FINA 4500 FINAL EXAM 2026 complete
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Exam (updated 2026) Study Guide Exam
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Detailed Solutions & updated 2026
(latest version verified for accuracy) |
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1.The managers are the agents of the firms, and _________ are its principals. -
ANSWERS-STOCKHOLDERS
2.Assume it is January 20X0. The following table provides a forecast of Zenith Inc's (an
US company) cash receipt in US dollars, Euros and Pesos dollars for January 20X1 and
January 20X2. Also provided are the exchange rate forecasts for Euros and Pesos
during the same time periods.
January 20X1 January 20X2
Receipt Exchange Rate Receipt Exchange Rate
US Dollars 15,000,000 NA 18,000,000 NA
Euros 13,000,000 $1.30 15,000,000 $1.10
Pesos 20,000,000 $0.15 30,000,000 $0.20
,If Zenith's required rate of return is 10%, estimate the value of Zenith's total cash receipt
using the valuation model for an MNC. - ANSWERS-$ 65,198,347
3.The chart below reports the dollar price of euro from 2006 to 2020. Based on this
chart, during the 2006 - 2008 period, the net cash flow of a US firm which mostly
produced its goods in the US and sold them in Europe would have_______. -
ANSWERS-INCREASED
4.The chart below reports the dollar price of euro from 2006 to 2020. Based on this
chart, during the 2006 - 2008 period, the net cash flow of a US firm which mostly
produced its goods in Europe and sold them in the US would have_______. -
ANSWERS-DECREASED
5.The chart below reports the dollar price of euro from 2006 to 2020. Based on this
chart, during the 2014 - 2015 period, the net cash flow of a US firm which mostly
produced its goods in the US and sold them in Europe would have_______. -
ANSWERS-DECREASED
6.The chart below reports the dollar price of euro from 2006 to 2020. Based on this
chart, during the 2014 - 2015 period, the net cash flow of a US firm which mostly
produced its goods in Europe and sold them in the US would have_______. -
ANSWERS-INCREASED
If the exchange rate goes from $1.85 per GBP to $1.95 per GBP, then the net cash
flows (profit) of a US based firm which primarily imports its raw material from UK will: -
ANSWERS-DECREASED
If the exchange rate goes from $1.45 per EUR to $1.30 per EUR, then the net cash
flows (profit) of a US based firm which primarily sells its products in Europe will: -
ANSWERS-DECREASED
If the exchange rate goes from JPY 100 per USD to JPY 80 per USD, then the net cash
flows (profit) of a US based firm which primarily exports to Japan will: - ANSWERS-
INCREASED
,If the exchange rate goes from JPY 100 per USD to JPY 120 per USD, then the net
cash flows (profit) of a US based firm which primarily exports to Japan will: -
ANSWERS-DECREASED
If the exchange rate goes from MXN 10 per USD to MXN 8 per USD, then the net cash
flows (profit) of a US based firm which primarily imports from Mexico will: - ANSWERS-
DECREASED
If the exchange rate goes from MXN 10 per USD to MXN 12 per USD, then the net cash
flows (profit) of a US based firm which primarily imports from Mexico will: - ANSWERS-
INCREASED
Assume that Chrysler, a US based firm is purely domestic - with no imports or exports -
is also competing with Japanese auto companies. If during a given period of time, the
US dollar strengthens against Japanese yen, it will cause the net cash flow of Chrysler
to: - ANSWERS-DECREASED
Suppose your firm invests $100,000 in a project in Italy. At the time the exchange rate is
$1.25 = €1.00. One year later the exchange rate is the same, but the Italian government
has expropriated your firm's assets paying only €80,000 in compensation. This is an
example of - ANSWERS-POLITICAL RISK
Suppose your firm invests $100,000,000 in a project in Thailand. At the time the
exchange rate is $1.00 = 10 Thai Baht. One year later the exchange rate is the same,
but the Thai government has expropriated your firm's assets paying only 1 billion Thai
Baht in compensation. This is an example of - ANSWERS-POLITICAL RISK
Suppose you start with $100 and buy a British stock for £50 when the exchange rate is
£1 = $2. One year later, the stock rises to £60. You are happy with your 20 percent
return on the stock, but when you sell the stock and exchange your £60 for dollars, you
only get $45 since the pound has fallen to £1 = $0.75. This loss of value is an example
of - ANSWERS-exchange rate risk.
