International Finance and Treasury – Set 10 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 10 Dear ! This is International Finance and Treasury – Set 10 Quiz and it contains 50 questions. Keep Learning! 1 / 50 1) For a taxable security, tax exempted interest rate on municipal bonds us used to determine tax equivalent rate of return local rate of return withholding tax rate general sales tax rate 2 / 50 2) Type of bonds in which whole issues matures on a single date is considered as term bonds under bonds collateral bonds trustworthy bonds 3 / 50 3) Current market price of common stock is $12 and conversion rate received on conversion is $225 to calculate $18.75 $2,700 $237 $450 4 / 50 4) Conversion values is divided by conversion rate received on conversion on stock to calculate current market price past market price future market value current stock value 5 / 50 5) Value of option issued to call debt is $780 and return rate on callable bond is $370 then return rate on non-callable bond is $1,250 $1,150 $1,350 $410 6 / 50 6) Besides equity related bonds, type of Eurobonds that are convertible are classified as bonds with interbank rate bonds with intra market rate bonds with equity warrants bonds with common stock 7 / 50 7) Sum of purchase price and accrued interest on treasury bonds and notes is considered as dirty price clean price paid price unpaid price 8 / 50 8) Requirement of certain amount of issued bond that must be retired every year is classified as sinking fund provision sinking fund premium sinking fund discount floating fund provision 9 / 50 9) Marginal income tax rate is 28% and before tax rate of return is 14.5% then after tax rate of return is 7.44% 8.44% 9.44% 10.44% 10 / 50 10) Denomination currency choice and volatility of interest rates affects maturity date of euro bond cost of euro bond issuance process of bonds process of printing money 11 / 50 11) Call premium is $385 and face value of bond is $285 then call price of bonds is $100 $770 $670 $570 12 / 50 12) Financial firms such as mutual fund and insurance companies are also called insured financials guaranteed business credit business business financial 13 / 50 13) Financial institutions having loans swapped for bonds can sell all bonds in under-developed markets developed markets primary markets secondary markets 14 / 50 14) Type of bonds that are swapped to less developed country against an outstanding loan are classified as Brady bonds swapped bonds developed bonds developing bonds 15 / 50 15) Considering coupon rate, Brady bonds pays higher than traditional lower than promised higher than promise none of these 16 / 50 16) Corporate bonds are also considered as trustee bonds registered bonds unregistered bonds indenture bonds 17 / 50 17) Firms that attach bonds to stock warrants are usually less discounted more risky less risky more discounted 18 / 50 18) Value of conversion option to bond holder is $740 and rate of return on non-convertible bond is $540 then rate of return on convertible bond is 1.37% $1,280 $1.37 $200 19 / 50 19) Bonds that are not pledged against revenue stream or specific assets are classified as general obligation bonds general obligation notes general obligation tax general obligation savings 20 / 50 20) Foreign bonds issued in United Kingdom financial institutions are classified as Yankee bonds samurai bonds bull dog bonds bull cat bonds 21 / 50 21) Marginal income tax rate is 46.8% and before tax rate of return is 15.5% then after tax rate of return is 7.25% 8.25% 10.25% 9.25% 22 / 50 22) In financial markets, STRIPS are also classified as treasury KIBOR notes treasury KIBOR bonds treasury zero coupon bonds treasury LIBOR bonds 23 / 50 23) In capital markets, instruments which are traded having maturity of more than one year is classified as contraction mortgages bonds and mortgages expansion bonds expansion mortgages 24 / 50 24) Foreign bonds, sovereign bonds and Eurobonds are classified as types of local markets state markets international markets national markets 25 / 50 25) In firm commitment underwriting procedure, more risk is at side of investment bank insurance firm reissuing firm reselling firm 26 / 50 26) Face value of bond is $550 and call price of bond is $475 then value of call premium is $1.16 $1,025 $75 1.16% 27 / 50 27) Eurobonds are denominated in only one currency which is Canadian dollars us dollars Euros Japanese yen 28 / 50 28) Municipal bonds are more considerable to full price investors household investors corporation investors clean price investors 29 / 50 29) Bonds used in purpose of specific projects which are financed by collateral for issuing bonds are classified as indenture bonds trustee bonds collateral bonds mortgage bonds 30 / 50 30) If price of municipal bonds suddenly changes because of an unexpected interest rate change then investment bank faces a high profit faces a loss face a inflation face an index risk 31 / 50 31) Bonds issued for longer term and must be sold in country whom currency is not used in denomination of bonds are classified as interbank bonds intrabank bonds Australian bonds Eurobonds 32 / 50 32) Several maturities dates are involved in issued bonds if company earnings are classified as parallel term income pledged volatile non-volatile 33 / 50 33) Eurobonds are traded in only in issuing country stagnant exchange telephonic market over counter market 34 / 50 34) Issuance of securities in which investment bank does not guarantee back up price and act as distributor in planning of issue is considered as best efforts offering least good index least good premium least good discount price 35 / 50 35) As compared to unsecured bonds, mortgage bonds are considered as more risky less risky term risk serial risk 36 / 50 36) Municipal bonds public offering is often made through insurance companies index banking firm commercial banking firm none of these 37 / 50 37) Current market price of common stock is $18 and conversion rate received on conversion is $410 to calculate $3,580 $5,380 $6,380 $7,380 38 / 50 38) Legal contract which states legal rights of seller and buyer is classified as long term indenture federal indenture private indenture bond indenture 39 / 50 39) According to best efforts offering, investment bank in return of providing services must not receive fee receive fee receive interest rate receive market rate of return 40 / 50 40) Treasury security in which final principal payment is separated from periodic interest payment is classified as STRIP separated security inflated security coupon paid security 41 / 50 41) When characteristics of bonds are perceived as unfavourable or favourable to holders of bond then differences of yield spread must not changes must changes must be debited must be credited 42 / 50 42) Considering bonds characteristics, corporate and treasury bonds have many different characteristics similar characteristics nearer characteristics bearer characteristics 43 / 50 43) Type of bonds issued by governments outside home country of issuer of bond are classified as outside bonds foreign bonds issuing country bonds denominated bonds 44 / 50 44) Debt which depict historical accumulated record of federal government expenditures is classified as national debt international debt global debt contraction debt 45 / 50 45) Main trading markets of Eurobonds are London and Luxembourg Australian markets Swiss banks counters Asian banks counters 46 / 50 46) Call premium of bond is $560 and call price of bond is $340 then face value of bond is $1.65 $220 $900 1.65% 47 / 50 47) Value of conversion option to bond holder is $220 and rate of return on non-convertible bond is $350 then rate of return on convertible bond is $570 $130 $670 $1.59 48 / 50 48) With consolidation of currencies, created liquidity allows Eurobond price and supply to decrease price and supply to increase demand and size to decrease demand and size to increase 49 / 50 49) Markets in which bonds are traded and issued are classified as corporate markets treasury markets bond markets municipal markets 50 / 50 50) Replacement of bearer bonds with registered bonds is because of lack of security of 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