国际财务管理chapter11.docVIP

Chapter 11 1. Multiple Choice Quiz (1) LIBOR stands for A) Luxembourg Interbank Offered Rate B) Lisbon International Bank Offered Rate C) London International Bank Offered Rate D) London Interbank Offered Rate (2) Forward rate agreements can be used for speculative purposes. If one believes rates will be less than the agreement rate, A) Take a short position in a forward rate agreement. B) The purchase of a FRA is the suitable position C) The sale of a FRA is the suitable position. D) Take a long position in the spot market(3)A Eurodollar is: A) What the Europeans call the euro. B) Deposits of U.S. dollars held in Europe, but not elsewhere. C) A time deposit of U.S. dollars in an international bank located outside the United States. D) A time deposit of euros.(4) The international debt crisis was caused by A) Interest rates that became too high, burdening debtor nations. B) International banks lending more to Third World sovereign governments than they should have. C) Sovereign governments raising taxes too quickly. D) Eurodollar defaults 2. Calculation and analysis (1) Grecian Tile Manufacturing of Athens, Georgia, borrows $1,500,000 at LIBOR plus a lending margin of 1.25 percent per annum on a six-month rollover basis from a London bank. If six-month LIBOR is 4 ? percent over the first six-month interval and 5 3/8 percent over the second six-month interval, how much will Grecian Tile pay in interest over the first year of its Eurodollar loan? (2) A bank sells a “three against six” $3,000,000 FRA for a three-month period beginning three months from today and ending six months from today. The purpose of the FRA is to cover the interest rate risk caused by the maturity mismatch from having made a three-month Eurodollar loan and having accepted a six-month Eurodollar deposit. The agreement rate with the buyer is 5.5 percent. There are actually 92 days in the three-month FRA period. Assume that three months from today the settlement rate is 4 7/8 p