International Financial Management 8E - Eun - TBChapter 8

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1、ExamName___________________________________MULTIPLECHOICE.Choosetheonealternativethatbestcompletesthestatementoranswersthequestion.1)Transactionexposureisdefinedas1)A)thepotentialthatthefirm'sconsolidatedfinancialstatementcanbeaffectedbychangesinexchangerates.B)theexten

2、ttowhichthevalueofthefirmwouldbeaffectedbyunanticipatedchangesinexchangerate.C)expostandexantecurrencyexposures.D)thesensitivityofrealizeddomesticcurrencyvaluesofthefirm'scontractualcashflowsdenominatedinforeigncurrenciestounexpectedexchangeratechanges.Answer:DTopic:Thr

3、eeTypesofExposure2)Themostdirectandpopularwayofhedgingtransactionexposureisby2)A)currencyforwardcontracts.B)foreigncurrencywarrants.C)exchange-tradedfuturesoptions.D)borrowingandlendinginthedomesticandforeignmoneymarkets.Answer:ATopic:ThreeTypesofExposure3)Ifyouhavealon

4、gpositioninaforeigncurrency,youcanhedgewith3)A)ashortpositioninanexchange-tradedfuturesoption.B)ashortpositioninforeigncurrencywarrants.C)ashortpositioninacurrencyforwardcontract.D)borrowing(notlending)inthedomesticandforeignmoneymarkets.Answer:CTopic:ThreeTypesofExposu

5、re4)Ifyouoweaforeigncurrencydenominateddebt,youcanhedgewith4)A)alongpositioninacurrencyforwardcontract,orbuyingtheforeigncurrencytodayandinvestingitintheforeigncounty.B)buyingtheforeigncurrencytodayandinvestingitintheforeigncounty.C)alongpositioninacurrencyforwardcontra

6、ct.D)alongpositioninanexchange-tradedfuturesoption.Answer:ATopic:ThreeTypesofExposure15)Ifyouownaforeigncurrencydenominatedbond,youcanhedgewith5)A)aswapcontractwherepaythecashflowsofthebondinexchangefordollars.B)alongpositioninacurrencyforwardcontract.C)buyingtheforeign

7、currencytodayandinvestingitintheforeigncounty.D)alongpositioninanexchange-tradedfuturesoption.Answer:ATopic:ThreeTypesofExposure6)Thesensitivityof"realized"domesticcurrencyvaluesofthefirm'scontractualcash6)flowsdenominatedinforeigncurrencytounexpectedchangesintheexchang

8、erateisA)translationexposure.B)transactionexposure.C)economicexposure.D)noneoftheoptionsAnswer:BTopic:ThreeTyp