A firm that buys foreign exchange in order to take advantage of higher foreign interest rates is

Related MCQs

• The exchange rate mechanism (ERM) crisis in 1992 represents the __________ in German interest rates that caused other European interest rates to __________, and resulted in less aggregate spending.
• An Austrian firm that buys foreign exchange because its managers expect the euro to depreciate is
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• The international Fisher effect suggests that should pound interest rates exceed US dollar interest rates:
• Assume a UK firm uses a forward contract to hedge all of its translation exposure. Also assume that the firm underestimated what its foreign earnings would be. Assume that the foreign currency depreciated over the year. The firm would generate a translation _______, which would be _______ than the gain generated by the forward contract.
• Authority which intervenes directly or indirectly in foreign exchange markets by altering interest rates is considered as
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• A share of the ADR of a Dutch firm represents one share of that firm's stock that is traded on a Dutch stock exchange. The share price of the firm was 15 euros when the Dutch market closed. As the U.S. market opens, the euro is worth $1.10. Thus, the price of the ADR should be _____.
• Based on interest rate parity, the larger the degree by which the foreign interest rate exceeds the UK interest rate, the:
• When a firm perceives that a foreign currency is ________, the firm may attempt direct foreign investment in that country, as the initial outlay should be relatively _______.