# Putul only 2 | Business & Finance homework help

Hello Putul,

#### How many pages is this assigment?

Which of the following economic benefits do the foreign exchange markets provide?

 [removed] A mechanism for hedging the risk associated with currency fluctuations.

 [removed] A channel for businesses to acquire credit for international transactions.

 [removed] A mechanism to transfer purchasing power via exports and imports.

The spot rate is the cost of buying a foreign currency

 [removed] a year from today

 [removed] a month from today

If the foreign exchange rate is the price in dollars for a foreign currency, then the exchange rate quote is called:

 [removed] an indirect quote

 [removed] a European quote

Bartman Corporation observes that the Swiss franc (SF) is being quoted at \$0.6164/SF, while the Swedish krona (SK) is quoted at \$0.1981/SK. What is the SK/SF cross rate?

Given that the spot rate is \$1.5276/€ and the 90-day forward quote is \$1.5174/€, we can say that:

 [removed] the dollar is at neither a premium nor a discount against the euro

 [removed] the U.S. dollar is at a forward discount against the euro

 [removed] the U.S. dollar is at a forward premium against the euro

 [removed] the euro is at a forward premium against the U.S. dollar

All of the following represent differences between Eurobonds and domestic US bonds except that

 [removed] many Eurobonds are sold without credit ratings.

 [removed] Eurobonds pay coupon interest annually.

 [removed] investors in Eurobonds regularly pay taxes on the interest they receive.

 [removed] Eurobonds are issued as bearer bonds and do not have to be registered.

All other things remaining constant, if the US\$/£ exchange rate changes from \$1.65/£ to \$1.45/£ , which of the following will occur?

 [removed] Demand for British goods will increase.

 [removed] Demand for British goods will decrease.

 [removed] British demand for US goods will decrease.

Which of the following statements regarding the forward rate is false?

 [removed] Forward rates are important because business transactions may extend over long periods.

 [removed] The forward rate quoted on a particular date is very often equal to the spot rate on the same day.

 [removed] The forward rate is established on the day that the agreement is made and defines the exchange rate that will be used in the future.

 [removed] The forward rate is what one party agrees to pay for money in the future.

The most widely quoted Euro-currency interest rate is the

All of the following represent differences between Eurobonds and domestic US bonds except that

 [removed] investors in Eurobonds regularly pay taxes on the interest they receive.

 [removed] Eurobonds pay coupon interest annually.

 [removed] many Eurobonds are sold without credit ratings.

 [removed] Eurobonds are issued as bearer bonds and do not have to be registered.

Which one of the following statements is TRUE about the effective annual rate (EAR)?

 [removed] The EAR conversion formula accounts for the number of compounding periods and, thus, effectively adjusts the annualized interest rate for the time value of money.

 [removed] The EAR is the true cost of borrowing and lending.

 [removed] All of these are true.

 [removed] The effective annual interest rate (EAR) is defined as the annual growth rate that takes compounding into account.

The true cost of lending is the

 [removed] annual percentage rate.

 [removed] quoted interest rate.

 [removed] effective annual rate.

Which of the following investment classes had the greatest variability in returns for recent historical data?

 [removed] Intermediate-Term Government Bonds

 [removed] Small U.S. Stocks

 [removed] Long-Term Government Bonds

 [removed] Large U.S. Stocks

If a bond’s coupon rate is equal to the market rate, then the bond will sell

 [removed] at a price greater than its face value.

 [removed] at a price less than its face value.

 [removed] none of these are true.

 [removed] at a price equal to its face value.

Payback: Kathleen Dancewear Co. has bought some new machinery at a cost of \$1,250,000. The impact of the new machinery will be felt in the additional annual cash flows of \$375,000 over the next five years. What is the payback period for this project? If their acceptance period is three years, will this project be accepted?