国际金融英文版试题chapter5.docVIP

INTERNATIONAL FINANCE Assignment Problems (5) Name: Student#: I. Choose the correct answer for the following questions (only correct answer) (3 credits for each question, total credits 3 x 20 = 60) 1. When the supply of and demand for a foreign exchange in the foreign exchange market are exactly the same, the exchange rate is the __________. A. real exchange rate B. effective exchange rate C. equilibrium exchange rate D. cross exchange rate 2. An increase in the demand for French goods and services will __________. A. induce a rightward shift in the demand for euro B. induce a leftward shift in the demand for euro C. result in a rightward movement along the demand curve for euro D. result in a leftward movement along the demand curve for euro 3. If U.S. demand for Japanese goods increases and Japan’s demand for U.S. products also rises at the same time, which of the following can you conclude in this situation? A. The U.S. dollar will appreciate against the yen. B. The U.S. dollar will depreciate against the yen. C. The U.S. dollar will not change relative to the yen. D. The U.S. dollar may appreciate, depreciate, or remain unchanged against the yen. 4. If the price of a pair of Nike sneakers costs $85 in U.S, and the price of the same sneakers is €80 in Paris, the spot rate is $1.35 per euro, the euro __________. A. is correctly valued according to PPP B. is correctly valued according to relative PPP C. is undervalued according to PPP D. is overvalued according to PPP 5. If the expected exchange rate E (SB/A) according to the relative purchasing power parity is lower than the spot exchange rate (SB/A), we may conclude that __________. A. country B is expected to run huge BOP surplus with country A B. country A’s interest rate is going to be lower than that of country B’s C. the expected inflation rate in country A is higher than the expected inflation rate in country B D. the expected inflation rate in country A is lower than the expected inflation rate in country