HW 11

1. True
2. D. a debit in the US current account
3. C. foreign credits not yet received
4. B. we sum the items above the line, which are financed by transactions below the line
5. C. birthday money from your aunt who lives in Thailand
6. False
7. B. Financial account items
8. A. is entered for exported goods
9. D. the current account
10. C. income from investment account
11. C. the US Department of Commerce
12. C. balance of payments
13. D. implies the country is a net borrower with the rest of the world
14. D. all of the above
15. False
16. A. then the current and financial accounts exactly balance
17. E. a, b, and c
18. -251
19. 13420
20. Yes

HW 12
1. B. 0.87 euro per dollar
2. C. 6.1196
3. C. the exchange rate
4. D. none of the above
5. C. Great Britain
6. A. 4000 billion
7. A. undervalued
8. A. hedging
9. A. exceeds the exercise price
10. C. arbitrage
11. False
12. D. all of the above
13. A. forward contract
14. A. the UK
15. E. all of the above
16. True
17. True
18. C. swap
19. A. 0.04218
20. C. 0.099