Question 1\t \ufffd\u00a0\u00a0\tWhich of the following is most likely to provide currency forward contracts to their customers?\t\u00a0\tQuestion 2\t \ufffd\u00a0\u00a0\t____ forecasting is usually based on either the spot rate or the forward rate.\t\u00a0\tQuestion 3\t \ufffd\u00a0\u00a0\tIf the spot rate of the British pound is $2, and the 180-day forward rate is $2.05, what is the annualized premium or discount?\t\u00a0\tQuestion 4\t \ufffd\u00a0\u00a0\tThe speculative risk of purchasing a ____ is that the foreign currency value ____ over time.\t\u00a0\tQuestion 5\t \ufffd\u00a0\u00a0\tIn the Wall Street Journal, you observe that the British pound (\u00a3) is quoted for $1.65. The Australian dollar (A$) is quoted for $0.60. What is the value of the Australian dollar in British pounds?\t\u00a0\tQuestion 6\t \ufffd\u00a0\u00a0\tAssume that a British pound put option has a premium of $.03 per unit, and an exercise price of $1.60. The present spot rate is $1.61. The expected future spot rate on the expiration date is $1.52. The option will be exercised on this date if at all. What is the expected per unit net gain (or loss) resulting from purchasing the put option?\t\u00a0\tQuestion 7\t \ufffd\u00a0\u00a0\tWhen a government influences factors, such as inflation, interest rates, or income, in order to affect currency’s value, this is an example of\t\u00a0\tQuestion 8\t\u00a0\t \ufffd\u00a0\u00a0\tIf the U.S. government imposed trade restrictions on U.S. imports, this would ____ the U.S. demand for foreign currencies, and would place ____ pressure on the values of foreign currencies (with respect to the dollar).\t\u00a0\tQuestion 9\t\u00a0\t \ufffd\u00a0\u00a0\tThe act of capitalizing on the discrepancy between the forward rate premium and the interest rate differential is called\t\u00a0\tQuestion 10\t \ufffd\u00a0\u00a0\tCurrency futures contracts differ from forward contracts in that they\t\u00a0\tQuestion 11\t\u00a0\t \ufffd\u00a0\u00a0\tIf a firm planning to hedge receivables is certain of the future direction a spot rate will move, and requires a tailor-made hedge in terms of amount and maturity date, it should use a\t\u00a0\tQuestion 12\t \ufffd\u00a0\u00a0\tIf U.S. interest rates suddenly become much higher than European interest rates (and if it does not cause concern about higher inflation there), the U.S. demand for euros would ____, and the supply of euros to be exchanged for dollars would ____, other factors held constant.\t\u00a0\tQuestion 13\t\u00a0\t \ufffd\u00a0\u00a0\tA system whereby exchange rates are market determined without boundaries but subject to government intervention is called\t\u00a0\tQuestion 14\t\u00a0\t \ufffd\u00a0\u00a0\tAssume interest rate parity exists. If the spot rate on the British pound is $2 and the 1-year British interest rate is 7 percent, and the 1-year U.S. interest rate is 11 percent, what is the pound’s forward discount or premium?\t\u00a0\tQuestion 15\t\u00a0\t \ufffd\u00a0\u00a0\tAssume an equilibrium state in which European inflation and U.S. inflation are both 4 percent. If U.S. inflation suddenly decreased to 2 percent, the euro will ____ against the dollar by approximately ____ percent, according to purchasing power parity.\t\u00a0\tQuestion 16\t\u00a0\t \ufffd\u00a0\u00a0\tWhen banks obtain funds in the federal funds market, the providers of the funds are\t\u00a0\tQuestion 17\t\u00a0\t \ufffd\u00a0\u00a0\t____ loans are extended primarily to finance the purchase of fixed assets such as machinery.\t\u00a0\tQuestion 18\t \ufffd\u00a0\u00a0\tA ____ is a time deposit offered by some large banks to corporations, with a specific maturity date, minimum deposit of $100,000 or more, and a secondary market.\t\u00a0\tQuestion 19\t \ufffd\u00a0\u00a0\tWhen a bank obtains funds through ____, households are not a common provider of the funds.\t\u00a0\tQuestion 20\t \ufffd\u00a0\u00a0\tWhen a bank obtains funds through a ____, the provider of the funds receives collateral.\t\u00a0\tQuestion 21\t \ufffd\u00a0\u00a0\tWhen banks need funding for just a few days, they would most likely\t\u00a0\tQuestion 22\t \ufffd\u00a0\u00a0\tWhich of the following is not an off-balance sheet activity?\t\u00a0\tQuestion 23\t \ufffd\u00a0\u00a0\t____ are the largest bank source of funds (as a percentage of total liabilities).\t\u00a0\tQuestion 24\t \ufffd\u00a0\u00a0\t____ is (are) not a major source of funds for commercial banks.\t\u00a0\tQuestion 25\t \ufffd\u00a0\u00a0\tA ____ is a type of loan commitment.\t\u00a0\tQuestion 26\t \ufffd\u00a0\u00a0\tWhich type of savings account transfers funds to a checking account when checks are written?\t\u00a0\tQuestion 27\t \ufffd\u00a0\u00a0\tCommercial banks are not allowed to invest in\t\u00a0\tQuestion 28\t \ufffd\u00a0\u00a0\tSubordinated notes and debentures are examples of\t\u00a0\tQuestion 29\t \ufffd\u00a0\u00a0\t____ loans are primarily used to finance the purchase of fixed assets.\t\u00a0\tQuestion 30\t\u00a0\t \ufffd\u00a0\u00a0\tWhen a bank in need of funds for a few days sells some of its government securities to a corporation with a temporary excess of funds, then buys them back shortly thereafter, this is a<\/p>\n","protected":false},"excerpt":{"rendered":"
Question 1 \ufffd\u00a0\u00a0 Which of the following is most likely to provide currency forward contracts to their customers? \u00a0 Question 2 \ufffd\u00a0\u00a0 ____ forecasting is usually based on either the spot rate or the forward rate. \u00a0 Question 3 \ufffd\u00a0\u00a0 Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-216445","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/216445","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=216445"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/216445\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=216445"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=216445"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=216445"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}