1 euro =100 euro cents

A、Siebzig Cent

B、Eins Euro elf

C、Eins dreißig

D、Zwei Euro

A.euro

B.money

C.dollar

D.pounds

The greenback was sold off after weak U.S. jobs figures on Friday but the euro remained close to 8-month lows after France and the Netherlands rejected the EU constitution in referendums last week.

"It's been one-way news in favor of the dollar apart from Friday's job data... We're seeing a bit of a move back today but it's not that convincing. Such is the weight of bad news on the euro," said Ian Gunner, head of foreign exchange research at Mellon Bank.

U.S. jobs growth in May was the worst in 21 months, data showed on Friday, coming after figures last week showed manufacturing activity was the slowest in almost two years.

By 0750 GMT, the euro stood at $1.2266 against the dollar, up a quarter of a percent from late New York levels on Friday and a cent above last week's 8-month low of $1.2157. The euro was little changed against the yen.

The dollar was also down a quarter of a percent against the yen at 107.29 yen.

Eurozone finance ministers meet in Luxembourg on Monday and Tuesday in the face of uncertainty over further European political and monetary integration following the two "no" votes.

Rejection of the charter at the referendums, along with the region's poor growth prospects, helped push the euro down almost 3 percent against the dollar last week.

Britain's foreign secretary was expected to announce on Monday the country was shelving plans for a referendum on the EU constitution, one step short of publicly declaring it dead.

The euro wobbled after European Central Bank Chief Economist Otmar Issing was quoted as saying that policy strategy does not rule out an interest rate cut.

A cut in rates would further underscore the dollar's interest rate advantage over the euro. U.S. rates stand at 3.0 percent compared to 2.0 percent in the euro zone.

According to the news item, ______.

A．both the dollar and the euro were strong

B．both the dollar and the euro were weak

C．the dollar was strong while the euro was weak

D．the dollar was weak while the euro was strong

You are a U.S. investor and currently have a portfolio worth :100 million in German bonds. The current spot exchange rate is €2/$. The current one-year market interest rates are 6 percent in the euro area and 10 percent in the United States. One-year currency options are quoted with a strike price of $0.50/€; a call on euros is quoted at $0.01 per euro, and a put on euros is quoted at $0.012 per euro. You are worried that inflation in euro area will cause a drop in the euro. You consider using forward contracts or options to hedge the currency risk. a. What is the one-year forward exchange rate $::？ b. Calculate the dollar value of your portfolio, assuming that its euro value stays at €100 million; use $:€ spot exchange rates equal in one year to 1.6, 1.8, 2, 2.2, and 2.4. First consider a currency forward hedge, then a currency option insurance. c. What could make your forward hedge imperfect？

A．what

B．which

C．that

D．when

Herd Co is based in a country whose currency is the dollar ($). The company expects to receive €1,500,000 in six months’ time from Find Co, a foreign customer. The finance director of Herd Co is concerned that the euro (€) may depreciate against the dollar before the foreign customer makes payment and she is looking at hedging the receipt.

Herd Co has in issue loan notes with a total nominal value of $4 million which can be redeemed in 10 years’ time. The interest paid on the loan notes is at a variable rate linked to LIBOR. The finance director of Herd Co believes that interest rates may increase in the near future.

The spot exchange rate is €1·543 per $1. The domestic short-term interest rate is 2% per year, while the foreign short-term interest rate is 5% per year.

What is the six-month forward exchange rate predicted by interest rate parity？

A.€1·499 per $1

B.€1·520 per $1

C.€1·566 per $1

D.€1·588 per $1

As regards the interest rate risk faced by Herd Co, which of the following statements is correct？A.In exchange for a premium, Herd Co could hedge its interest rate risk by buying interest rate options

B.Buying a floor will give Herd Co a hedge against interest rate increases

C.Herd Co can hedge its interest rate risk by buying interest rate futures now in order to sell them at a future date

D.Taking out a variable rate overdraft will allow Herd Co to hedge the interest rate risk through matching

Which of the following hedging methods will NOT be suitable for hedging the euro receipt？A.Forward exchange contract

B.Money market hedge

C.Currency futures

D.Currency swap

Which of the following statements support the finance director’s belief that the euro will depreciate against the dollar？

(1) The dollar inflation rate is greater than the euro inflation rate

(2) The dollar nominal interest rate is less than the euro nominal interest rate

A.1 only

B.2 only

C.Both 1 and 2

D.Neither 1 nor 2

As regards the euro receipt, what is the primary nature of the risk faced by Herd Co？A.Transaction risk

B.Economic risk

C.Translation risk

D.Business risk

M: Well, the 1992 Maastricht Treaty proposed a single currency between the European Union. The participating countries decided on the name "Euro' at a summit in Madrid in 1995 and the currency was launched on January 1, 1999.

W: What is it worth？

M: When the Euro was launched in 1999, one Euro was worth 1.17 US dollars or 71 British pence. However, the weakness of the Euro zone economies compared with that of the United States, combined with the inexperience of the European Central Bank in dealing with the international markets, has meant that since its launch the value of the Euro had declined significantly. In December 2001, one Euro was worth little more than 89 cents or 63 pennies, a 20 percent drop on its initial value.

W: Do you think it will affect the daily life of ordinary people？

M: I suppose so. For example, one of the major headaches for participating countries has been the con version of public telephones, vending machines, and shopping trolleys to accept Euro coins. Al though a conversion process has been in full swing since before 1999, there are reports that some countries are not ready for the Euro.

W: So what does it look like？

M: There are seven notes designed by the Austrian artist Robert Kalina. The designs show the "seven ages" of European development, with windows and gateways on the front, and bridges on the back. In addition, there are eight coins designed by the Belgian artist Luc Luycx. All Euro coins are round, but have differences in composition, weight, thickness, and milling to ensure that the blind can easily distinguish between them. On the front there is a European design, common to all coins, and on the back a "national" design from the central bank of issue. Despite the "national identities'', all coins can be spent throughout the Euro zone regardless of their origin.

(36)

A．1992

B．1995

C．1999

D．2001