1. If a U.S. firm needs 100,000 euros in 90 days and wishes to avoid the risk from exchange rate fluctuations, it could
a. purchase a 90-day forward contract on euros.
b. purchase euros 90 days from now at the spot rate.
c. sell euros 90 days from now at the spot rate.
d. sell a 90-day forward contract on euros.
2. Assume the Canadian dollar is equal to $.90 and the Argentine peso is equal to $.30. The value of the Canadian dollars is _____ Argentine pesos.
a. 0.25
b. 3
c. 0.3
d. 2
3. ____ is not a bank characteristic important to customers in need of foreign exchange.
a. Forecasting advice
b. Quote competitiveness
c. Size of loan department
d. Advice about current market conditions