What is the Net Present Value of this series of annual cash flows at an interest rate of 10% per year: Year 0:<$25,000>, Year 1: $2,000, Year 2: $0, Year 3: $15,000, Year 4 $0, Year 5 $18,000? (Note that the <> are used to indicate a negative number).
Answer(s): A
On the BAII Plus, press CF 2nd CLRWork 25000 +/- ENTER DownArrow 2000 ENTER DownArrow DownArrow 0 ENTER DownArrow DownArrow 15000 ENTER DownArrow DownArrow 0 ENTERDownArrow DownArrow 18000 ENTER DownArrow DownArrow 2nd Quit. Then press NPV 10 ENTER DownArrow CPT. On the HP12C, press these keys: 25000 CHS BlueShift CFo 2000 BlueShift CFj 0 BlueShift CFj 15000 BlueShift CFj 0 BlueShift CFj 18000 BlueShift CFj. Then press 10 i, YellowShift NPV. The "DownArrow" represents the downward-pointing arrow on the top row of the BAII Plus keyboard. Make sure the BAII Plus has the P/Y value set to 1.
The current exchange rate for French francs is $0.20. For a U.S. bank this is an example of:
Answer(s): C
A direct quote provides the home currency price of a specific quantity of foreign currency. An indirect quote states the foreign currency price of one unit of home currency. A quote in American terms gives the number of US dollars per units of foreign currency, and in European terms gives the number of foreign currency units perE. S. dollar.
If a nation is running a "trade deficit," it is
A trade deficit implies that a country is importing more value in terms of goods and services than it is exporting to foreign countries.
Which of the following transactions belong to the Current account?
Answer(s): D
The current account consists of Trade and Services balance, Net income from all foreign investments and Unrequited transfers, which include aid to foreign countries, losses due to expropriation of property by foreign governments, etc. Hence, I, II and IV are directly specified as part of the Current account. A purchase of a foreign firm is a capital investment and as such belongs to the Capital account.
John makes T-shirts and sells them only to American citizens and he purchases one bottle of French wine with his income. Which of the following will be true?
John adds to the U.S. trade deficit because he purchases imports why contributing no exports to the trade balance.
Post your Comments and Discuss Test Prep CFA-Level-I exam prep with other Community members:
Our website is free, but we have to fight against AI bots and content theft. We're sorry for the inconvenience caused by these security measures. You can access the rest of the CFA-Level-I content, but please register or login to continue.