Suppose you start with $75 and buy a European stock for €50 when the exchange rate
is €1 = $1.5. One year later, the stock rises to €60. You are happy with your 20 percent
return on the stock, but when you sell the stock and exchange your £60 for dollars, you
, only get $66 since the pound has fallen to €1 = $1.10. This loss of value is an example
of - ANSWERS-exchange rate risk.
A typical US worker can produce 1600 units of food or 40 units of clothing per year. A
typical German worker can produce 3,000 units of food or 120 units of clothing per year.
Based on the information given, the theory of comparative advantage suggests that: -
ANSWERS-US will be a net importer of clothing from Germany
A typical US worker can produce 1600 units of food or 40 units of clothing per year. A
typical German worker can produce 3,000 units of food or 120 units of clothing per year.
Based on the information given, the opportunity cost of 1 unit of food in the US is: -
ANSWERS-0.025 units of clothing
A typical US worker can produce 1600 units of food or 40 units of clothing per year. A
typical German worker can produce 3,000 units of food or 120 units of clothing per year.
Based on the information given, the opportunity cost of 1 unit of clothing in the US is: -
ANSWERS-40.00 units of food
A typical US worker can produce 1600 units of food or 40 units of clothing per year. A
typical German worker can produce 3,000 units of food or 120 units of clothing per year.
Based on the information given, the opportunity cost of 1 unit of food in Germany is: -
ANSWERS-0.040 units of clothing
A typical US worker can produce 1600 units of food or 40 units of clothing per year. A
typical German worker can produce 3,000 units of food or 120 units of clothing per year.
Based on the information given, the opportunity cost of 1 unit of clothing in Germany is:
- ANSWERS-25.00 units of food
A typical US worker can produce 1600 units of food or 40 units of clothing per year. A
typical German worker can produce 3,000 units of food or 120 units of clothing per year.
Based on the information given, an exchange rate of 1 clothing = 50 food would be
___________ to the US and ___________ to Germany: - ANSWERS-unacceptable ;
acceptable
A typical US worker can produce 1600 units of food or 40 units of clothing per year. A
typical German worker can produce 3,000 units of food or 120 units of clothing per year.
questions ( frequently tested) Complete
Exam (updated 2026) Study Guide Exam
fully solved With Correct Verified AND
Detailed Solutions & updated 2026
(latest version verified for accuracy) |
2026\2027 Latest!! Update Guarantee
Pass!!!
1.The managers are the agents of the firms, and _________ are its principals. -
ANSWERS-STOCKHOLDERS
2.Assume it is January 20X0. The following table provides a forecast of Zenith Inc's (an
US company) cash receipt in US dollars, Euros and Pesos dollars for January 20X1 and
January 20X2. Also provided are the exchange rate forecasts for Euros and Pesos
during the same time periods.
January 20X1 January 20X2
Receipt Exchange Rate Receipt Exchange Rate
US Dollars 15,000,000 NA 18,000,000 NA
Euros 13,000,000 $1.30 15,000,000 $1.10
Pesos 20,000,000 $0.15 30,000,000 $0.20
,If Zenith's required rate of return is 10%, estimate the value of Zenith's total cash receipt
using the valuation model for an MNC. - ANSWERS-$ 65,198,347
3.The chart below reports the dollar price of euro from 2006 to 2020. Based on this
chart, during the 2006 - 2008 period, the net cash flow of a US firm which mostly
produced its goods in the US and sold them in Europe would have_______. -
ANSWERS-INCREASED
4.The chart below reports the dollar price of euro from 2006 to 2020. Based on this
chart, during the 2006 - 2008 period, the net cash flow of a US firm which mostly
produced its goods in Europe and sold them in the US would have_______. -
ANSWERS-DECREASED
5.The chart below reports the dollar price of euro from 2006 to 2020. Based on this
chart, during the 2014 - 2015 period, the net cash flow of a US firm which mostly
produced its goods in the US and sold them in Europe would have_______. -
ANSWERS-DECREASED
6.The chart below reports the dollar price of euro from 2006 to 2020. Based on this
chart, during the 2014 - 2015 period, the net cash flow of a US firm which mostly
produced its goods in Europe and sold them in the US would have_______. -
ANSWERS-INCREASED
If the exchange rate goes from $1.85 per GBP to $1.95 per GBP, then the net cash
flows (profit) of a US based firm which primarily imports its raw material from UK will: -
ANSWERS-DECREASED
