国际财务管理试题.docx

国际财务管理试题.docx

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国际财务管理试题

Chapter1

1.Ifacountryunexpectedlyimposesrestrictionsonimports,thistradebarrierisanexampleof:

A）ExchangeRateRisk

B）PoliticalRisk

C）MarketImperfections

D）ExpandedOpportunitySet.

2.Adomesticfirmthatproducesandsellsitsproductsinonecountry

A）Isprotectedfromforeignexchangerisk

B）Couldfaceforeignexchangerisk

C）Couldfacenopoliticalrisk

D）Isanexampleofamarketimperfection.

3.TheEuropeanCentralBankislocatedin

A）Düsseldorf,Germany

B）Frankfurt,Germany

C）London,England

D）Paris,France.

4.TheNorthAmericanFreeTradeAgreement（NAFTA）

A）HasresultedinmassiveunemploymentintheU.S.asjobswenttoMexico

B）Callsfortheintroductionofaregionalcurrencyby2015,similartotheeuro

C）IsanagreementamongtheUnitedStates,Canada,andMexico,thatcallsforthephasingoutoftariffsandimportquotasovera15-yearperiod

D）Callsfortheprivatizationofallindustriesovera15-yearperiod.

5.AU.S.investorwhoisinterestedinthesharesofNokiaCorporationofFinland

A）ShouldprobablystickwithU.S.companies

B）Willhaveaneasiertimethaneverinvestigatingthecompany,duetothereadyflowofinformationovertheInternetandtheglobalizationofcapitalmarkets

C）MusttraveltoFinlandinpersontobuytheshares

D）CanbuythesharesbutcannotbringthemtotheU.S.legally.

Chapter2

1.Gresham’sLawstatesthat:

A）ExchangeRatesbetweencurrenciesmustequaltheratioofthepriceofgoldinthetwocountries

B）Goodmoneydrivesbadmoneyoutofcirculation

C）Badmoneydrivesgoodmoneyoutofcirculation

D）ThePrice-SpecieFlowmechanismwillautomaticallyadjustexchangeratestotheircorrectlevel.

2.Thekeyargumentsinfavorofflexibleexchangeratesreston

A）Easierexternaladjustments

B）NationalPolicyautonomy

C）a）andb）arecorrect

D）Noneoftheabove.

3.Supposethatthepoundispeggedtogoldat£20perounceandthedollarispeggedtogoldat$35perounce.Thisimpliesanexchangerateof$1.75perpound.Ifthecurrentmarketexchangerateis$1.80perpound,howwouldyoutakeadvantageofthissituation?

A）Startwith$350.Buy10ouncesofgoldwithdollarsat$35perounce.Convertthegoldto£200at£20perounce.Exchangethe£200fordollarsatthecurrentrateof$1.80perpoundtoget$360

B）Startwith£350.Buy17.5ouncesofgoldat£20perounce.Convertthegoldtodollarsat$35perounce.Exchangethedollarsforpoundsatthecurrentmarketexchangerateis$1.80perpound

C）Bothoftheabovearecorrect

D）Noneoftheabovearecorrect

4.Oneadvantageofmonetaryunion

A）Lossofnationalmonetaryandexchangeratepoliticalindependence

B）Transitionofasymmetricmacro-economicshocks

C）Reducedtransactionscostsandtheeliminationofexchange-rateuncertainty

D）Enhancedcontrolofinterestratesinthemembercountries

5.ThedominantworldcurrencysincetheendofWorldWarIhasbeen

A）TheU.S.dollar

B）TheCanadiandollar

C）TheBritishpound

D）Theeuro

Chapter3

1.Inapureflexibleexchangerateregime,acountry’scentralbankswillnotneedtomaintainofficialreserves.Underthisregime:

A）–BCA=BKA

B）BCA=–BRA=0

C）BKA=–BRA

D）Noneofthem

2.Inbalance-of-paymentsaccounting,acountry’sinternationaltransactionscanbegroupedinthreemaincategories:

A）Thecurrentaccount,thecapitalaccountandthefederalreservesaccount

B）Thegovernmentspendingaccount,thecapitalaccountandtheofficialreservesaccount

C）Thecurrentaccount,thecapitalaccountandtheofficialreservesaccount

D）Thecurrentaccount,thecapitalaccountandthestatisticdiscrepancy

3.IftheUnitedStatesimportsmorethanitexports,onecanexpect:

A）TheU.S.dollarwouldbelikelytoappreciateagainstothercurrencies

B）Thesupplyofdollarsislikelytoexceedthedemandintheforeignexchangemarket,ceterisparibus

C）TheU.S.dollarwouldbeunderpressuretodepreciateagainstothercurrencies

D）b）andc）arecorrect.

4.SupposethatyourU.S.firmimportsbicyclesfromMercianBicyclesinDerby,England.

A）ThetransactionwillgiverisetoadebitintheU.S.balance-of-payments

B）ThetransactionwillgiverisetoacreditintheU.S.balance-of-payments

C）Sincethevalueofthebicycleswillequalthevalueofthedollarssentabroad,thiswillgiverisetoaneitheradebitnoracreditintheU.S.balance-of-payments

D）Itdepends

5.Theworld’slargestdebtornationandcreditornation,respectivelyare:

A）JapanandtheU.S

B）TheU.S.andJapan

C）TheU.S.andCanada

D）GreatBritainandMexico

IIPROBLEM

SomeitemsoftheU.S.balanceofpaymentsfor2000（in$billion）areasfollows:

Exports:

Merchandise774.86（Credit）

Services290.88（Credit）

Factorincome352.90（Credit）

Imports:

1809.18（Debit）

Services217.07（Debit）

Factorincome367.68（Debit）

UnilateralTransfer54.15（Debit）

BalanceonCapitalAccount:

444.26（Credit）

StatisticDiscrepancy0.13（Debit）

PleasecomputetheitemsofExports,ImportofMerchandise,BalanceonCurrentAccount,anditsOfficialReserveAccount.

