-A Currency Call Option:

a. provides the right to buy a specific currency at exercise price.

b. It is used to hedge future payables.

c. Can be purchased on an exchange.

d. A and B

e. A and C

f. All the Above

2-A syndicate loan issued in the international credit market is tied to LIBOR (London interbank offer rate).

(True /False)

 3-The Balance of Payments is a summary of transactions between domestic and foreign residents of a specific country ov er a specified period. (True /False)

4-Inflation affects international trade flows. (True /False)

5-Futures contracts are:

a. highly standardized

b. traded on an exchange

c. can be privately negotiated

d. a and b

e. a and c

 6-CROLO, Inc. is a U.S.-based MNC that frequently imports raw materials from Canada. CROLO is typically invoiced for these goods in Canadian dollars and is concerned that the Canadian dollar will appreciate soon. Which of the following is not an appropriate hedging technique under these circumstances?

a. Purchase Canadian Dollars Forward

b. Purchase Canadian dollar Future Contracts

c. Purchase Canadian Dollar Put Options

d. Purchase Canadian Dollar Call Options

Answer rating: 100% (QA)

The detailed answer for the above question is provided below e A and C a Correct A currency call option gives the holder the right to buy a specific c... View the full answer