International Finance and Treasury – Set 3 January 29, 2025 by aasi 0% Report a question What’s wrong with this question? You cannot submit an empty report. Please add some details. 1234567891011121314151617181920212223242526272829303132333435363738394041424344454647484950 International Finance and Treasury – Set 3 Dear ! This is International Finance and Treasury – Set 3 Quiz and it contains 50 questions. Keep Learning! 1 / 50 1) In equilibrium position, spread between foreign and domestic rate of interest must be equal to spread of domestic rates forward and spot exchange rates forward rate spot rates 2 / 50 2) Type of bond whose present value is lesser than that of its face value is classified as discount bond premium bond coupon bond interest bonds 3 / 50 3) Largest number of buyers and sellers, greater the liquidity speculation hedging forward rate 4 / 50 4) Primary mortgages involves three institutions single investor multiple investor multiple institutions 5 / 50 5) For an investment, weighted average time to maturity is considered as premium time standard time mean time duration 6 / 50 6) Interest rate that investors receive on financial security to calculate fair value of security is classified as forward rate of return unturned rate of return required rate of return termed rate of return 7 / 50 7) Which of following causes do investors employ foreign exchange market currency hedging currency speculation currency conversion all of these 8 / 50 8) Mortgages used to purchase shopping malls and office buildings are classified as developed mortgages dwelling mortgages commercial mortgages non-commercial mortgages 9 / 50 9) Larger fluctuations in portfolio value of foreign exchange of financial institutions leads to greater liquidity of assets greater volatility of rates lesser volatility of rates lesser liquidity of assets 10 / 50 10) In 1944 international accord is recognized as Breton Wood Agreement Exchange Agreement International Trade Fisher Effect 11 / 50 11) Position which came in to existence because of holding assets less than liabilities is considered as net surplus in assets net surplus in liabilities net long in currency net short in currency 12 / 50 12) Bid quote is for seller buyer hedger speculator 13 / 50 13) If a company agreements today for several future date of real currency exchange, they will be building use of a stock rate stock rate futures rate forward rate 14 / 50 14) Major participants in forward markets are commercial banks broker deals investment banks all of these 15 / 50 15) Not aim of international capital market is preserving hard currencies to finance trade deficits reducing cost of money to borrowers reducing investor risk expanding money supply for borrowers 16 / 50 16) In United States, JPMorgan Chase is considered as largest foreign exchange trading smaller foreign exchange trading largest bond holder smaller bond holder 17 / 50 17) More coupon payment or promised interest payment higher its duration lower its duration zero duration One year duration 18 / 50 18) Mortgages used to purchase townhouses and apartment complexes are classified as multi mortgage multifamily dwelling mortgages sovereign dwelling mortgages primary dwelling mortgages 19 / 50 19) Type of contract which involves immediate exchange of funds and assets is classified as spot contract forward contract future contracts present contract 20 / 50 20) For given change in interest rates, percentage change in present value of bond is classified as price sensitivity yield sensitivity maturity sensitivity premium sensitivity 21 / 50 21) Duration which is divided by interest rate plus one is classified as decreased duration increase duration modified duration at par duration 22 / 50 22) In zero coupon bonds, increase in duration with respect to maturity must be at decreasing rate increasing rate alarming rate inelastic rate 23 / 50 23) Investors of coupon bond will receive cash flow very soon if maturity is lower maturity is higher interest payment is higher interest payment is lower 24 / 50 24) Eurobonds are admired because they are less risky than traditional bonds European companies are considered very stable of absence of government regulation they are always denominated in euro 25 / 50 25) Position which came in to existence because of holding assets more than liabilities is considered as net long in currency net short in currency net surplus in assets net surplus in liabilities 26 / 50 26) Inverse relationship between price change and interest rate change is represented by negative discount negative duration positive duration positive discount 27 / 50 27) Reasons for smaller exposure of foreign exchange than US money center are regulations prudent individuals smaller size of assets all of these 28 / 50 28) Global bond market consists of all bonds sold by issued companies, governments, or other firms within their own countries outside their own countries to London banks to developing nations only 29 / 50 29) Type of bonds that pay coupon interest are classified as forward bond payment bonds coupon bond interest bonds 30 / 50 30) Ownership of mortgaged property will be transferred to financial institution if borrower defaults borrower does not default borrower want less rate borrower want profit 31 / 50 31) Commercial mortgages, farm mortgages and home mortgages are categories of swapped mortgages sovereign mortgages secondary mortgages primary mortgagees 32 / 50 32) In zero coupon bonds, impact of lower duration on maturity is that maturity will be higher maturity will be lower maturity will be zero maturity will be elastic 33 / 50 33) Simplicity with which bondholders and shareholders can change their investments into cash is known barter hedging arbitrage liquidity 34 / 50 34) Theory according to which difference between expected appreciation and foreign interest must be equal to domestic interest rate is called interest rate parity theorem appreciation parity theorem domestic parity theorem foreign interest parity theorem 35 / 50 35) Exchange rate entail delivery of trade currency within two business days know as forward rate future rate spot rate bid rate 36 / 50 36) Foreign bonds issued in Japan are known bulldog bonds dragon bonds Yankee bonds samurai bonds 37 / 50 37) Services such as commercial trade transactions and positions in financial investments provided by financial institutions are classified as trade services investment services agent services commercial services 38 / 50 38) Rule which states that similar set of goods and services produced in various countries should have equal price is classified as law of similar mortgage rate law of one type manufacturing law of similar labour rules law of one price 39 / 50 39) Inflation rate in United States is added into real rate of interest to calculate quoted interest rate in United States nominal interest rate in United States interest rate in United States discount rate of country 40 / 50 40) Change in interest rate measured in percentage for given interest rate change is classified as premium yield elasticity duration maturity yield 41 / 50 41) For a foreign exchange of specific currency, non-hedged position is classified as open position close position currency long position currency short position 42 / 50 42) Theory which considers change in exchange rate with fluctuations in inflation rates is classified as liquidated power parity purchasing power parity selling power parity volatile power parity 43 / 50 43) More instability in currency is called as country risk financial risk currency risk liquidity risk 44 / 50 44) Bonds that does not pay any interest rate are considered as interest free bond zero coupon bond price less coupon bond useless price bonds 45 / 50 45) Loan which is made available for businesses or individuals to buy land, home or other property is classified as secondary loan primary loan mortgages swapped mortgages 46 / 50 46) Type of bond for which bonds present value is greater than bonds face value is classified as coupon bond interest bonds discount bond premium bond 47 / 50 47) Direct relationship between price change and interest rate change is represented by positive duration positive discount negative discount negative duration 48 / 50 48) In zero coupon bonds, impact of higher duration on maturity is that maturity will be zero maturity will be elastic maturity will be higher maturity will be lower 49 / 50 49) Differences in nominal interest rates are removed in exchange rate is fisher effect Leontief paradox. combined equilibrium theory. purchasing power parity 50 / 50 50) Bid-ask spread in foreign exchange market is the price of currency in foreign exchange market difference between bid and ask quotes for a currency price at which a bank will buy a currency price a bank will pay for a currency Your score isThe average score is 0%🎉 Challenge alert! 💡 Share this quiz with your friends and see who scores the highest! 🏆🤩🔥 LinkedIn Facebook Follow Us @ 0% Restart quiz Exit We’d love to hear your thoughts! 📝 Share your valuable review with us. 🙌 🌟 Thank you for your support! 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