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