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MBA 620 Midterm Exam Actual Exam Newest
2025/2026 Complete Questions And Correct Detailed
Answers (Verified Answers) |Brand New Version!!
The 180-day forward rate for the euro is $1.34, while the current spot
rate of the euro is $1.29. What is the annualized forward premium or
discount of the euro? - ANSWER-7.75% premium
The annualized forward premium on the euro is 7%. What is the 90-day
forward rate on the euro if the spot rate today is $1.25? - ANSWER-
$1.27
Assume that a speculator purchases a put option on British pounds (with
a strike price of $1.50) for $.05 per unit. A pound option represents
31,250 units. Assume that at the time of the purchase, the spot rate of the
pound is $1.51 and continually rises to $1.62 by the expiration date. The
highest net profit possible for the speculator based on the information
above is: - ANSWER--$1,562.50.
The spot rate of British pound is quoted at $1.49. The 90-day forward
rate exhibits a 2% discount. What is the 90-day forward rate of the
pound? - ANSWER-$1.46
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The 90-day forward rate for the euro is $1.07, while the current spot rate
of the euro is $1.05. What is the annualized forward premium or
discount of the euro? - ANSWER-7.6 percent premium
If your firm expects the euro to substantially depreciate, it could
speculate by ____ euro call options or ____ euros forward in the forward
exchange market. - ANSWER-selling; selling
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? -
ANSWER-$47,500
Which of the following is the most likely strategy for a U.S. firm that
will be receiving Swiss francs in the future and desires to avoid
exchange rate risk (assume the firm has no offsetting position in francs)?
- ANSWER-sell a futures contract on francs.
Countries that have adopted the euro must agree on a single ____ policy.
- ANSWER-monetary
Which of the following is not a reason for devaluation of a currency? -
ANSWER-high inflation.
MBA 620 Midterm Exam Actual Exam Newest
2025/2026 Complete Questions And Correct Detailed
Answers (Verified Answers) |Brand New Version!!
The 180-day forward rate for the euro is $1.34, while the current spot
rate of the euro is $1.29. What is the annualized forward premium or
discount of the euro? - ANSWER-7.75% premium
The annualized forward premium on the euro is 7%. What is the 90-day
forward rate on the euro if the spot rate today is $1.25? - ANSWER-
$1.27
Assume that a speculator purchases a put option on British pounds (with
a strike price of $1.50) for $.05 per unit. A pound option represents
31,250 units. Assume that at the time of the purchase, the spot rate of the
pound is $1.51 and continually rises to $1.62 by the expiration date. The
highest net profit possible for the speculator based on the information
above is: - ANSWER--$1,562.50.
The spot rate of British pound is quoted at $1.49. The 90-day forward
rate exhibits a 2% discount. What is the 90-day forward rate of the
pound? - ANSWER-$1.46
, 2|Page
The 90-day forward rate for the euro is $1.07, while the current spot rate
of the euro is $1.05. What is the annualized forward premium or
discount of the euro? - ANSWER-7.6 percent premium
If your firm expects the euro to substantially depreciate, it could
speculate by ____ euro call options or ____ euros forward in the forward
exchange market. - ANSWER-selling; selling
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? -
ANSWER-$47,500
Which of the following is the most likely strategy for a U.S. firm that
will be receiving Swiss francs in the future and desires to avoid
exchange rate risk (assume the firm has no offsetting position in francs)?
- ANSWER-sell a futures contract on francs.
Countries that have adopted the euro must agree on a single ____ policy.
- ANSWER-monetary
Which of the following is not a reason for devaluation of a currency? -
ANSWER-high inflation.
