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1.

Which one of the following is the most common method of overcoming the agency
problem in emerging countries?
a. concentrated ownership
b. independent boards
c. hostile takeovers
d. foreign direct investment
e. shareholder activism
2. When a central bank sells foreign currency, its international reserves ________.
a. decrease
b. increase
c. remain unchanged
d. are difficult to determine
e. All of the above are possible
3. S$/ArPeso = $0.35/ArPeso and SArPeso/Rand = ArPeso0.31/Rand. What is SRand/$?
a. Rand0.886/$
b.Rand1.129/$
c. Rand3.226/$
d.Rand3.459/$
e. Rand9.217/$
4. If the euro is selling at a discount relative to the USD in the forward market, is the forward
price of USD/EUR larger or smaller than the spot price of the USD /EUR?
a. larger
b. smaller
c. indeterminate
d. the same
e. none of the above
5. If the underlying transaction gives you an asset, denominated in foreign currency, the general
principal behind a money market hedge states you need an equivalent ________ in the
money market to provide a hedge.
a. liability
b. asset
c. spot contract
d. foreign bank account
e. swap contract
6.Which of statements a) through d) about foreign bonds is false?
a. Foreign bonds are denominated in the currency of the issuing company.
b. Foreign bonds are issued in a local market by a foreign borrower.
c. Foreign bonds are marketed to local residents.
d. Foreign bonds are regulated by local authorities.
e. All of the above are true.