Mock examination: International Finance

Question 1: The foreign exchange position of a forward contract arises at:

A. The forward due date C. The value date
B. The contract date D. None of the above
Question 2: The wide bid-ask spread will be applied for:
A. Large foreign currency transactions
B. Transactions between stable currencies
C. Transactions between hard currencies
D. Transactions in small foreign exchange markets
Question 3: Identify Arbitrage if exchange rates are given:
AUD/USD = 0.8665 - 0.8669
AUD/ USD = 0.8662 - 0.8663
A. Buy AUD at 0.8665 ; sell AUD at 0.8669
B. Buy AUD at 0.8662; sell AUD at 0.8663
C. Buy AUD at 0.8662; sell AUD at 0.8669
D. Buy AUD at 0.8663; sell AUD at 0.8665
Question 4: Which transaction is recorded in nonproduced, nonfinancial assets in Vietnam:
A. Sell Facecbook (US) stock option
B. Buy ownership of natural mineral resources in Russia
C. Kengnam Hanoi lease office for rent
D. Vingroup issues international bonds
Question 5: U.S. embassy in Japan is:
A. The Japanese resident C. Non - resident of all countries
B. The U.S. non - resident D. The U.S. resident
Question 6: Given: Reserve assets decrease by 250 million USD. Central Bank borrows IMF 150
million USD. The value of Reserve assets and Related items is:
A. – 400 million USD C. + 100 million USD
B. + 400million USD D. – 100 million USD
Question 7: Given the following information
Year E(AUD/USD) CPIUSD CPIAUD
2015 0.7785 100 100
2016 0.7795 103.5 104.5

Calculate the real exchange rate and make a comment about the US trade competitiveness
A. 0.9917; the US trade competitiveness is eroded
B. 1.0110; the US trade competitiveness is improved
C. 0.9917; the US trade competitiveness is improved
D. 1.0110; the US trade competitiveness is eroded