007. You are, however,
interested in the number of Swiss Franc per dollar. Thus, you calculate the
____ quotation of ____ Swiss Franc /
a.
b.
c.
d.

direct; 124.86
direct; 150
indirect;150
indirect; 142.86

An MNC's medium debt financing decisions are satisfied in the ____ market,
while its short-term financing decisions are satisfied in the ____ market?
international credit; international money
The owners of a multinational firm are the. Shareholders
The world's largest foreign exchange trading center is. london
What is the spot market? involves the almost - immediate purchase or sale of
foreign exchange.
Suppose that the current exchange rate is €0.80 = $1.00. The direct quote,
from the U.S. perspective is. €1.00=$1.25

The Bid price. is the price that a bank stands ready to pay
Suppose a bank customer with €1,000,000 wishes buy Japanese yen. The
dollar-euro exchange rate is quoted as $1.60 = €1.00 and the dollar-yen
exchange rate is quoted at $1.00 = ¥120. How many yen will the customer get


a.
b.
c.
d.

¥5,208,333
¥5,208.33
¥192,000,000
¥75,000,000

The largest and most active financial market in the world is. the fx market
What is the definition of a call option? The correct answer is gives the holder
the right, but not the obligation, to buy the underlying asset for a stated price
over a stated time period.
If we have 2 put options that have the same maturity and premium, the more
valuable one will have a. higher strike price
a.
b.
c.
d.

None of above
Larger St
Lower strike price

larger R$

Which of the following does the most to reduce default risk for futures
contracts? The correct answer is Marking to market.
A put option has a strike price of $15. The price of the underlying stock is
currently $22. The put is
a.
b.
c.
d.

in the money
near the money
at the money
None of above

Who has the right to sell an asset at a “lock-in” price. The correct answer is A
buyer of a put option


Who has an obligation to sell an asset at a “lock-in” price? The correct answer
is A seller of a put option
Which of the following strategies will be profitable if the price of the underlying
asset is expected to decrease? The correct answer is Buying a put & selling a
call
A _________ option is said to be in the money when the market price of the
underlying security _______ the exercise price? The correct answer is call;
exceeds
The ________ the existing market price of the underlying financial instrument
relative to the strike price, the ______ the call option premium. Your answer is

correct! higher; higher
A foreign currency ________ option gives the holder the right to ________ a
foreign currency whereas a foreign currency ________ option gives the holder
the right to ________ an option. Your answer is correct! call, buy, put, sell
The price at which an option can be exercised is called the ________. Your
answer is correct! strike price
The maximum gain for the purchaser of a call option contract is ________
while the maximum loss is ________. The correct answer is unlimited; the
premium paid
Which of the following is NOT true for the writer of a call option? The correct
answer is The maximum gain is unlimited.
You have to pay a loan denominated in SGD due in 6 months. To protect
yourself against unexpected changes in the VND/SGD exchange rate you
should? Your answer is correct! buy a SGD call option.


Which of the following is NOT a factor in determining the premium price of a
currency option?
a.
b.
c.
d.

all of the above are factors in determining the premium price.
the time to maturity
the standard deviation of the daily spot price movement
the present spot rate

The FDI flows from U.S. firms to other countries have generally ….. over time; the FDI flows from
other countries into the U.S. by non-U.S. firms have generally ….. over time

a. increased; decreased
b. decreased; increased
c. decreased; decreased
d. increased; increased

The U.S. treasury bonds yields currently 3%. The expected return of S&P 500
index is 10%. Ford, Inc. is considering a project that has a beta of 1.2. What is
the cost of dollar-denominated equity in percentage? (Write down the number
only, round up to 1 decimal number)
CAPM: rf + B*(rm - rf) = 3% + 1.2*(10% - 3%) = 11.4
The higher a project's beta, the ____ is the project's ____ risk?
a. higher; unsystematic
b. higher; systematic
c. lower; unsystematic
d. lower; systematic
If we have 2 put options that have the same maturity and premium, the more valuable one will have a

a. lower strike price.


b. higher strike price.
c. larger R$.
d. larger St.

