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FIN 582 Exam 1 Witte MSU Questions and Answers Guide (already passed) Latest 2025

FIN 582 Exam 1 (Unit 1,2,3,4) Exam Questions and Answers (Latest Update 2025) Verified Answers

FIN 582 Quiz Test Questions with Correct Answers Arbitrage involves key elements - Answer-4 Which of the following is not a key element of arbitrage - Answer-Buy when undervalued, wait, sell when overvalued As locational arbitrage occurs (disregard the bid-ask spread), banks running out of inventory of a currency will raise their prices. - Answer-True When the bid-ask spread is considered, locational arbitrage is possible if and only if the very highest ask price is above the very lo...

FIN 582 Final Exam Questions and Answers All Correct T/F: The volume of core deposits at U.S. banks has been growing in recent years relative to other categories of deposits. - Answer-False T/F: The Truth in Savings Act requires a bank to disclose to its deposit customers, the frequency with which interest is compounded on all interest-bearing accounts. - Answer- True T/F: Research indicates that at least half of all households and small businesses hold their primary checking account ...

FIN 582 Exam 1 Questions and Answers All Correct Theory of Competitive Advantage: - Answer-specialization increases production efficiency Imperfect Markets Theory: - Answer-factors of production are somewhat immobile providing incentive to seek out foreign opportunities Product Cycle Theory: - Answer-as a firm matures, it recognizes opportunities outside its domestic market How firms engage in international business: - Answer-1. international trade (easiest) 2. licensing 3. franchisin...

FIN 582 Chapter 8 Quiz Questions with Correct Answers According to the IFE, if British interest rates are lower than U.S. interest rates a. the British inflation rate will decrease. b. the British pound will appreciate against the dollar. c. the British pound will depreciate against the dollar. d. today's forward rate of the British pound will equal today's spot rate. e. the British pound's value will remain constant. - Answer-b. the British pound will appreciate against the dollar. ...

Fin 582 Chapter 8 Exam Questions and Answers All Correct There is much evidence to suggest that Japanese investors invest in U.S. Treasury securities when U.S. interest rates are higher than Japanese interest rates. These investors most likely believe in the international Fisher effect. - Answer-False The relative form of purchasing power parity (PPP) accounts for the possibility of market imperfections such as transportation costs, tariffs, and quotas in establishing a relationship betwee...

FIN 582 Chapter 7 Quiz Questions with Correct Answers Due to , market forces should realign the spot rate of a currency among banks. a. covered interest arbitrage b. locational arbitrage c. quadratic arbitrage d. triangular arbitrage - Answer-b. locational arbitrage Assume that the interest rate in the home country of Currency X is much lower than the U.S. interest rate. According to interest rate parity, the forward rate of Currency X a. should exhibit a discount. b. should exhibit a p...

Fin 582 Chapter 6 Exam Questions with Correct Answers A weak dollar is normally expected to cause a. high unemployment and high inflation in the U.S. b. low unemployment and high inflation in the U.S. c. low unemployment and low inflation in the U.S. d. high unemployment and low inflation in the U.S. - Answer-b. low unemployment and high inflation in the U.S. Under a freely floating exchange rate system a. exchange rates remain very stable because of offsetting economic conditions. b. c...

Fin 582 Chapter 5 Quiz Questions with Correct Answers The one-year forward rate of the British pound is quoted at $1.50, and the spot rate of the British pound is quoted at $1.515. The forward is percent. a. discount; 1.0 b. discount; 1.5 c. premium; 1.5 d. premium; 1.0 - Answer-a. discount; 1.0 Forward contracts contain a. a right but not a commitment to the owner, and can be tailored to the owner's desire. b. a commitment to the owner, and can be tailored to the owner's desire. c. ...