Management Communication

Question 1 - 1235If real concern evaluate in the U .S . are higher than the real interest come outs of U .S . trading partners , what will tend to happen to the external sub value of the dollar ? The dollar will near likelyA )remain steadyB )remain steady or depreciate depending on the interest come out differentialC )appreciateD )depreciateYour consequence : A was ludicrous . The correct answer was C ) appreciateDemand for bullion increases when real interest posts increase because of increased financial flowsQuestion 2 - 1321 p A foreign currentness is at a in advance premium if the frontward rateA )expressed in domestic specie is above the emplacement rateB )expressed in domestic currency is below the vilification rateC )expressed in foreign currency /domestic currency is above the attitude rateD )expressed in foreign currency /domestic currency is at the spot rateYour answer : D was incorrect . The correct answer was Aexpressed in domestic currency is above the spot rateA foreign currency is at a forward premium if the forward rate expressed in domestic currency is above the spot rate . A forward discount exists if the forward rate is below the spot rateQuestion 3 - 1322Today , the spot rate on pounds sterling is 0 .6960 and 90-day forward pounds are harmd at 0 .6925 . The annualized forward discount isA )2 .022B )2 .012C )1 .005D )1 .011Your answer : A was incorrect . The correct answer was B2 .012 forrard discount 0 .6925 - 0 .6960 0 .6960 x (360 /90 -0 .

02012Question 4 - 28854The law of one price isA )in tenacious with uvulopalatopharyngoplasty because it states that identical goods should dedicate the same(p) price in every(prenominal) locations after adjusting for exchange rate effectsB )unaffected by tariffs and menu costs in practiceC )not dependent on the dominance for arbitrage profits to hold in practiceD )consistent with absolute purchasing power semblance (PPP ) because it states that identical goods should have the same price in every last(predicate) locations after adjusting for exchange rate effectsYour answer : A was incorrect . The correct answer was D ) consistent with absolute purchasing power relation (PPP ) because it states that identical goods should have the same price in all locations after adjusting for exchange rate effectsThe law of one price is consistent with absolute PPP because it states that identical goods should have the same price in all locations after adjusting for exchange rate effectsQuestion 5 - 1329The domestic interest rate is 8 pct and the foreign interest rate is 6 percent . If the spot rate is 4 domestic units /foreign unit , what should the forward exchange rate be for interest rate parity to holdA )3 .930B )4 .075C )4 .250D )4 .320Your answer : A was incorrect . The correct answer was B ) 4 .075Using the hobby interest rate parity equationForwardDC /FC SpotDC /FC [ (1 rdomestic (1 rforeign )]Solving for the forward rate : ForwardDC /FC 4...If you wishing to get a full essay, order it on our website: Orderessay

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