MBA 620 Exam 1 Actual Exam 2026 | Complete Questions and
Correct Answers | Verified Answers | Complete Exam | Just
Released
Assume the Canadian dollar is equal to $.88 and the Peruvian Sol is
equal to $.35. The value of the Peruvian Sol in Canadian dollars is: -------
--CORRECT ANSWER-----------------about .3977 Canadian dollars
Assume that the bank's bid quote of Mexican peso is $.126 and ask
price is $.129. If you have Mexican pesos, what is the amount of pesos
that you need to purchase $100,000? ---------CORRECT ANSWER-----------
------793,651
A Japanese yen is worth $.0080, and a Fijian dollar (F$) is worth $.5900.
What is the value of the yen in Fijian dollars (i.e., how many Fijian
dollars do you need to buy a yen)? ---------CORRECT ANSWER---------------
--.014
Assume that a bank's bid rate on Swiss francs is $.45 and its ask rate is
$.47. Its bid-ask percentage spread is: ---------CORRECT ANSWER----------
-------4.26%
,Assume that $1 is equal to .85 Euros and 98 yen. The value of yen in
euros is ---------CORRECT ANSWER-----------------.0087
If a U.S. firm desires to avoid the risk from exchange rate fluctuations,
and it is receiving 100,000 in 90 days, it could: ---------CORRECT
ANSWER-----------------obtain a 90-day forward sale contract on euros.
____ is not a factor that affects the bid/ask spread. ---------CORRECT
ANSWER-----------------All of the above factors affect the bid/ask spread
(order costs, inventory costs, and volume)
In general, stock markets allow for more price efficiency and attract
more investors when they have all of the following except: ---------
CORRECT ANSWER-----------------less stringent accounting requirements
Your company expects to receive 5,000,000 Japanese yen 60 days from
now. You decide to hedge your position by selling Japanese yen
forward. The current spot rate of the yen is $.0089, while the forward
rate is $.0095. You expect the spot rate in 60 days to be $.0090. How
, many dollars will you receive for the 5,000,000 yen 60 days from now if
you sell yen forward? ---------CORRECT ANSWER-----------------$47,500
The value of euro was $1.30 last week. During last week the euro
depreciated by 5%. What is the value of euro today? ---------CORRECT
ANSWER-----------------$1.235
If U.S. inflation suddenly increased while European inflation stayed the
same, there would be: ---------CORRECT ANSWER-----------------an
increased U.S. demand for euros and a decreased supply of euros for
sale.
Illiquid currencies tend to exhibit ____ volatile exchange rate
movements, as the equilibrium prices of their currencies adjust to ____
changes in supply and demand conditions. ---------CORRECT ANSWER----
-------------more; even minor
If a currency's spot market is ____, its exchange rate is likely to be ____
to a single large purchase or sale transaction. ---------CORRECT ANSWER-
----------------liquid; insensitive
Correct Answers | Verified Answers | Complete Exam | Just
Released
Assume the Canadian dollar is equal to $.88 and the Peruvian Sol is
equal to $.35. The value of the Peruvian Sol in Canadian dollars is: -------
--CORRECT ANSWER-----------------about .3977 Canadian dollars
Assume that the bank's bid quote of Mexican peso is $.126 and ask
price is $.129. If you have Mexican pesos, what is the amount of pesos
that you need to purchase $100,000? ---------CORRECT ANSWER-----------
------793,651
A Japanese yen is worth $.0080, and a Fijian dollar (F$) is worth $.5900.
What is the value of the yen in Fijian dollars (i.e., how many Fijian
dollars do you need to buy a yen)? ---------CORRECT ANSWER---------------
--.014
Assume that a bank's bid rate on Swiss francs is $.45 and its ask rate is
$.47. Its bid-ask percentage spread is: ---------CORRECT ANSWER----------
-------4.26%
,Assume that $1 is equal to .85 Euros and 98 yen. The value of yen in
euros is ---------CORRECT ANSWER-----------------.0087
If a U.S. firm desires to avoid the risk from exchange rate fluctuations,
and it is receiving 100,000 in 90 days, it could: ---------CORRECT
ANSWER-----------------obtain a 90-day forward sale contract on euros.
____ is not a factor that affects the bid/ask spread. ---------CORRECT
ANSWER-----------------All of the above factors affect the bid/ask spread
(order costs, inventory costs, and volume)
In general, stock markets allow for more price efficiency and attract
more investors when they have all of the following except: ---------
CORRECT ANSWER-----------------less stringent accounting requirements
Your company expects to receive 5,000,000 Japanese yen 60 days from
now. You decide to hedge your position by selling Japanese yen
forward. The current spot rate of the yen is $.0089, while the forward
rate is $.0095. You expect the spot rate in 60 days to be $.0090. How
, many dollars will you receive for the 5,000,000 yen 60 days from now if
you sell yen forward? ---------CORRECT ANSWER-----------------$47,500
The value of euro was $1.30 last week. During last week the euro
depreciated by 5%. What is the value of euro today? ---------CORRECT
ANSWER-----------------$1.235
If U.S. inflation suddenly increased while European inflation stayed the
same, there would be: ---------CORRECT ANSWER-----------------an
increased U.S. demand for euros and a decreased supply of euros for
sale.
Illiquid currencies tend to exhibit ____ volatile exchange rate
movements, as the equilibrium prices of their currencies adjust to ____
changes in supply and demand conditions. ---------CORRECT ANSWER----
-------------more; even minor
If a currency's spot market is ____, its exchange rate is likely to be ____
to a single large purchase or sale transaction. ---------CORRECT ANSWER-
----------------liquid; insensitive
