1. A US-based MNC expects to receive $20,000 from domestic operations and 20,000 British pound (£) from a business in England. If the pound’s value is $1.25, the expected total dollar cash flow are: (a) $41,000 (b) $36,000 (c) £46,000 (d) £45,000 2. Relatively high Lebanese inflation may result in an increase in the supply of Lebanese pound for sale and a reduction in the demand for Lebanese pound. (a) True (b) False 3. The premium of a currency call option will increase if: (a) The volatility of the underlying asset foes up. (b) The spot rate goes down. (c) The time to maturity goes down.
1. A US-based MNC expects to receive $20,000 from domestic operations and 20,000 British pound (£) from a business in England. If the pound’s value is $1.25, the expected total dollar cash flow are: (a) $41,000 (b) $36,000 (c) £46,000 (d) £45,000 2. Relatively high Lebanese inflation may result in an increase in the supply of Lebanese pound for sale and a reduction in the demand for Lebanese pound. (a) True (b) False 3. The premium of a currency call option will increase if: (a) The volatility of the underlying asset foes up. (b) The spot rate goes down. (c) The time to maturity goes down.
Chapter1: Multinational Financial Management: An Overview
Section: Chapter Questions
Problem 23QA
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MCQ & True/false : International
1. A US-based MNC expects to receive $20,000 from domestic operations and 20,000 British pound (£) from a business in England. If the pound’s value is $1.25, the expected total dollar cash flow are:
(a) $41,000
(b) $36,000
(c) £46,000
(d) £45,000
2. Relatively high Lebanese inflation may result in an increase in the supply of Lebanese pound for sale and a reduction in the demand for Lebanese pound.
(a) True (b) False
3. The premium of a currency call option will increase if:
(a) The volatility of the underlying asset foes up.
(b) The spot rate goes down.
(c) The time to maturity goes down.
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