国际金融Chapter 7-2017年10月.ppt

International Financial Management Chapter 7 Test ANSWER: D 1. Due to _______, market forces should realign the spot rate of a currency among banks. A) forward realignment arbitrage B) triangular arbitrage C) covered interest arbitrage D) locational arbitrage ANSWER: B 2. Due to _______, market forces should realign the cross exchange rate between two foreign currencies based on the spot exchange rates of the two currencies against the U.S. dollar. A) forward realignment arbitrage B) triangular arbitrage C) covered interest arbitrage D) locational arbitrage ANSWER: A 3. Assume that the interest rate in the home country of Currency X is a much higher interest rate than the U.S. interest rate. According to interest rate parity, the forward rate of Currency X: A) should exhibit a discount. B) should exhibit a premium. C) should be zero (i.e., it should equal its spot rate). D) should exhibit a premium or should be zero. ANSWER: B 4. If the interest rate is higher in the U.S. than in the United Kingdom, and if the forward rate of the British pound (in U.S. dollars) is the same as the pound’s spot rate, then: A) U.S. investors could possibly benefit from covered interest arbitrage. B) British investors could possibly benefit from covered interest arbitrage. C) neither U.S. nor British investors could benefit from covered interest arbitrage. D) U.S. and British investors could possibly benefit from covered interest arbitrage. ANSWER: A 5. Assume that a U.S. firm can invest funds for one year in the U.S. at 12% or invest funds in Mexico at 14%. The spot rate of the peso is $.10 while the one-year forward rate of the peso is $.10. If U.S. firms attempt to use covered interest arbitrage, what forces should occur? A) spot rate of peso increases; forward rate of peso decreases. B) spot rate of peso decreases; forward rate of peso increases. C) spot rate of peso decreases; forward rate of peso decreases. D) spot rate of peso increases; forward rate of peso increases.