1、1.An increase in a nations financial liabilities to foreign residents is a:A.reserve inflow.B.reserve outflow.C.capital imports.D.capital exports.2.Which of the following is considered a capital inflow?A.A sale of U.S. financial assets to a foreign buyerB.A loan from a U.S. bank to a foreign borrowe
2、rC.A purchase of foreign financial assets by a U.S. buyerD.A U.S. citizens repayment of a loan from a foreign bank3.In a countrys balance of payments, which of the following items will be recorded as a debit entry?A.Domestic bank balances owned by foreigners are reducedB.Foreign bank balances owned
3、by domestic residents are reducedC.Assets owned by domestic residents are sold to nonresidentsD.Securities are sold by domestic residents to nonresidents4.When a U.S. resident increases her holdings of a foreign financial asset, this item is recorded as a:A.credit entry in the U.S. current account.B
4、.debit entry in the U.S. current account.C.credit entry in the U.S. capital account.D.debit entry in the U.S. capital account.5.Which of the following would tend to contribute to a U.S. current account surplus?A.The United States makes a unilateral tariff reduction on imported goods.B.The United Sta
5、tes cuts back on American military personnel stationed in Japan.C.U.S. tourists travel in large numbers to Asia.D.Russian vodka becomes increasingly popular in the United States.6.A country experiencing a current account surplus:A.needs to borrow internationally.B.is able to lend internationally.C.m
6、ust also have had a surplus in its overall payments balance.D.spends more than it earns on its merchandise and service trade, international income payments and receipts and international transfers.7. .A nation is considered to be a(n) _ in the international market, if its current account is in defic
7、it.A.importerB.exporterC.borrowerD.lender8.A nation is called a lender if:A.its financial account is in deficit during a time period.B.its current account is in surplus during a time period.C.its current account is in deficit during a time period.D.its net stock of foreign assets is positive.9.A nat
8、ion is called a creditor if:A.it provided financial assets to other countries.B.its net stock of foreign assets is positive.C.its current account is in surplus during a time period.D.its current account is in deficit during a time period.10.The international investment position of a country shows:A.
9、its stocks of international assets during a time period.B.its stocks of international liabilities during a time period.C.its stocks of international assets and liabilities at a point in time.D.whether its current account is in deficit or surplus at a point in time.11. If the price of British pounds
10、in terms of the U.S. dollars is $1.80 per pound, then the price of U.S. dollars in terms of British pounds is:A.1.80 per dollar.B.0.555 per dollar.C.0.90 per dollar.D.3.60 per dollar.12.Rapid increases in the U.S. exports of goods and services will result in a(n) _ foreign currency and a(n) _ the U.
11、S. dollars in the foreign exchange market.A.increase in the demand for; increase in the supply ofB.increase in the supply of; increase in the demand forC.shortage of; surplus ofD.decrease in the supply of; decrease in the demand for13.An increase in the U.S. imports of goods and services from the EU
12、 countries will result in a(n) _ euro and a(n) _ the U.S. dollars in the foreign exchange market.A.increase in the supply of; increase in the demand forB.decrease in the demand for; decrease in the supply ofC.surplus of; shortage ofD.increase in the demand for; increase in the supply of14.Assume you
13、 are a Chinese exporter and expect to receive $250,000 at the end of 60 days. You can remove the risk of loss due to a devaluation of the dollar by:A.selling dollars in the 60-day forward exchange market.B.buying dollars now and selling these dollars at the end of 60 days.C.selling the yuan equivale
14、nt in the forward exchange market for 60-day delivery.D.keeping the dollars in the United States after they are delivered to you.15.Assume you are an American importer who must pay 500,000 Euros at the end of 90 days when you receive 1,000 cases of French wine at your warehouse in New York. Suppose
15、that you have not covered this transaction in the forward market, in which of the following cases will you suffer the largest loss?A.The euro spot exchange rate value vis-vis the dollar does not changeB.The euro (spot) initially appreciates by 2 percent, and then depreciates by 1 percentC.The euro (
16、spot) initially depreciates by 3 percent, and then appreciates by 2 percentD.The euro (spot) initially appreciates by 3 percent, and then depreciates by 2.9 percent16.A _ gives the holder the right but not the obligation to sell a foreign currency at some time in the future at a price set today.A.fo
17、rward exchange contractB.currency swapC.put optionD.call option17.Which of the following financial instruments provides a buyer the right (but not the obligation) to purchase or sell a fixed amount of currency at a prearranged price, within a few days to a few years?A.Letter of creditB.Currency opti
18、onC.Currency swapD.Forward contract18.An investment is _ if it is fully hedged against exchange-rate risk.A.coveredB.uncoveredC.speculativeD.risk neutral19.For an investor who starts with dollars and wants to end up with dollars in the future, which of the following choices is an example of a covere
19、d international investment?A.Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and sign a forward exchange contract to buy the foreign currencyB.Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instru
20、ments, and sign a forward exchange contract to buy dollarsC.Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and then buy dollars at the future spot rateD.Buy a dollar-denominated financial asset20.For an investor who starts with dollars and w
21、ants to end up with dollars in the future, which of the following choices is an example of an uncovered international investment?A.Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and sign a forward exchange contract to buy the foreign currenc
22、yB.Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and sign a forward exchange contract to buy dollarsC.Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and then buy dollars at the futu
23、re spot rateD.Buy a dollar-denominated financial asset21.The covered interest differential is _ the sum of the forward premium on a currency and the interest rate differential.A.approximately equal toB.more thanC.exactly equal toD.less than22.The exchange rate value of a foreign currency is _ in the
24、 short run by a rise in the expected future spot exchange rate value.A.raisedB.loweredC.made volatileD.not affected23._ is buying a countrys currency spot and selling that countrys currency forward, to make a net profit from the combination of the difference in interest rates between countries and the forward premium on the countrys currency.A.Covered interest arbitrageB.Uncovered interest arbitrageC.Covered interest parityD.Uncovered interest parity
