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1. The Fisher Effect assumes that the

A. inflation rate is equal to the real interest rate

B. nominal interest rate is equal to the inflation rate

C. nominal interest rate is lower than the inflation rate

D. nominal interest rate is equal to the real interest rate plus the inflation rate

E. real interest rate is equal to the nominal interest rate

2. What is price quotation?

A. 1 USD exchanges an amount of foreign currency

B. An amount of foreign currency exchange one home currency

C. 1 foreign currency exchanges an amount of home currency

D. The value of 1 home currency

3. J curve effect shows:

A. Balance of trade is deteriorated and then, it gets better due to weak home currency
solution.

B. Balance of trade is affected by interest rates.

C. All are wrong.

D. Weak home currency solution trend to increase inflation rate.

4. A currency call option gives the:

A. seller the right to buy the currency futures contracts

B. broker the right to buy the underlying currency

C. buyer the right to buy the underlying currency

D. seller the right to sell the underlying currency

E. none of the above

5. Which of the following factors affect international direct investment capital

A. Government limits B. All 3 are correct
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C. Political risk D. War

6. The forward contract

A. Supply the right buying a certain currency at a specified price

B. Supply right selling a certain currency and standardized

C. Include the responsibilities of parties who must fulfil their contractual obligations

D. Include the responsibilities of parties and standardized

7. Forreign exchange quotation: GBP/USD = 1.2205 – 1.2212; EUR/USD = 1.1105 -

1.1109; GBP/EUR = 1.1017 – 1.022. Does arbitrage exist? If yes, calculate the profit.
Initial capital: 200.000 USD.
A. Yes, 376.5 USD C. Yes, 366.5 USD

B. No D. Yes, - 642,6 USD

8. The purchasing power parity says:

A. All are correct

B. The cost of a haircut in HK is exactly the same as the cost of a haircut in Vietnam.

C. Inflation rates are the same across countries.

D. All are wrong

9. What is the result of comparing the prices of foreign and domestic goods?
A. CIA exchange rate C. PPP exchange rate

B. Relative purchasing power parity D. IFE exchange rate

10. ABC has headquarter in the U.S, they usually import raw materials from Chinese.
ABC do payment in CNY, and they speculator CNY will be increased in future,
which is their option?
A. Buy the call option. C. Buy the put option.

B. Buy CNY forward contract. D. Buy CNY future contract.

11. Other factors are held constant, and the USD/VND exchange rate is free to fluctuate,
how would the value of VND against USD change if the inflation in Vietnam is
higher than that of the US?
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A. Increases C. Decreases

B. Other answers D. Does not change

12. Which is correct:

A. The future and forward contract is mainly used for speculation

B. The forward contract is mainly applied by speculators, the future market is used for
hedging.

C. The future contract is mainly applied by speculators; the forward market is used for
hedging.

D. The future and forward contract is mainly used for hedging.

13. The official BOP report is prepared periodically for

A. Yearly C. Quarterly

B. Monthly D. Half yearly

14. Which arbitrage need to calculate cross rate:

A. Covered interest arbitrage C. All are correct.

B. Triangular arbitrage D. Locational arbitrage

15. What behavior makes CIA persisted:

A. Interest rate arbitrage C. Borrowing

B. Investment D. Other answers

16. Which of the following theories that motivate firms to expand their business
internationally?
A. Product cycle theory C. All of them

B. Theory of comparative advantage D. Imperfect markets theory

17. Factors effect to BOP

A. Inflation C. Restriction of government

B. All of them D. Exchange rate

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18. A strike price in currency options markets is the specified exchange rate at which
the:
A. option can be bought D. none of the above

B. option can be sold E. futures options can be sold

C. option can be exercised

19. The theory of interest rate parity means that the:

A. difference between the spot rate and the future spot rate reflects the interest rate
difference between two countries

B. interest rates are equal two countries

C. future spot rate reflects the inflation difference two countries

D. difference between a forward rate and a spot rate equals the difference between a
domestic interest rate and a foreign interest rate

E. all the above

20. The purchasing power parity theory states that:

A. Interest rates are always greater than inflation rates.

B. A currency with a high inflation rate has a higher interest rate.

C. A currency with a high inflation rate tends to depreciate.

D. Exchange rate differentials reflect inflation differentials.

21. A company in the U.S exports products to Germany and they will receive payment 3
month later. On 1 June 2022, Spot rate: EUR/USD = 1.12; 3 months forward rate:
EUR/USD = 1.10. A deal with bank to sell forward contract 200,00 EUR. On 1 Sept
2022, Spot rate EUR/USD = 1.15. Calculating the revenue in EUR?
A. 220,000 C. 230,000

B. 224,000 D. 200,000

22. Franchising is:

A. Transferring the production process in exchange for free
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B. Allowing an organization/individual to use your brand, your prestige in exchange for

fee.

