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All of the following groups are subject to foreign exchange risk




All of the following groups are subject to foreign exchange risk except;A. Importers and exporters;B. Investors;C. MNCs;D. All of these are subject to foreign exchange risk;The following are examples of factors that significantly influence exchange rates except;A. The cost to purchase a loaf of bread in the U.S. has increased by $.50 while the cost has remained the same in London.;B. The cost of capital has increased by 2% in the U.S. and has decreased by 2% in Germany.;C. Interest rates on ST investments in the U.S. have decreased to 4% while interest rates in Japan are at 8%.;D. The U.S. has begun to export a higher level of goods to China than the prior year.;All of these are true.;98. In the Eurobond market;A. the interest rate is very high.;B. the security is denominated in a currency that is different from that of the nation in which the bonds are issued.;C. the Swiss franc is the most important currency.;D. disclosure requirements are very strict.;Which of the following statements about foreign affiliates is (are) true?;A. In general, foreign affiliates are more profitable than domestic businesses.;B. Foreign affiliates usually lower the portfolio risk of the parent company.;C. Foreign affiliates may have a significant positive impact on the host company's economic growth, employment, trade, and balance of payments.


Paper#33798 | Written in 18-Jul-2015

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