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Beezus Beezus
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Posts: 339
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6 years ago
If the exchange rate changes from 20 cents per franc to 18 cents per franc, the U.S. dollar has
 a. appreciated, since its value has increased
  b. appreciated, since its value has declined
  c. depreciated, making French goods more expensive in U.S. dollars
  d. depreciated, since its value has declined
  e. depreciated, since its value has increased

QUESTION 2

If the discount rate is 5 percent, the present value of annual 100,000 payments in perpetuity (i.e., continued indefinitely into the future) is
 a. 2,000,000
  b. 1,246,296
  c. 1,000,000
  d. 976,463
  e. infinite

QUESTION 3

If on Monday you can buy 13 Mexican pesos per U.S. dollar and on Wednesday you can buy 15 Mexican pesos per U.S. dollar,
 a. both the U.S. dollar and the Mexican peso have appreciated
  b. both the U.S. dollar and the Mexican peso have depreciated
  c. the U.S. dollar has appreciated and the Mexican peso has depreciated
  d. the U.S. dollar has depreciated and the Mexican peso has appreciated
  e. the Mexican peso has appreciated and the U.S. dollar has remained constant

QUESTION 4

A firm is considering the purchase of a piece of equipment that will add 200 per year to the firm's revenue forever. If the interest rate is 10 percent, the firm will purchase the equipment so long as it costs less than
 a. 1,000
  b. 2,000
  c. 4,000
  d. 6,000
  e. 8,000

QUESTION 5

From the U.S. perspective, a drop in the price of foreign exchange means that
 a. fewer U.S. dollars are needed to purchase foreign currency
  b. more U.S. dollars are needed to purchase foreign currency
  c. worldwide, imports will become more expensive
  d. worldwide, exports will become cheaper
  e. transaction costs on international markets will decrease

QUESTION 6

The present value of an annuity that pays 100 each year indefinitely (i.e., a perpetuity) is 2,000 if the interest rate is 5 percent.
 a. True
  b. False

QUESTION 7

A drop in dollar price of British pounds means that
 a. fewer dollars are needed to buy British pounds
  b. more dollars are needed to buy British pounds
  c. the mark has appreciated
  d. the dollar has depreciated
  e. British goods are now more expensive to Americans
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Fleur-de-lisFleur-de-lis
wrote...
6 years ago
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Beezus Author
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6 years ago
tremendous help
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