C. All are correct.

D. Control the quality of product/services under your own brand.

23. When the VND deposit interest rate is lower than the interest rate invested in USD
then convert into VND, the investor should
A. Invest in VND C. Invest in USD and then convert to
VND
B. All wrong
D. Do not invest

24. What factors cause CIA be maintained?

A. All are correct C. Government intervention

B. Transaction costs D. All are wrong

25. Which of the following transactions generates foreign currency supply:

A. Importing cars C. Foreign investors investing money
in Vietnam
B. Increasing reserves
D. Reducing foreign debt

26. Assume that: Interest rate USD = 2,5%/year; Interest rate CHF = 5,3%/year.
Premium/discount U.S investors will receive after 1 year (IRP exist)
A. 2.66% C. 0.0266%

B. 0.0266 D. -0.0266

27. The cross rate:

A. None of them

B. Exchange rate which is determined between USD and another currency.

C. Exchange rate between two currencies that are both valued against a third currency.

D. Exchange rate which is determined between any two currencies.

28. Licensing is:

A. Hard to control the quality of product under your own brand.
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B. All are correct.

C. Allowing an organization/individual to use your brand, your prestige on their product.

D. Conduct in international market without major investment.

29. A forward market hedge involves the following except:

A. commercial banks D. future spot rate

B. forward rate E. forward contract

C. a fixed amount of foreign currency

30. If calculated by 1 common currency, the Law of One Price states that the price of
goods in the world will be:
A. Difference C. Approximate Equilibrium

B. A chance for arbitrage to happen D. Equilibrium

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31. Which of the following is a weakness of the absolute form of purchasing power
parity theory?
A. The respected assumption of the law of one price

B. Compare the price of a basket of goods in local currency and the price of a basket of
goods in foreign currencie

C. The difference in education level

D. The proportion of goods in the basket

32. Net income is an item of:

A. Operations balance C. Current balance

B. Capital balance D. Trade balance

33. If the inflation rate at the end of 2022 for VND and USD is 18.6% and 3%. What is
the exact percentage change in the USD exchange rate after 3 months?
A. - 3.72% C. 3.87%

B. – 3.9% D. 3.9%

I h−I f
N
+I
n f

34. If the spot rate of the Malaysian ringgit is $.30 and the six month forward rate of the
ringgit is $.32, what is the forward premium or discount on an annual basis?
A. premium; about 14.5% D. premium; about 13.3%

B. discount; about 13.3% E. discount; about 14.5%

C. premium; about 16.7%

35. A currency futures call option gives:

A. the seller the obligation to sell a particular underlying currency

B. the buyer the right to buy a particular currency futures contract

C. the seller the right to sell a particular currency futures contract

D. the buyer the obligqation to buy a particular currency futures contract

3.
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E. none of the above

36. Points above the IRP line show:

A. CIA is not feasible for all investos. C. IRP exist.

B. CIA is feasible for domestic D. CIA is feasible for foreign

investors. investors.

37. If the inflation rate at the end of 2022 for VND and USD is 12% and 4%. The spot
exchange rate is USD/VND = 22,950. What is the expected spot exchange rate of
USD/VND after 3 months?
A. 23,305 C. 22,226

B. 23,404 D. 22,504

N
+I
n h
S×
N
+I
n f

38. A currency futures put option gives

A. the buyer the obligation to sell a particular currency futures contract

B. the buyer the right to sell a particular currency futures contract

C. the seller the right to sell a particular currency futures contract

D. both the seller and the buyer to sell a particular currency futures contract

E. the seller the right an underlying currency

39. One of the reason motivating FDI come in a country:

A. Higher interest rate in investment C. All are wrong
recipient country.
D. Foreign exchange rate increase
B. A and B are true

3.