Question 1

With respect to international debts, illiquid countries refer to those without oil reserves.

Accepted Answer

A) True 
 B)False  False

Question 2

Most FX transactions take place in the spot market

Accepted Answer

A) True 
 B)False  True

Question 3

Spot market transactions in the foreign exchange market have value dates that are:

Accepted Answer

A)  the same as the transaction origination date 
B)  within 1 day of the transaction origination date 
C)  within 2 days of the transaction origination date 
D)  within 5 days of the transaction origination date 
A)  the same as the transaction origination date 
B)  within 1 day of the transaction origination date 
C)  within 2 days of the transaction origination date 
D)  within 5 days of the transaction origination date C

Question 4

Options give the holder the right to exercise, whereas future contracts are "obligations" to buy or sell.

Accepted Answer

A) True 
 B)False

Question 5

Trading in both FX futures and forward contracts are conducted on commodities exchanges.

Accepted Answer

A) True 
 B)False

Question 6

In international banking, a representative office may

Accepted Answer

A)  book loans 
B)  take deposits 
C)  provide investment banking services 
D)  develop business 
A)  book loans 
B)  take deposits 
C)  provide investment banking services 
D)  develop business

Question 7

The direct foreign exchange rate is the number of home currency units that can be exchanged for one unit of a foreign currency.

Accepted Answer

A) True 
 B)False

Question 8

The International Banking Act of 1978 permits domestic banks to acquire foreign banks and financial organizations.

Accepted Answer

A) True 
 B)False

Question 9

In quoting foreign exchange rates, the _____is amount of a foreign currency equivalent to $1.

Accepted Answer

A)  direct rate 
B)  direct ratio 
C)  indirect rate 
D)  indirect ratio 
A)  direct rate 
B)  direct ratio 
C)  indirect rate 
D)  indirect ratio

Question 10

The network of banks which buy and sell foreign currencies is known as the:

Accepted Answer

A)  foreign exchange market 
B)  foreign bank market 
C)  interbank market 
D)  interchange market 
A)  foreign exchange market 
B)  foreign bank market 
C)  interbank market 
D)  interchange market

Question 11

Banks may establish foreign branches with the approval of the _____.

Accepted Answer

A)  BIS 
B)  U.N. 
C)  Federal Reserve 
D)  OCC 
A)  BIS 
B)  U.N. 
C)  Federal Reserve 
D)  OCC

Question 12

Arbitrage refers to the simultaneous purchase and sale of assets in order to benefit from price changes in the commodity.

Accepted Answer

A) True 
 B)False

Question 13

Foreign banks are not permitted to operate "branches" of their banks in the United States.

Accepted Answer

A) True 
 B)False

Question 14

Interest rate parity is when under normal market conditions, investors should not be able to make arbitrage profits because premiums or discounts are exactly offset by adjusted interest rate differentials.

Accepted Answer

A) True 
 B)False

Question 15

Most banks in the United States do not deal in international banking on a regular basis. When they do require such services, they frequently use

Accepted Answer

A)  foreign branches 
B)  correspondent banks 
C)  Edge Act offices 
D)  foreign affiliates 
A)  foreign branches 
B)  correspondent banks 
C)  Edge Act offices 
D)  foreign affiliates

Question 16

The futures market provides future price information about standardized commodity contracts.

Accepted Answer

A) True 
 B)False

Question 17

Foreign owned "investment companies" are the same thing as an investment company (mutual fund) in the U.S., and are regulated by both the FDIC and the SEC.

Accepted Answer

A) True 
 B)False

Question 18

The formula for the annual forward rate is:

Accepted Answer

A)  $\frac{(F-S) \times 100}{S} \times \frac{365}{n}$ 
B)  ( $\frac{(F-S) \times 100}{F} \times \frac{365}{n}$ 
C)  $\frac{(\mathrm{S}-\mathrm{F}) \times 100}{\mathrm{~S}} \times \frac{365}{\mathrm{n}}$ 
D)  $\frac{(\mathrm{S}-\mathrm{F}) \times 100}{\mathrm{~F}} \times \frac{365}{\mathrm{n}}$ 
A)  $\frac{(F-S) \times 100}{S} \times \frac{365}{n}$ 
B)  ( $\frac{(F-S) \times 100}{F} \times \frac{365}{n}$ 
C)  $\frac{(\mathrm{S}-\mathrm{F}) \times 100}{\mathrm{~S}} \times \frac{365}{\mathrm{n}}$ 
D)  $\frac{(\mathrm{S}-\mathrm{F}) \times 100}{\mathrm{~F}} \times \frac{365}{\mathrm{n}}$

Question 19

Many small and large banks in the U.S. use correspondent banks to handle their international banking activity.

