国际金融Chapter 8.ppt

International Financial Management Chapter 8 Test ANSWER: A The international Fisher effect (IFE) suggests that: A) a home currency will depreciate if the current home interest rate exceeds the current foreign interest rate. B) a home currency will appreciate if the current home interest rate exceeds the current foreign interest rate. C) a home currency will appreciate if the current home inflation rate exceeds the current foreign inflation rate. D) a home currency will depreciate if the current home inflation rate exceeds the current foreign inflation rate. ANSWER: A 2. Because there are a variety of factors in addition to infla-tion that affect exchange rates, this will: A) reduce the probability that PPP shall hold. B) increase the probability that PPP shall hold. C) increase the probability the IFE will hold. D) increase the probability that PPP and IFE will hold. ANSWER: A 3. If interest rates on the euro are consistently below U.S. interest rates, then for the international Fisher effect (IFE) to hold: A) the value of the euro would often appreciate against the dollar. B) the value of the euro would often depreciate against the dollar. C) the value of the euro would remain constant most of the time. D) the value of the euro would appreciate in some periods and depreciate in other periods, but on average have a zero rate of appreciation. ANSWER: C 4. If the international Fisher effect (IFE) did not hold based on historical data, then this suggests that: A) some corporations with excess cash can lock in a guar-anteed higher return on future foreign short?term invest-ments. B) some corporations with excess cash could have generated profits on average from covered interest arbitrage. C) some corporations with excess cash could have generated higher profits on average from foreign short?term invest-ments than from domestic short?term investments. D) most corporations that consistently invest in foreign short?term investments would have generated the same prof