Chapter4

1.Whenacorporationhaslargeshareholdersincontrol

A）Thereisthepossibilitythatthelargeshareholderscontrolthemanagersandincentivisethemtoexpropriatewealthfromsmalloutsideshareholders

B）Therearenoagencycosts

C）Theshareholdersareusuallyobese

D）Alloftheabovemaybecorrect

2.Manycompanieshaveprovidedmanagerswithexecutivestockoptions

A）Theseareaformofincentivecontracts

B）Thesecanserveasamechanismofaligningtheinterestsofshareholdersandmanagers

C）Theseoptionscanoffermanagersanincentivetorunthecompanyinsuchaswaythatenhancesshareholderwealthaswellastheirown

D）Alloftheabove

3.Thegreatestadvantageofthecorporateformofbusinessorganization

A）Itisanefficientrisksharingmechanismthatallowscorporationstoraiselargeamountsofcapital

B）Isthepotentialforabuseofpowerthatresidesinthechiefexecutivesoffice

C）Isthebenefit（togovernments）ofdoubletaxation

D）Noneoftheabove

4.IntheUnitedStates,shareholderselect

A）Theboardofdirectors

B）ThePresidentShareholder

C）Themanagementofthefirm

D）Noneoftheabove

5.SupposeaU.S.companycontinuallyperformspoorlyandallofitsinternalgovernancemechanismfailtocorrecttheproblem.

A）Overtimethissituationmaypromptanoutsider（corporateraider）tomountatakeoverbid

B）Ahostiletakeoverbidcanserveasadrasticgovernancemechanismofthelastresort.

C）Themarketforcorporatecontrolmaydisciplinemanagers

D）Alloftheabove

Chapter5

1.MultipleChoiceQuiz

（1）Supposeyouobservethefollowingexchangerates:

€1=$1.25;£1=$2.00.Whatmusttheeuro-poundexchangeratebe?

A€1=£1.60B€1=£0.625C€2.50=£1D€1=£2.50

（2）

Intheforwardmarket,

A）Marketparticipantsagreetobuyorsellforeigncurrencyinthefutureatpricesagreed-upontoday.

B）Marketparticipantsagreetobuy（notsell）foreigncurrenciesinthefutureatpricesagreed-upontoday.

C）Marketparticipantspaytodayforaspecificamountofforeigncurrencytobereceivedinthefuture.

D）Marketparticipantsagreetobuyandsellfixedamountsofforeigncurrencyatspotpricesthatwillprevailinthefuture.

（3）AnexchangeratequotedinAmericanterms

A）SayshowmanyunitsofforeigncurrencyyougetforoneU.S.dollar.

B）SayshowmanyU.S.dollarsoneunitofforeigncurrencyisworth.

C）Isthesameastheindirectquotation.

D）Istheinverseofthedirectquotation.

（4）Supposeyouobservethefollowingexchangerates:

€1=$.85;£1=$1.60;and€2.00=£1.00.Startingwith$1,000,000,howcanyoumakemoney?

A）Exchange$1mfor£625,000at£1=$1.60.Buy€1,250,000at€2=£1.00;tradefor$1,062,500at€1=$.85.

B）Startwithdollars,exchangeforeurosat€1=$.85;exchangeforpoundsat€2.00=£1.00;exchangefordollarsat£1=$1.60.

C）Startwitheuros;exchangeforpounds;exchangefordollars;exchangeforeuros.

（5）

Consideratraderwhotakesalongpositioninasix-monthforwardcontractonBritishpounds.Theforwardrateis$1.75=£1.00;thecontractsizeis£62,500.Atthematurityofthecontractthespotexchangerateis$1.65=£1.00

A）Thetraderhaslost$625.

B）Thetraderhaslost$6,250.

C）Thetraderhasmade$6,250.

D）Thetraderhaslost$66,287.88

2．Calculationandanalysis

（1）Thecurrentspotexchangerateis$1.95/£andthethree-monthforwardrateis$1.90/£.Basedonyouranalysisoftheexchangerate,youareprettyconfidentthatthespotexchangeratewillbe$1.92/£inthreemonths.Assumethatyouwouldliketobuyorsell£1,000,000.

a.Whatactionsdoyouneedtotaketospeculateintheforwardmarket?

Whatistheexpecteddollarprofitfromspeculation?

b.Whatwouldbeyourspeculativeprofitindollartermsifthespotexchangerateactuallyturnsouttobe$1.86/£.

Chapter6

1.MultipleChoiceQuiz

（1）SupposeinterestratesintheU.S.are5%whenthespotexchangerateis$0.75=€1andtheinterestrateinFranceis8%peryear.Whatmusttheone-yearforwardexchangeratebe?

A）$0.7292=€1

B）$0.75=€1

C）$0.81=€1

D）$0.7714=€1

E）$1.2963=€1

（2）Purchasingpowerparitystatesthat:

A）ThecostofahaircutinColumbiaMissourishouldbeexactlythesameasthecostinHongKong.

B）Ratesofinflationmustbethesameeverywhere.

C）Spotexchangeratesarethebestpredictorofexpectedinflationrates.

D）ThecostofaBigMacsandwichshouldbereflectedinthecostoftwoall-beefpatties,specialsauce,lettuce,cheese,pickles,onionsand