International Finance Final Exam (Answered) 100% Correct

International Finance Final Exam (Answered) 100% Correct Vada, Inc. exports computers to Australia invoiced in U.S. dollars. Its main competitor is located in Japan. Vada is subject to: a. economic exposure. b. transaction exposure. c. translation exposure. d. economic and transaction exposure. a. Jenco Co. imports raw materials from Japan, invoiced in U.S. dollars. The price it pays is not expected to change for the next several years. If the Japanese yen appreciates, its imports from Japan will probably ____ and if the Japanese yen depreciates, its imports from Japan will probably ____. a. increase; decrease b. decrease; increase c. increase; stay the same d. stay the same; stay the same d. Yomance Co. is a U.S. company that has exposure to Japanese yen and British pounds. It has net inflows of 5,000,000 yen and net outflows of 60,000 pounds. The present exchange rate of the Japanese yen is $.012 while the present exchange rate of the British pound is $1.50. Yomance Co. has not hedged its positions. The yen and pound movements against the dollar are highly and positively correlated. If the dollar strengthens, then Yomance Co. will: a. benefit, because the dollar value of its pound position exceeds the dollar value of its yen position. b. benefit, because the dollar value of its yen position exceeds the dollar value of its pound position. c. be adversely affected, because the dollar value of its pound position exceeds the dollar value of its yen position. d. be adversely affected, because the dollar value of its yen position exceeds the dollar value of its pound position. a. Generally, MNCs with less foreign revenues than foreign costs will be ____ affected by a ____ foreign currency. a. favorably; stronger b. favorably; weaker c. not; stronger d. not; weaker b.