Involves simultaneously borrowing and lending activities

Assignment Help Financial Management

Reference no: EM13953957

1. The spot and 30 day forward rates for the Dutch guilder are $.3075 and $.3120, respectively. The guilder is said to be selling at a forward

premium of 19.51%

premium of 17.56%

premium of 9.76%

discount of 17.56%

2. A ________ involves simultaneously borrowing and lending activities in two different currencies to lock in the currency's value of a future foreign currency cash flow.

forward contract

currency collar

money-market hedge

currency option

3. If you fear the dollar will rise against the French franc, with a resulting adverse change in the dollar value of the equity of your French subsidiary, you can hedge by

selling francs forward in the amount of net assets

buying francs forward in the amount of net assets

reducing the liabilities of the subsidiary

selling francs forward in the amount of total assets

4. Under FASB 52, most financial statements must be translated using the

monetary/nonmonetary method

current/noncurrent method

current rate method

temporal method

Reference no: EM13953957

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