Test_bank_International_Finance_MCQ_(word)Chap_6WS

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1、FundamentalsofMultinationalFinance,3e(Moffett)15Chapter615InternationalParityConditions156.115MultipleChoiceandTrue/FalseQuestions151)15Ifanidenticalproductcanbesoldintwodifferentmarkets,andnorestrictionsexistonthesaleortransportationcosts,theproduct'spriceshouldbethesameinbothmarkets.Thisi

2、sknowas15A)15relativepurchasingpowerparity.15B)15interestrateparity.15C)15thelawofoneprice.15D)15equilibrium.15Answer:15C15Topic:15TheLawofOnePrice15Skill:15Recognition152)15________statesthatthespotexchangerateisdeterminedbytherelativepricesofsimilarbasketsofgoods.15A)15Absolutepurchasingp

3、owerparity15B)15Relativepurchasingpowerparity15C)15Interestrateparity15D)15TheFisherEffect15Answer:15A15Topic:15PPP15Skill:15Recognition153)15TheEconomistpublishesannuallythe"BigMacIndex"bywhichtheycomparethepricesoftheMcDonald'sCorporation'sBigMachamburgeraroundtheworld.Theindexestimatesth

4、eexchangeratesforcurrenciesbasedontheassumptionthattheburgersinquestionarethesameacrosstheworldandtherefore,thepriceshouldbethesame.IfaBigMaccosts$2.54intheUnitedStatesand294yeninJapan,whatistheestimatedexchangerateofyenperdollarashypothesizedbytheHamburgerindex?15A)15$0.0086/¥15B)15124¥/$1

5、5C)15$0.0081/¥15D)15115.75¥/$15Answer:15D15Topic:15PPP15Skill:15Analytical154)15Ifthecurrentexchangerateis113JapaneseyenperU.S.dollar,thepriceofaBigMachamburgerintheUnitedStatesis$3.41,andthepriceofaBigMachamburgerinJapanis280yen,thenotherthingsequal,theBigMachamburgerinJapanis________.15A)

6、15correctlypriced15B)15underpriced15C)15overpriced15D)15notenoughinformationtodetermineifthepriceisappropriateornot15Answer:15B15Topic:15PPP15Skill:15Analytical155)15ThepriceofaBigMacintheU.S.is$3.41andthepriceinMexicoisPeso29.0.WhatistheimpliedPPPofthePesoperdollar?15A)15Peso8.50/$115B)15P

7、eso10.8/$115C)15Peso11.76/$115D)15Noneoftheabove15Answer:15A15Topic:15PPP15Skill:15Analytical156)15TheimpliedPPPrateofexchangeofMexicanPesosperU.S.dollaris8.50accordingtotheBigMacIndex.ThecurrentexchangerateisPeso10.8/$1.Thus,accordingtoPPPandtheLawofOne