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The North Korean army ____________________ the South Korean Army.

In a forward hedge, if the forward rate is an accurate predictor of the future spot rate, the expected real cost of hedging payables assuming away transaction costs will be:

Mercury Co. has a subsidiary based in Italy and is exposed to translation exposure. Mercury forecasts that its earnings next year will be €10 million. Mercury decides to hedge the expected earnings by selling €10 million forward. During the next year, the euro appreciated. Mercury’s consolidated earnings were ____ affected by the euro’s movement, and Mercury’s hedge position was ____ affected by the euro’s movement.

A weak dollar is normally expected to cause:

Bank A quotes a bid rate of $.300 and an ask rate of $.305 for the Malaysian ringgit (MYR). Bank B quotes a bid rate of $.306 and an ask rate of $.310 for the ringgit. What will be the profit for an investor who has $500,000 available to conduct locational arbitrage?

In the Battle of Britain

Assume a Swiss firm invoices exports to the U.S. in U.S. dollars.  Assume that the forward rate and spot rate of the Swiss franc are equal.  If the Swiss firm expects the U.S. dollar to __________ against the franc, it would likely wish to hedge.  It could hedge by __________ dollars forward.

If the Singapore dollar appreciates against the U.S. dollar over this year, the consolidated earnings of a U.S. company with a subsidiary in Singapore will be ____ as a result of the exchange rate movement.

Assume a central bank exchanges its currency for other foreign currencies in the foreign exchange market, but does not adjust for the resulting change in the money supply. This is an example of:

If a drawing has a scale of 1/8″ = 1′, a line that is 1 1/8″ long will represent __________ on the drawing.