TEST

TEST

I. PROBLEMS.(70 points)
(Two pages )
A..*We, William Paterson and associates, a US MNE, join forces with Wasniowska,
a Polish national, who is well versed in the Polish culture, as a minority shareholder, and invest $10 million in Poland in a furniture factory. The information we have is as follows. The European Union subsidizes the investment up to 60% of the cost and 40% of the interest. Thus, we borrow $30 million and receive $60 million free money from the EU. The agreement is to pay interest and amortize the principal in the next 10 years. The prognosis of the projects profitability is that revenue the first ten years will be $20 million per annum, the cost of goods sold will be $3.5 million, the SGA expenses will be $9 million, the interest expense will be $1.8 million annually, and the tax rate will be 20%. Furthermore, the Polish T bond rate is 6%, the bond rate for wp01/Wasniowska is 11%, the bheta of this firm is 2.5, and the ROR for the Polish stock market has been 12% annually. After the first ten year period, the NCF and the expenses will grow forever at a 4% growth rate.
Moreover, the zloty, the polish currency, has had weakness against the US $ and the euro and all currencies during the 10 year analysis, and the forecast is that this experience will continue. Furthermore, the price elasticity of demand of furniture in the world (which is the market for this factory) is 6 (this matters in connection with the weak value of the zloty relatively to the other currencies.) The income elasticity of demand is extremely high, as well, hovering at about 5. The prognosis is that incomes will continue to increase in the markets of this factory.
a. Compute the NCF, COC and NPV of wp01/Wasniowska.(20 points)
b. Explicate this FDI from a behavioral viewp01oint.(5 points)

B. The inflation rates in the British pound and the Australian dollar are 2% and 8% respectively. What should the Sex /Forward ER be, if the Spot ER is BP/ A$ .1? Describe the concept of purchasing power. (10 points) (One page)

C.The interest rates in the $ and the euro are 2% and 5% respectively. If the Spot exchange rate is $ 1/euro 1, what will the expected spot rate be, if the IFE applies? (10 points.) What is the meaning of IFE? Does it relate to PPP? (One page)

D..We know that the yen and the swiss franc have a 100yen/ sf 1 exchange rate, meaning one swiss franc buys 100 yen in the spot ER market. The 1 year forward rate is 80 yen /swiss franc , or 1 franc buys 80 yen in the forward market. If the swiss franc has an interest rate of .02, what should the yen rate be for IPT (interest parity theory) to be attained? If the yen rate were 6%, would there be equilibrium? If so, what would transpire? Show both amounts and differentials. Also, show everything in both yen and franc terms. (25 points)
(One page)

ESSAYS(30 points) (One page for each )

A. Expound on the balance of payments/current account view of exchange rates.

B. Analyze the portfolio balance view.

C Explicate the monetary approach to exchange rates.

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In the article “Trying Out One’s New Sword,” what does Mary Midgley use example of the samurai to illustrate?  (Points : 1)       It’s not necessarily wrong to apply standards and values from our own culture when considering another culture.

      People who object to making moral judgments about other cultures typically do so by making positive moral judgments about those cultures.

      To refuse to apply moral judgments to other cultures is to fail to take those other cultures seriously.

      all of the above. 

Question 2.
2. According to Glaukon from the “Ring of Gyges” excerpt from Plato’s Republic, people are: (Points : 1)       Naturally egocentric

      Naturally self-sacrificing

      Naturally just

      Naturally benevolent

Question 3.
3. Leon Kass argues that there is an important difference between withdrawing treatment and active, direct mercy killing, and this difference lies in: (Points : 1)       the amount of suffering that the patient experiences.

      the laws of the United States.

      the choices of the patient.

      the primary intention of the doctor.

Question 4.
4. In “Active and Passive Euthanasia”, James Rachels points out that when passive euthanasia is employed on infants, they typically die of: (Points : 1)       dehydration and infection.

      SARS.

      a broken heart.

      poisoning.

Question 5.
5. According to Rachels’ article “Active and Passive Euthanasia”, many people accept the “conventional doctrine” that active euthanasia is always wrong while passive euthanasia is sometimes okay because: (Points : 1)       they believe that it is never permissible either to let someone die or to kill them.

      they believe that there is no intrinsic moral difference between killing and letting die.

      they believe that letting die is morally worse than killing.

      they believe that killing is intrinsically worse than letting die

Question 6.
6. In the “Ring of Gyges” excerpt from Plato’s Republic, Glaukon suggests that people are “just” or good because: (Points : 1)       they care more about others than they care about themselves.

      they are moved by love of the gods.

      they know that living justly is truly the best sort of life.

      they are powerless to commit injustice and get away with it.