If the exchange rate goes from $1.45 per EUR to $1.30 per EUR, then the net cash
flows (profit) of a US based firm which primarily sells its products in Europe will: -
ANSWERS-DECREASED
If the exchange rate goes from JPY 100 per USD to JPY 80 per USD, then the net cash
flows (profit) of a US based firm which primarily exports to Japan will: - ANSWERS-
INCREASED
,If the exchange rate goes from JPY 100 per USD to JPY 120 per USD, then the net
cash flows (profit) of a US based firm which primarily exports to Japan will: -
ANSWERS-DECREASED
If the exchange rate goes from MXN 10 per USD to MXN 8 per USD, then the net cash
flows (profit) of a US based firm which primarily imports from Mexico will: - ANSWERS-
DECREASED
If the exchange rate goes from MXN 10 per USD to MXN 12 per USD, then the net cash
flows (profit) of a US based firm which primarily imports from Mexico will: - ANSWERS-
INCREASED
Assume that Chrysler, a US based firm is purely domestic - with no imports or exports -
is also competing with Japanese auto companies. If during a given period of time, the
US dollar strengthens against Japanese yen, it will cause the net cash flow of Chrysler
to: - ANSWERS-DECREASED
Suppose your firm invests $100,000 in a project in Italy. At the time the exchange rate is
$1.25 = €1.00. One year later the exchange rate is the same, but the Italian government
has expropriated your firm's assets paying only €80,000 in compensation. This is an
example of - ANSWERS-POLITICAL RISK
Suppose your firm invests $100,000,000 in a project in Thailand. At the time the
exchange rate is $1.00 = 10 Thai Baht. One year later the exchange rate is the same,
but the Thai government has expropriated your firm's assets paying only 1 billion Thai
Baht in compensation. This is an example of - ANSWERS-POLITICAL RISK
Suppose you start with $100 and buy a British stock for £50 when the exchange rate is
£1 = $2. One year later, the stock rises to £60. You are happy with your 20 percent
return on the stock, but when you sell the stock and exchange your £60 for dollars, you
only get $45 since the pound has fallen to £1 = $0.75. This loss of value is an example
of - ANSWERS-exchange rate risk.
Suppose you start with $75 and buy a European stock for €50 when the exchange rate
is €1 = $1.5. One year later, the stock rises to €60. You are happy with your 20 percent
return on the stock, but when you sell the stock and exchange your £60 for dollars, you
, only get $66 since the pound has fallen to €1 = $1.10. This loss of value is an example
of - ANSWERS-exchange rate risk.
A typical US worker can produce 1600 units of food or 40 units of clothing per year. A
typical German worker can produce 3,000 units of food or 120 units of clothing per year.
Based on the information given, the theory of comparative advantage suggests that: -
ANSWERS-US will be a net importer of clothing from Germany
A typical US worker can produce 1600 units of food or 40 units of clothing per year. A
typical German worker can produce 3,000 units of food or 120 units of clothing per year.
Based on the information given, the opportunity cost of 1 unit of food in the US is: -
ANSWERS-0.025 units of clothing
A typical US worker can produce 1600 units of food or 40 units of clothing per year. A
typical German worker can produce 3,000 units of food or 120 units of clothing per year.
Based on the information given, the opportunity cost of 1 unit of clothing in the US is: -
ANSWERS-40.00 units of food
A typical US worker can produce 1600 units of food or 40 units of clothing per year. A
typical German worker can produce 3,000 units of food or 120 units of clothing per year.
Based on the information given, the opportunity cost of 1 unit of food in Germany is: -
ANSWERS-0.040 units of clothing
A typical US worker can produce 1600 units of food or 40 units of clothing per year. A
typical German worker can produce 3,000 units of food or 120 units of clothing per year.
Based on the information given, the opportunity cost of 1 unit of clothing in Germany is:
- ANSWERS-25.00 units of food
A typical US worker can produce 1600 units of food or 40 units of clothing per year. A
typical German worker can produce 3,000 units of food or 120 units of clothing per year.
Based on the information given, an exchange rate of 1 clothing = 50 food would be
___________ to the US and ___________ to Germany: - ANSWERS-unacceptable ;
acceptable
A typical US worker can produce 1600 units of food or 40 units of clothing per year. A
typical German worker can produce 3,000 units of food or 120 units of clothing per year.
