FIN 582 Exam 1 Witte MSU Questions
and Answers Guide (already passed)
Latest 2025
What are direct and indirect exchange rates? - Correct
Answers ✅Direct: HC/FC
Indirect: FC/HC
U.S. Perspective exchange rate $1.3309/EUR (direct or
indirect) - Correct Answers ✅Direct bc HC/FC
EUR perspective exchange rate $1.3309/EUR - Correct
Answers ✅Indirect bc FC/HC
What is base and terms currency in an exchange rate? -
Correct Answers ✅Base: the 1 unit currency
Terms: The "other currency amount that is equal to 1 unit of
the base
Always written in Terms/Base
EUR.0771/MXN what is the base what is the terms - Correct
Answers ✅Base: MXN
Terms: EUR
How does taking an inverse affect the base and terms
currencies? - Correct Answers ✅It switches the base and
terms currencies
,FIN 582 Exam 1 Witte MSU Questions
and Answers Guide (already passed)
Latest 2025
Take EUR.0771/MXN and make MXN the terms currency and
EUR the base. - Correct Answers ✅1/0.0771=
MXN12.9702/EUR
How to find percentage change? - Correct Answers ✅new-
old/old
Exchange rate is $1.2655/EUR, EUR has depreciated 5% what
is exchange rate now? - Correct Answers ✅Take
1.2655*0.05=X
X-1.2655= ANS
Exchange rate is $1.2655/EUR, $ has depreciated 5% what is
exchange rate now? - Correct Answers ✅1. Make it EUR/$
(.7902)
2. take .7902*0.05= .0395
3. .7902-.0395= .7507
4. 1/.7507= ANS
If the U.S. dollar appreciates, A U.S. importer paying MXN
10,000 for a good from Mexico will find the dollar cost they
pay for the good (which is what U.S. firms are most
concerned about) to be ______________ than before. - Correct
Answers ✅LOWER
, FIN 582 Exam 1 Witte MSU Questions
and Answers Guide (already passed)
Latest 2025
If the MXN depreciates, A U.S. importer paying MXN 10,000
for a good from Mexico will find the dollar cost they pay for
the good (which is what U.S. firms are most concerned about)
to be ______________ than before. - Correct Answers
✅LOWER
If the U.S. dollar depreciates, A U.S. importer paying MXN
10,000 for a good from Mexico will find the dollar cost they
pay for the good (which is what U.S. firms are most
concerned about) to be ______________ than before. - Correct
Answers ✅MORE EXPENSIVE
If the MXN appreciates, A U.S. importer paying MXN 10,000
for a good from Mexico will find the dollar cost they pay for
the good (which is what U.S. firms are most concerned about)
to be ______________ than before. - Correct Answers ✅MORE
EXPENSIVE
Suppose the U.S. dollar appreciates. A U.S. exporter sells a
product to a Mexican importer for which the price is MXN
10,000.
The Mexican importer will find the price she pays for the
goods to stay the same! The currency of invoice is the MXN
after all.
The U.S. exporter will find that their dollar revenues from the
MXN 10,000 sale to ___________. - Correct Answers ✅FALL
and Answers Guide (already passed)
Latest 2025
What are direct and indirect exchange rates? - Correct
Answers ✅Direct: HC/FC
Indirect: FC/HC
U.S. Perspective exchange rate $1.3309/EUR (direct or
indirect) - Correct Answers ✅Direct bc HC/FC
EUR perspective exchange rate $1.3309/EUR - Correct
Answers ✅Indirect bc FC/HC
What is base and terms currency in an exchange rate? -
Correct Answers ✅Base: the 1 unit currency
Terms: The "other currency amount that is equal to 1 unit of
the base
Always written in Terms/Base
EUR.0771/MXN what is the base what is the terms - Correct
Answers ✅Base: MXN
Terms: EUR
How does taking an inverse affect the base and terms
currencies? - Correct Answers ✅It switches the base and
terms currencies
,FIN 582 Exam 1 Witte MSU Questions
and Answers Guide (already passed)
Latest 2025
Take EUR.0771/MXN and make MXN the terms currency and
EUR the base. - Correct Answers ✅1/0.0771=
MXN12.9702/EUR
How to find percentage change? - Correct Answers ✅new-
old/old
Exchange rate is $1.2655/EUR, EUR has depreciated 5% what
is exchange rate now? - Correct Answers ✅Take
1.2655*0.05=X
X-1.2655= ANS
Exchange rate is $1.2655/EUR, $ has depreciated 5% what is
exchange rate now? - Correct Answers ✅1. Make it EUR/$
(.7902)
2. take .7902*0.05= .0395
3. .7902-.0395= .7507
4. 1/.7507= ANS
If the U.S. dollar appreciates, A U.S. importer paying MXN
10,000 for a good from Mexico will find the dollar cost they
pay for the good (which is what U.S. firms are most
concerned about) to be ______________ than before. - Correct
Answers ✅LOWER
, FIN 582 Exam 1 Witte MSU Questions
and Answers Guide (already passed)
Latest 2025
If the MXN depreciates, A U.S. importer paying MXN 10,000
for a good from Mexico will find the dollar cost they pay for
the good (which is what U.S. firms are most concerned about)
to be ______________ than before. - Correct Answers
✅LOWER
If the U.S. dollar depreciates, A U.S. importer paying MXN
10,000 for a good from Mexico will find the dollar cost they
pay for the good (which is what U.S. firms are most
concerned about) to be ______________ than before. - Correct
Answers ✅MORE EXPENSIVE
If the MXN appreciates, A U.S. importer paying MXN 10,000
for a good from Mexico will find the dollar cost they pay for
the good (which is what U.S. firms are most concerned about)
to be ______________ than before. - Correct Answers ✅MORE
EXPENSIVE
Suppose the U.S. dollar appreciates. A U.S. exporter sells a
product to a Mexican importer for which the price is MXN
10,000.
The Mexican importer will find the price she pays for the
goods to stay the same! The currency of invoice is the MXN
after all.
The U.S. exporter will find that their dollar revenues from the
MXN 10,000 sale to ___________. - Correct Answers ✅FALL
