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Deakin MAF 306 Final UPDATED Exam Questions and CORRECT Answers
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Deakin MAF 306 Final UPDATED Exam Questions and CORRECT Answers Which of the following make major differences between international and domestic financial management? A) Political risk. B) Foreign exchange risk. C) Corporate governance. D) All of the above - CORRECT ANSWER- D) All of the ...

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  • September 12, 2024
  • 23
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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Deakin MAF 306 Final UPDATED Exam
Questions and CORRECT Answers
Which of the following make major differences between international and domestic financial
management?


A) Political risk.


B) Foreign exchange risk.


C) Corporate governance.


D) All of the above - CORRECT ANSWER- ✔✔D) All of the above


The multinational financial system does NOT enable companies to __________.


A) avoid currency controls


B) reduce taxes


C) access lower cost financing sources


D) avoid exchange rate risk - CORRECT ANSWER- ✔✔D) avoid exchange rate risk


Suppose, on Friday, July 13, 2012, the GBP was worth A$1.5000. Over the weekend the GBP
revalued to A$1.5300. By how much had the GBP changed against the A$?


A) +2.00%


B) -2.00%

,C) +1.96%


D) -1.98% - CORRECT ANSWER- ✔✔A) +2.00%


_________ is another name for the complete replacement of the local currency with the U.S.
dollar.


A) Seignorage


B) Dollarization


C) Depreciation


D) Appreciation - CORRECT ANSWER- ✔✔B) Dollarization


Australian dollar would go up because:


A) The Australian budget surplus for 2018 is predicted to be $3 billion higher than the last
year


B) The credit ratings of several large US banks have been downgraded


C) A businessman has borrowed A$2.5 billion to finance the take over of National Bank of
Australia (NAB)


D) All of the above - CORRECT ANSWER- ✔✔D) All of the above


Which of the following statements is correct?


A) LIBOR is always set at a margin above LIBID

, B) LIBID is always set at a margin above LIBOR


C) There is no systematic relationship between LIBOR and LIBID


D) LIBOR and LIBID are on average equal - CORRECT ANSWER- ✔✔A) LIBOR is
always set at a margin above LIBID


On 29th September, 2017, you noticed that the London interbank offer rate (LIBOR in USD)
in London for 6 months maturity is 1%, while the Islamic interbank benchmark rate (IIBR in
US$) in Makkah for the corresponding maturity is 1.20%. Being an arbitrager, you want to
take advantage of this pricing anomaly in the two interbank markets. Using a hypothetical
notional amount of $10 million (and assuming a transaction cost of 0.05%), your calculated
profit from this arbitrage would be _________.


A) US$1,500


B) US$2,000


C) US$15,000


D) US$20,000 - CORRECT ANSWER- ✔✔C) US$15,000


Euro credits are:


A) Bank loans to MNCs and others denominated in a currency other than that of the country
where the bank is located.


B) Typically variable rate and tied to the LIBOR.


C) Usually for maturities of six months or less.


D) All of the above are true. - CORRECT ANSWER- ✔✔D) All of the above are true.

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