Consider a PUT option written on €100,000. The strike price is C$1.68 = €1.00
and the option premium is C$0.01. At what exchange rate will the buyer of this
put option break even? (round up to 2 decimal numbers, write number only)
-C + K - St = -0.01 + 1.68 - St = 0
=> St = 1.67

You bought a put option on euros with a strike price of $1.70/£. The option
premium is 0.02 USD per unit. Which spot price make you break-even if you
choose to exercise the option before maturity? (write number only, round up to
2 decimal numbers)
-C + K - St = -0.02 + 1.7 - St = 0
=> St = 1.68
____ are most commonly classified as a direct foreign investment

a. Licensing agreements
b. Foreign acquisitions
c. Exporting transactions
d. Purchases of international stocks

Ms. Xuan buys an European call option on euro. The contract size is £62,500,
the maturity is six months, and the strike price is $1.50 = £1. At maturity, the
settlement price is $1.60 = £1. What is the amount her gain or loss in USD.
(write + before the number for gain, - before the number for loss, round up to 0
decimal numbers).
Lỗ 0.1$ mà giá hợp đồng 62,500 => Đổi 62500*1.6 = 100,000$


Lỗ giá hợp đồng 100,000*0.1 = -10,000$
When a firm perceives that a foreign currency is ____, the firm may not attempt direct
foreign investment in that country, as the initial outlay should be relatively ____?
a. undervalued; low
b. overvalued; high
c. undervalued; high
d. overvalued; low
Consider Firm A and Firm B that both produce the same product. Firm A would be less likely to have
more stable cash flows if its percentage of foreign sales were ____ and the number of foreign

countries it sold products to was ____?

a. higher; large
b. lower; small
c. higher; small
d. higher; large
Which of the following is not a payment method used for international trade?

a. open account.
b. consignment.
c. factoring.
d. draft.
Which of the following scenarios may boost the demand for U.S. exports

a. none of the above.
b. economic growth in foreign countries decreases.
c. the currencies of foreign countries strengthen against the dollar.
d. U.S. inflation rises.
The commonly accepted goal of the MNC is to:

A. minimize risk
B. maximize shareholder wealth
C. maximize international sales
D. A and C are correct
E. maximize short-term earnings
What is (are) likely the key source of funds to support a particular project

a. liquidation value
b. initial investment
c. variable costs

d. fixed costs
A speculator that has ________ a futures contract has taken a ________ position?

a. purchased; sold


b. purchased; short
c. sold; long
d. sold; short
If countries are highly influential upon each other, the correlations of their economic growth levels
would likely be ____. A firm would benefit ____ by diversifying sales among these countries relative to
another set of countries that were not influential upon each other?

a. close to zero; more
b. high and positive; more
c. close to zero; less
d. high and positive; less

Consider a PUT option written on €100,000. The strike price is C$1.45 = €1.00
and the option premium is C$0.02. What is spot exchange rate that make you
break-even? (write number only)
-C + K - St = -0.02 + 1.45 - St = 0
=> St = 1.43
Assume that Vinaphone Corporation is considering the establishment of a
subsidiary in Thailand. The initial investment required by the parent is
$5,000,000. If the project is undertaken, Vinaphone would terminate the
project after four years. Vinaphone's cost of capital is 13%, and the project in
New Zealand has the same risk as Vinaphone's existing projects. All cash
flows generated from the project will be remitted to Vinaphone at the end of
each year. The project expects to generate 10 million Baht in year 1, 15 million

Baht in year 2, 17 million Baht in year 3 and 20 million Baht in the final year.
The current exchange rate of the Thai Baht is $.135. Vinaphone forecasts that
the value of Baht in year 1 is $0.13, year 2 is $0.14, year 3 is $0.12 and year 4
is $0.15. What is the net present value of the this project. (don’t write currency
symbol, round up to ZERO decimal numbers)
Year
Cash flow

0

1

-5tr$

10tr

2
15tr

3
17tr

4
20tr


Exchage rate

0.135

0.13

0.14

0.12

0.15

NPV = -5tr + 10tr/[(1+13%)*0.13] + 15tr/[(1+13%)*0.14 + 17tr/[(1+13%)*0.12]
+ 20tr/[(1+13%)*0.15] = 1,048,829 $
Which of the following is not a way in which agency problems can be reduced through corporate
control?

a. Require frequent reports
b. Enhance monitoring activities
c. acquisition of a foreign subsidiary.
d. Incentive stocks and bonus
The agency costs of an MNC are likely to be lower if it

a. uses a centralized management style
b. scatters its subsidiaries across many foreign countries.
c. uses a decentralized management style
d. increases its volume of international business.
Which of the following is not a characteristic of a country to be considered within an MNC's
international tax assessment

a. provisions for carrybacks and carryforwards.
b. withholding taxes.
c. All of above are correct
d. personal income taxes.

