5. (T or F) According to our discussion in class, MNCs that use fundamental forecasting...

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Finance

5. (T or F) According to our discussion in class, MNCs that use fundamental forecasting believe the market is semi-strong form efficient.

6. If profitable triangular arbitrage opportunities exist, then_____.

7. Relative to a MNC, mitigating agency costs will be______.

8. (T or F) The Bretton Woods Agreement was in response to the perception that the dollar was misvalued and allowed exchange rates to fluctuate 2.25% in either direction.

12. The greater the variability of a currency, the __ will be the premium of a call option on this currency, and the __ will be the premium of a put option on this currency, other things equal.

a. greater; lower

b. lower; lower

c. lower; greater

d. greater; greater

14. Suppose you sold 2 Euro call options with a strike price of $1.28 and 3 Euro put options at a strike price of $1.25. The premium for a single call option was $0.056 while the premium for a single put option was $0.039. What are the two break even points of this combined strategy?

a. $1.02 and $1.509

b. $1.124 and $1.465

c. $1.139 and $1.428

d. $1.174 and $ 1.395

e. $1.211 and $1.336

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