Biology Forums - Study Force

The present value of receiving M dollars in year t when the prevailing interest rate is i is equal to
 a. M - it
  b. M  (1 - i)t
  c. M/(1 + i)t
  d. M  it
  e. M/it

QUESTION 2

If on Tuesday you can buy 125 yen per U.S. dollar and on Wednesday you can buy 120 yen per U.S. dollar,
 a. both the U.S. dollar and the yen have appreciated
  b. both the U.S. dollar and the yen have depreciated
  c. the U.S. dollar has appreciated and the yen has depreciated
  d. the U.S. dollar has depreciated and the yen has appreciated
  e. the yen has appreciated and the U.S. dollar has remained constant

QUESTION 3

If you will receive 5,000 two years from today, what is its present value if the discount rate is 5 percent?
 a. 5,025
  b. 4,500
  c. 3,429
  d. 4,535
  e. 4,762

QUESTION 4

If the U.S. dollar appreciates, it means that
 a. the value of the U.S. dollar has decreased
  b. the value of foreign exchange has increased
  c. fewer U.S. dollars are required to purchase foreign exchange
  d. more U.S. dollars are required to purchase foreign exchange
  e. exports will fall immediately

QUESTION 5

The present value of receiving M dollars two years from now when the prevailing interest rate is i is equal to
 a. M - i2
  b. M  i2
  c. M/i
  d. M/(1 - i)
  e. M/(1 + i)2

QUESTION 6

A German who exchanges euros for dollars in a U.S. airport is
 a. contributing to U.S. exports
  b. lending dollars to Germans
  c. participating in the foreign exchange market
  d. engaging in speculative activities
  e. engaging in illegal activities

QUESTION 7

The present value of a given payment will be lower
 a. if the payment comes sooner than expected
  b. the lower the prevailing interest rate
  c. the further in the future the payment is to be received
  d. the sooner the payment is to be received
  e. if the payment is made in cash

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Ready for finals

Good luck my friend!