Exam 17: International Banking: Reserves, Debt, and Risk

The currencies generally referred to as "reserve currencies" are the:

Swap agreements are generally conducted by the:

For developing countries such as Mexico and Brazil, severe economic problems in the 1980s were caused by:

Which of the following assets makes use of the basket valuation technique?

A dollar $\underline { \text { shortage } }$ would indicate that the dollar is:

A debt buyback is a debt-reduction technique in which a government of a debtor nation buys loans from commercial banks at a discount.

Swap arrangements

By the 1990s, the British pound had replaced the U.S. dollar as the world's key currency.

Which of the following is $\underline { \text { not } }$ a characteristic of the Eurodollar market? It:

When exchange rates are fixed by central bankers, international reserves are necessary for financing payments imbalances and the stabilization of exchange rates.

An advantage of international reserves is that they allow countries to sustain temporary balance-of-payments deficits until acceptable adjustment measures can operate to correct the disequilibrium.

In the 1970s, the major industrial countries abandoned the managed-floating exchange rate system and adopted a system of fixed exchange rates tied to the price of gold.

Which organization is largely intended to make long-term reconstruction loans to developing nations?

"Country risk" analysis is concerned with all of the following $\underline { \text { except: } }$ :

A country with a high debt/export ratio and a high debt service/export ratio would likely be considered as an attractive place in which to invest by foreign residents.

The SDR has replaced the dollar, yen, and mark as the key asset of the international financial system.

All of the following are major goals of the International Monetary Fund except:

There exists a direct relationship between the degree of exchange rate flexibility and the need for international reserves.

A main purpose of the International Monetary Fund is to make loans of foreign currencies to member countries which are experiencing current-account surpluses.

Most analysts feel that the financial difficulties in East Asia were triggered by