1. Usually the low interest rate currency trades at a ______ to the high interest rate currency in the forward market.
( W' @2 l# Y6 m A. premium
3 g R( U( _$ ?5 I. p B. par8 C! y* w' h: N
C. discount
0 j# V, z/ P! @5 y& Z, Y D. bar 2. Which of the following statements about standby letters of credit is true? ______.
) X6 l" I3 _, u% w* m A. They can serve as a guarantee to a buyer against a seller defaulting9 h: y$ s' S+ O- @
B. They are contrary to the general rule that letters of credit may only be used for the actual movement of goods
) s) ?( J7 d/ Q" E$ c5 l6 j0 ~1 L C. They are unlike a tender (or other) bond in their legal standing and method of operation
4 Q4 Z6 G' S2 H) c+ p* d3 p D. They are unlike a tender bond with its fixed expiry date 3. The most liquid of all assets is ______.
3 K i, B. l, X1 }0 W A. the stock of commercial banks
! Q3 x [, o+ u B. M 1- M& n4 `$ Y f7 j% A
C. intelligence
$ n# W0 `9 P, }/ x D. the debt of major corporations 4. Beta and standard deviation differ as risk measures in that beta measures ______.
: g- G p) r# \5 r! R) } A. only unsystematic risk, while standard deviation measures total risk+ Y W8 ?9 g4 ^3 ~/ h: X7 C) p
B. only systematic risk, while standard deviation measures total risk- B b, O6 Z* J! W( ~/ H- O( ]
C. both systematic and unsystematic risk, while standard deviation measures only unsystematic risk/ ^5 m: C" W+ _ x: p1 a3 ^
D. both systematic and unsystematic risk, while standard deviation measures only systematic risk5. What information would you find in a statement of cash flows that you would not be able to get from the other two primary financial statements? ______.
; x& Q& c. A9 w8 l9 \# T5 U! N# b A. Cash provided by or used in financing activities, H ^3 Y8 R+ _; d4 x9 `, j' P
B. Cash balance at the end of the period/ T( r0 o5 \$ U7 `* h
C. Total liabilities due to creditors at the end of the period, _ Y7 [9 ?& V/ ^) Q* l* p
D. Net income 6. An analyst estimates that a stock has the following probabilities of return depending on the state of the economy: |