FIN 001 Research Newspaper

п»їSelect the best answers for questions (2 items each for questions 1-10) 1 . HSBC is a UK-based bank, and it holds a lot more than 50% equity of Hang Seng which is a Hong Kong centered bank. Which of the next statement is proper? A) Hang up Seng is the representative business office of HSBC at HASTKRAFTER

B) Suspend Seng is a foreign branch of HSBC

C) Hang Seng is the overseas subsidiary bank of HSBC

D) Hang up Seng and HSBC happen to be two impartial banks.

2 . Which of the following solutions is not really provided by a standard bank? A) Accept deposits

B) Generate loans to a firm

C) Manufacture products from raw materials

D) Execute payments for goods on behalf of customers

three or more. A WSJ (wall road journal) document reports that:

" the euro i visited $1. 3653 from $1. 3674 at Monday's close, while the buck was at 116. 09 yen from 116. 08 yen” That means the dollar_________against european, and the yen_____________against dollar A) appreciated; liked

B) appreciated; depreciated

C) depreciated; depreciated

D) lowered; appreciated

4. With the following exchange rates, which can be quoted in European terms? i) two USD for just one British pound;

ii) 0. seventy five euro for starters USD;

iii) 7. 8 HKD for one USD;

iv) 100 yen for one UNITED STATES DOLLAR

A) only i)

B) only ii)

C) iii) and iv)

D) ii), iii) and iv)

5. The AUD/$ place exchange charge is AUD1. 60/$ as well as the SF/$ exchange rate is definitely SF1. 25/$. The AUD/SF cross exchange rate is usually thus: A) 0. 7813

B) installment payments on your 0000

C) 1 . 2800

D) 0. 3500

6. Which in the following assertions about forward rate/forward deal is BOGUS? A) the forward level is determined the moment both the lengthy side plus the short part enter into the forward agreement B) The forward charge will not be carried out until the ahead contract runs out C) The forward rate represents industry prediction of the future spot rate D) The forward rate is determined if the forward contract is about to expire

7. Presume the current exchange rate is definitely $1. 6 for ВЈ1, and the expected inflation charge in the U. S. and the U. K. are 2% and 4%, correspondingly, in the coming year. In line with the relative PPP, A) bucks is anticipated to appreciate against ВЈ in one year

B) $ is expected to depreciate against ВЈ in one 12 months

C) the $/ВЈ exchange rate is usually expected to continue to be unchanged inside the coming year D) none of the over

8. Consider the two estimates about Japanese yen up against the U. S. dollar: The location rate can be ВҐ108/$; although the 85 day ahead rate is usually ВҐ110/$. Applying what you might have learned via interest rate parity (IRP), which usually of the pursuing is correct? A) yen is definitely expected to depreciate against buck, and relating to IRP, interest rate applicable in Japan should be more than that applicable in the U. S. B) yen is definitely expected to appreciate against dollar, and relating to IRP, interest rate applicable in Asia should be more than that prevailing in the U. S. C) yen is definitely expected to depreciate against buck, and according to IRP, interest rate applicable in Asia should be lower than that prevailing in the U. S. D) yen can be expected to value against dollar, and in accordance to IRP, interest rate prevailing in The japanese should be below that applicable in the U. S.

being unfaithful. If IRP fails to carry,

A) Pressure from arbitrageurs should provide exchange rates and rates of interest back into collection B) It may fail to hold due to ventures costs

C) It may be due to the government-imposed capital controls

D) All of the above

10. In accordance to Fisher effect, once interest rate in country A is greater than interest rate in country M, the inflation rate in country A is anticipated to be _________ the pumpiing rate in country N. A) lower than

B) greater than

C) the same as

D) no enough information to see

Questions 11-16 are quantitative problems: you have to show both the final results and the method with which you obtain the final results. 14. Suppose a U. S i9000. investor bought 100 shares of Toyota Corporation in year 2001. At that time each share of Toyota Firm cost 12, 000 yen, and the applicable spot exchange rate...