Suppose the exchange rate of euro at current spot market is $1.25/€. If a call option has a strike price of $1.28/€ then we can say this option is a) inthemoney b) outofthemoney c) atthemoney d) past breakeven
2. Suppose the exchange rate of euro at current spot market is $1.25/€. If a call option has a strike price of $1.28/€ then we can say this option is
a) inthemoney
b) outofthemoney
c) atthemoney
d) past breakeven
3. Suppose the exchange rate of euro at current spot market is $1.25/€. If a put option has a strike price of $1.18/€ then we can say this option is
a) inthemoney
b) outofthemoney
c) atthemoney
d) past breakeven
4. According to our class discussion, suppose a U.S. based real estate developer is participating in a bid competition for a land in London. What of the followings can provide the best protection when Pound is expected to appreciate
a) Call options
b) buy futures
c) sell forwards
d) buy forwards
5. Which of following activities dominates foreign exchange transactions
a) multinational corporations buying and selling foreign exchange
b) importers and exporters buying and selling foreign exchange
c) banks buying and selling foreign exchange
d) governments buying and selling foreign exchange
6. Which of following correctly defines American terms
a) number of U.S. dollars per unit of foreign currency
b) number of foreigncurrency units per U.S. dollar
c) quotation system found in the United States
d) bidask spread on the U.S. dollar
7. Which of following groups usually engages in forward contracts on the foreign exchange(FX) markets to hedge their home-currency value of assets and liabilities located and denominated in foreign countries.
a) commercial banks
b) public utilities
c) multinational corporations
d) speculators
8. If an exporter takes a long position in the forward market, it will be
a) buying currency for future delivery
b) selling currency for future delivery
c) arbitraging the interest rate differential
d) buying a forward contract at a premium
9. Which of the following is the largest foreign exchange transaction market in the world
a) New York
b) Frankfurt
c) Zurich
d) London
10. Which of followings best describes difference(s) between futures and forward contracts?
a) forward contracts are individually tailored while futures contracts are standardized
b) forward contracts are negotiable with banks while futures contracts are bought/sold on an organized exchange
c) forward contracts have no daily limits on price fluctuations whereas futures contracts have a daily limit on price fluctuations
d) all of the above
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