What is the main objective of a General Agreement on Tariffs and Trade (GATT)?

a. increased trade restrictions outside of North America.
b. uniform environmental standards around the world.
c. lower trade restrictions around the world.
d. uniform worker health laws.
Consider an importer that issues a promissory note to pay for the imported catfishes over a period of
five years. The notes are extended to the exporter, Garfish Corporation, who sells them at a discount
to Vietcombank .What is the name of this trade finance service?

a. a letter of credit.
b. factoring.
c. accounts receivable financing.
d. forfaiting.
The ____ an MNC, the ____ its cost of capital is less likely to be

a. larger; higher
b. smaller; lower
c. smaller, higher
d. larger; lower


In general, a firm ____ exposed to exchange rate fluctuations will usually have a ____ distribution of
possible cash flows in future periods

a. less; wider
b. none of the above
c. more; narrower
d. more; wider
Consider Agrifish Corporation sell its accounts receivables off to OCB that becomes responsible for

obtaining cash from the various importers. What is the name of this trade finance service?

a. accounts receivable financing.
b. factoring.
c. a letter of credit.
d. consignment.
Who has an obligation to sell an asset at a “lock-in” price?

a. A buyer of a put option
b. A seller of a call option
c. A buyer of a call option
d. A seller of a put option

Coca-Cola Co., a U.S.-based MNC that is considering obtaining funding for a
project in Malaysia. U.S. government bonds yields 4%, Malaysian risk-free
rate = 5%. Risk premium on dollar-denominated debt provided by U.S.
creditors = 3%, Risk premium on Malaysian dollars-denominated debt
provided by Malaysian creditors = 4%, Beta of project = 1.2. The return of
S&P500 is 10%. U.S. corporate tax rate = 30%. Malaysian corporate tax rate
= 40%. What is Coca-Cola’s cost of dollar-denominated debt in percentage?
(write down the number only, round up to 1 decimal number)

Which of the following does not constitute a form of direct foreign investment?

a. Establishment of new foreign subsidiaries
b. Franchising
c. International trade
d. Joint ventures
Which of the following is a false statement regarding a banker's acceptance?

a. None of above is correct
b. It can be beneficial to the exporter, as he does not have to worry about the credit risk of the
importer.


c. It can be beneficial to the bank accepting the draft in that it earns a commission for creating an
acceptance.
d. It can be beneficial to the importer, as he may have greater access to foreign markets when
purchasing supplies.

An international project's NPV is ____ related to consumer demand and ____ related to the project's
salvage value

a. negatively; negatively
b. negatively; positively
c. positively; positively
d. positively; negatively

The North American Free Trade Agreement (NAFTA) increased more restrictions on:

a. none of the above.
b. trade between Canada and the U.S.
c. direct foreign investment in Mexico by U.S. firms.
d. trade between Canada and Mexico.
With regard to corporate goals, an MNC is mostly concerned with maximizing ____, and a purely
domestic firm is mostly concerned with maximizing ____

a. short-term earnings; sales volume
b. shareholder wealth; short-term earnings
c. shareholder wealth; shareholder wealth

d. short-term earnings; shareholder wealth
The least risky method by which firms conduct international business is

a. International Trade
b. Franchising
c. The establishment of new subsidiaries
d. The acquisitions of existing operations

Everything else being equal, the ____ the depreciation expense is in a given year, the
____ a foreign project's NPV will be
a. none of the above
b. higher; lower
c. higher; higher
d. lower; higher

The maximum gain for the purchaser of a call option contract is ________ while the
maximum loss is ________.
a. unlimited; the value of the underlying asset
b. unlimited; the premium paid
c. unlimited; unlimited
d. the premium paid; unlimited


Assume that the government of Venezuela requires bribes to approve certain projects. MNCs that
attempt to do business in Venezuela must deal with?

a. regulatory barriers.
b. ethical differences.
c. "red tape" barriers.
d. protective barriers.

When economic conditions of two countries are ____, then a firm would ____ its risk by operating in
both countries instead of concentrating just in one

a. not highly correlated; reduce
b. highly correlated; reduce
c. not highly correlated; not reduce
d. none of the above
Assume that the risk-free interest rate in the U.S. is the same as that in China. Assume that the
government of China is less likely to rescue local firms that experience financial problems. Other
things being equal, China's firms are likely to use a ____ degree of financial leverage than U.S. firms.
If a firm based in China had the same degree of financial leverage and the same operating
characteristics as a U.S. firm, its cost of capital would be ____ than that of the U.S. firm

a. higher; higher
b. lower; lower
c. lower; higher
d. higher; lower
A put option with a strike price of $35 can be bought for $2. What will be your net profit in USD if you
buy the put and the stock price is $22 when the put expires? (write number only)

Answer:
The discrepancy between the feasibility of a project in a host country from the perspective of the U.S.
parent versus the subsidiary administering the project is likely to be smaller for projects in countries
where?

a. none of the above; a discrepancy is not possible.
b. the taxes are the same as in the
c. the currency of the host country is expected to increase consistently.
d. there are no blocked fund restrictions.
According to the "J curve effect," a weakening of the U.S. dollar relative to its trading partners'

currencies would result in an initial ____ in the current account balance, followed by a subsequent
____ in the current account balance.

