Professional Documents
Culture Documents
8. Assume that the bank’s bid quote of Thai bath is .126 and ask price is .129. If you
have Thai Bath what is Thai Bath that you need to purchase $100,000 (round up to
2 decimal numbers) – 793650.79
9. A quotation representing the number of units of a foreign currency per dollar is
referred to as a(an) __ quotation. On the other hand, a quotation representing the
value of a foreign currency in dollars is referred to as a(an) __ quotation
A. Direct; indirect
B. Indirect; indirect
C. Indirect; direct
D. Direct; direct
10. Assume that $1 is equal to .85 British Pound and 98 yen what is the value of yen
in British Pound (round up to 4 decimal numbers) – 0.0087
11. Who are the main participants in the international money market?
A. Small firms
B. Small European firms needing European currencies forr international trade
C. Consumers
D. Large corporations
12. What is main purpose of caculating the bid – ask spread in an exchange rate?
A. The bid – ask spread determines the transaction cost of foreign exchange
B. The bid – ask spread determines how an exchange rate will change
C. The bid – ask spread determines the currency option premium
D. The bid – ask spread determines the forward premium
13. What is the main objective of the international money market?
A. Medium – term lending
B. Placing bonds with investor
C. Short – term lending (one year or less)
D. Long – term lending
14. Which currency is used the most to denominate Eurobonds?
A. The British Pound
B. The Vietnam dong
C. The Janpanese yen
D. The US dollar
15. An MNC’s medium debt financing decisions are satisfied in the __ market while
its short – term financing decisions are satisfied in the __ market?
A. International credit; international money
B. International money; international bond
C. International money; International credit
D. International bond; International credit
16. According to the textbook, what is the average daily foreign exchange trading
globally?
A. None of above
B. Equals about $500 billion
C. Equals about $700 billion
D. Equals about $300 billion
17. Which of the following factor does not affects the bid/ask spread
A. Order expenses
B. Volume
C. Inventory expenses
D. Personal relationship
18. Which of the following statement is incorrect regarding to spot market liquidity?
A. A currency’s liquidity affects the ease with which an MNC can obtain or sell that
currency
B. If a currency is illiquid, an MNC is typically able to quickly purchase that
currency at a reasonable exchange rate
C. The spot markets for heavily trade currencies such as the Japanese yen are very
liquid
D. The more willing buyer and sellers there are, the more liquid a market is