Question 7.
7. In the article “Trying Out One’s New Sword,” what does Mary Midgley mean by “moral isolationism”?  (Points : 1)       The view that each individual moral value or concept is isolated from all others.

      The idea that cultures are so isolated from each other that people cannot understand, and thus cannot pass moral judgment upon, the practices of another culture.

      The claim that we should isolate those who fail to act morally.

      The view that being isolated from morality is necessary for authentic self-realization. 

Question 8.
8. According to Mary Midgley in the article “Trying Out One’s New Sword,” what is a feature of almost all cultures that shows why moral isolationism is wrong?  (Points : 1)       They all recognize and accept modern Western values.

      They formed out of the interactions of many different cultures coming in contact.

      They are all offshoots of an original, master culture.

      They all share the same beliefs about humanity and God.  

Question 9.
9. According to Rachels’ article “Active and Passive Euthanasia”, active euthanasia: (Points : 1)       always leads to more suffering than passive euthanasia.

      always leads to the same amount of suffering as passive euthanasia.

      sometimes leads to less suffering than passive euthanasia.

      all of the above.

Question 10.
10. In “Active and Passive Euthanasia”, Rachels claims that most actual cases of killing, especially those outside of medical contexts: (Points : 1)       are morally neither good nor bad

      are morally worse than cases of letting die.

      are morally the same as cases of letting die.

      are morally better than actual cases of letting die.

Question 11.
11. In the “Ring of Gyges” excerpt from Plato’s Republic, Glaukon begins by claiming that “those who practice justice” do so (Points : 1)       Because they know it is the right thing to do.

      Because they are compelled by their conscience.

      Because all of the parts of their character are harmoniously oriented toward the good.

      Because they are incapable of doing otherwise.

Question 12.
12. According to Glaukon from the “Ring of Gyges” excerpt from Plato’s Republic, If the Ring of Gyges really existed what would not be the case: (Points : 1)       Most people would use it for good.

      Everyone would use it for their own advantage.

      Most people would not continue to act the way they normally do.

      Everyone would use it to commit injustice.

Question 13.
13. In “Active and Passive Euthanasia”, Rachels argues that the “conventional doctrine” that active euthanasia is always wrong while passive euthanasia is sometimes okay: (Points : 1)       is obviously correct.

      leads to decisions concerning life and death made on morally irrelevant grounds.

      is not what most people believe, but can be supported by strong arguments.

      leads to patients being euthanized against their will.

Question 14.
14. According to the “Ring of Gyges” excerpt from Plato’s Republic, Glaukon thinks that deep in our hearts we all believe that (Points : 1)       To be unjust is to be a fool.

      We will be happier if we always stick to the laws of justice.

      Injustice is more profitable than justice.

      Both (a) and (b).

Question 15.
15. In “Active and Passive Euthanasia”, what is the view that Rachels is defending? (Points : 1)       active euthanasia is sometimes permissible, but passive euthanasia never is.

      passive euthanasia is sometimes permissible, but active euthanasia never is.

      both active and passive euthanasia are sometimes permissible.

      neither active nor passive euthanasia are ever permissible.

Question 16.
16. According to Rachels’ article “Active and Passive Euthanasia”, passive euthanasia is: (Points : 1)       passively giving into the wishes of the patient to have their life ended by lethal injection.

      using “extraordinary means” to prevent a patient’s death, against the patient’s wishes.

      ceasing to use “extraordinary means” to prolong someone’s life.

      the refusal to treat a patient to avoid incurring unnecessary costs.

Question 17.
17. Leon Kass argues that the primary responsibility of physicians is to: (Points : 1)       benefit sick by the activity of healing

      minimize the patient’s suffering.

      respect the wishes of the patient.

      preserve a patient’s life by every means possible. 

Question 18.
18. In “Active and Passive Euthanasia”, Rachels concludes that: (Points : 1)       active euthanasia is always worse than passive euthanasia.

      passive euthanasia is always worse than active euthanasia.

      active euthanasia is sometimes morally permissible.

      none of the above.

Question 19.
19. In “Active and Passive Euthanasia”, Rachels claims that: (Points : 1)       there is always a moral difference between the consequences of active and passive euthanasia.

      there is no moral difference between active and passive euthanasia, considered in themselves.

      both a and b.

      neither a nor b.

Question 20.
20. According to Rachels’ article “Active and Passive Euthanasia”, active euthanasia involves: (Points : 1)       intentionally causing a patient’s death to relieve pain and suffering.

      the termination of one’s life by another person by removing life support.

      using extraordinary means to prevent a patient’s death, against the patient’s wishes.

      the refusal to treat a patient to avoid incurring unnecessary costs.

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