Quiz Ch 22 – T/F Definition of Direct Exchange Rate
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: The direct exchange rate specifies the U.S. dollars needed for one unit of a foreign currency.
True or false: The direct exchange rate specifies the U.S. dollars needed for one unit of a foreign currency.
True or false: An indirect quote expresses the value of one unit of foreign currency in U.S. dollars.
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: A company can be influenced by currency fluctuations even if it has no foreign currency obligations or receivables.
True or false: An increase in the interest rate of a country leads to a rise in the value of its currency in the forward market.
True or false: The international Fisher effect suggests that disparities in nominal interest rates among countries are indicative of variations in their expected rates of inflation.
True or false: According to the law of one price, a commodity, when priced in the same currency, should have a uniform cost across all countries.
True or false: It is typically possible to identify and hedge transaction risk.