a. decrease; decrease
b. decrease; increase
c. increase; decrease
d. increase; increase


An MNC may be more exposed to agency problems if most of its shares are held by

a. a widely dispersed set of individual investors
b. all of the above would prevent agency problems
c. a few pension funds
d. a few mutual funds
In comparing exporting to direct foreign investment (DFI), an exporting operation will likely incur ____
fixed production costs and ____ transportation costs than DFI

a. lower; higher
b. lower; lower
c. higher; lower
d. higher; higher
Why reducing home country currency would not be an ideal strategy to correct a balance of trade
deficit?

a. it prevents international trade transactions from being prearranged.
b. foreign companies may reduce the prices of their products to stay competitive.
c. it reduces the prices of imports paid by local companies.
d. it increases the prices of exports by local companies.
Which of the following strategies will be profitable if the price of the underlying asset is expected to

decrease?

a. Buying a call & buying a put
b. Selling a put & buying a call
c. Buying a put & selling a call
d. Selling a call & selling a put
A speculator in the futures market wishing to lock in a price at which they could ________ a foreign
currency will ________ a futures contract

a. buy; sell
b. buy; buy
c. none of the above
d. sell; buy

The ____ the correlation in project returns is over time, the ____ will be the project
portfolio risk as measured by the portfolio variance
a. higher; lower
b. lower; higher
c. none of the above (lower;lower)
d. Higher; higher
What will happen to US balance of payment if it limits volume of imported products from other
countries?

a. reduce the country's current account balance, if other governments do not retaliate.
b. increase the country's current account balance, if other governments do not retaliate.
c. have no impact on the country's current account balance unless other governments retaliate.


d. increase the volume of a country's trade with other countries.
Which of the following industries would most likely take advantage of lower costs in some less

developed foreign countries
a. assembly line production
b. planning for more sophisticated computer technology
c. nuclear missile planning
d. specialized professional services




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The Basel II accord is focused on eliminating inconsistencies in ____ across countries
a. capital requirements
b. deposit insurance
c. deposit rates
d. bank failure policies
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You bought a put option on euros with a strike price of $1.70/£. The option premium is 0.02 USD per unit.
Which spot price make you break-even if you choose to exercise the option before maturity? (write

number only, round up to 2 decimal numbers)
Answer:
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What is main purpose of calculating the bid-ask spread on an exchange rate?
a. The bid-ask spread determines the currency option premium.
b. The bid-ask spread determines the forward premium.
c. The bid-ask spread determines how an exchange rate will change.


d. The bid-ask spread determines the transaction cost of foreign exchange.
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Who has an obligation to sell an asset at a “lock-in” price?
a. A seller of a put option
b. A buyer of a put option
c. A buyer of a call option
d. A seller of a call option
Question 5
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Assume that $1 is equal to .85 British Pound and 98 yen. What is the value of yen in British Pound?
(please round up to 4 decimal numbers)
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Who has the right to sell an asset at a “lock-in” price
a. A buyer of a put option
b. A seller of a call option
c. A seller of a put option


d. A buyer of a call option
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Which currency is used the most to denominate Eurobonds?

a. the Japanese yen.
b. the British pound.
c. the Vietnam Dong.
d. the U.S. dollar.
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Which of the following is NOT a factor in determining the premium price of a currency
option?
a. the time to maturity
b. the present spot rate
c. the standard deviation of the daily spot price movement
d. all of the above are factors in determining the premium price.
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Consider a PUT option written on €100,000. The strike price is C$1.45 = €1.00 and the option premium is
C$0.02. What is the theoretical maximum gain on this position? (write number only)
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You bought a call option on TWD with a strike price of TWD35.00/$. The option premium is 2 TWD per
unit. Which spot price make you break-even if you choose to exercise the option before maturity? (write
number only)
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Ms. Ngoc Anh opens a short futures position. The contract size is €62,500, the maturity is six months,
and the initial price is $1.50 = €1. The next day, the settlement price is $1.60 = €1. What is the amount of
her gain or loss in USD. (write + before the number for gain, - before the number for loss, round up to 0
decimal numbers)
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A quotation representing the number of units of a foreign currency per dollar is referred to as a(n) ____
quotation. On the other hand, a quotation representing the value of a foreign currency in dollars is
referred to as a(n) ____ quotation;.
a. direct; indirect
b. indirect; indirect
c. indirect; direct
d. direct; direct
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According to the textbook, what is the average daily foreign exchange trading globally?
a. None of above
b. equals about $500 billion
c. equals about $700 billion
d. equals about $300 billion
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Which of the following is an incorrect bid/ask quotation for the Taiwan dollar?

a. $.350/$.351
b. $.349/$.350
c. $.351/$.353
d. $.653/$.651
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