Quiz Ch 22 – T/F Definition of Indirect Quote
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: An indirect quote expresses the value of one unit of foreign currency in U.S. dollars.
True or false: An indirect quote expresses the value of one unit of foreign currency in U.S. dollars.
True or false: It is possible to buy a futures contract for any currency.
True or false: Using futures contracts is an alternative approach to forward purchasing foreign currency.
True or false: A forward discount on the yen relative to the dollar indicates that you can expect to receive a lower amount of yen per dollar in the future.
True or false: A forward premium on the USD relative to the Euro implies that goods are expected to be more costly for USD holders in the future.
True or false: The Canadian dollar is trading at a forward premium with a spot rate of $1 = C$1.02 and a 3-month forward rate of $1 = C$1.03.
True or false: To mitigate the risk of yen appreciation, a U.S. importer of Japanese products should consider selling Japanese yen forward.
True or false: Investors tend to allocate their funds to countries with higher real interest rates when real interest rates vary between countries.
True or false: A company can be influenced by currency fluctuations even if it has no foreign currency obligations or receivables.
True or false: The expectation of higher inflation in the U.S. compared to Mexico forecasts a depreciation of the peso against the dollar.