Accepted Answer

A) True 
 B)False

Question 20

The syndication process of foreign lending is usually handled by investment bankers such as Merrill Lynch.

Accepted Answer

A) True 
 B)False

With respect to international debts, illiquid countries refer to those without oil reserves.

Most FX transactions take place in the spot market

Spot market transactions in the foreign exchange market have value dates that are:

Options give the holder the right to exercise, whereas future contracts are "obligations" to buy or sell.

Trading in both FX futures and forward contracts are conducted on commodities exchanges.

In international banking, a representative office may

The direct foreign exchange rate is the number of home currency units that can be exchanged for one unit of a foreign currency.

The International Banking Act of 1978 permits domestic banks to acquire foreign banks and financial organizations.

In quoting foreign exchange rates, the _____is amount of a foreign currency equivalent to $1.

The network of banks which buy and sell foreign currencies is known as the:

Banks may establish foreign branches with the approval of the _____.

Arbitrage refers to the simultaneous purchase and sale of assets in order to benefit from price changes in the commodity.

Foreign banks are not permitted to operate "branches" of their banks in the United States.

Interest rate parity is when under normal market conditions, investors should not be able to make arbitrage profits because premiums or discounts are exactly offset by adjusted interest rate differentials.

Most banks in the United States do not deal in international banking on a regular basis. When they do require such services, they frequently use

The futures market provides future price information about standardized commodity contracts.

Foreign owned "investment companies" are the same thing as an investment company (mutual fund) in the U.S., and are regulated by both the FDIC and the SEC.

The formula for the annual forward rate is:

Many small and large banks in the U.S. use correspondent banks to handle their international banking activity.

The syndication process of foreign lending is usually handled by investment bankers such as Merrill Lynch.

Functions and Forms of Banking

The Bank Regulatory Environment

Evaluating Bank Performance

Bank Valuation

An Overview of Assetliability Management Alm

Techniques of Assetliability Management: Futures, Options, and Swaps

Investment Management

Credit Evaluation Process

Commercial and Industrial Lending

Real Estate and Consumer Lending

Liquidity Management

Capital Management

Managing Liabilities

Off-Balance Sheet Activities

Securities, Investment Insurance Products

Other Financial Services

Electronic Banking

Filters

Exam 18: Global Financial Services

With respect to international debts, illiquid countries refer to those without oil reserves.

Most FX transactions take place in the spot market

Spot market transactions in the foreign exchange market have value dates that are:

Options give the holder the right to exercise, whereas future contracts are "obligations" to buy or sell.

Trading in both FX futures and forward contracts are conducted on commodities exchanges.

In international banking, a representative office may

The direct foreign exchange rate is the number of home currency units that can be exchanged for one unit of a foreign currency.

The International Banking Act of 1978 permits domestic banks to acquire foreign banks and financial organizations.

In quoting foreign exchange rates, the _____is amount of a foreign currency equivalent to $1.

The network of banks which buy and sell foreign currencies is known as the:

Banks may establish foreign branches with the approval of the _____.

Arbitrage refers to the simultaneous purchase and sale of assets in order to benefit from price changes in the commodity.

Foreign banks are not permitted to operate "branches" of their banks in the United States.

Interest rate parity is when under normal market conditions, investors should not be able to make arbitrage profits because premiums or discounts are exactly offset by adjusted interest rate differentials.

Most banks in the United States do not deal in international banking on a regular basis. When they do require such services, they frequently use

The futures market provides future price information about standardized commodity contracts.

Foreign owned "investment companies" are the same thing as an investment company (mutual fund) in the U.S., and are regulated by both the FDIC and the SEC.

The formula for the annual forward rate is:

Many small and large banks in the U.S. use correspondent banks to handle their international banking activity.

The syndication process of foreign lending is usually handled by investment bankers such as Merrill Lynch.

Functions and Forms of Banking

The Bank Regulatory Environment

Evaluating Bank Performance

Bank Valuation

An Overview of Assetliability Management Alm

Techniques of Assetliability Management: Futures, Options, and Swaps

Investment Management

Credit Evaluation Process

Commercial and Industrial Lending

Real Estate and Consumer Lending

Liquidity Management

Capital Management

Managing Liabilities

Off-Balance Sheet Activities

Securities, Investment Insurance Products

Other Financial Services

Electronic Banking

Filters