Question 1

______ is a cash market transaction in which delivery of the commodity is deferred until after the contract has been made.

Accepted Answer

A)  futures contract 
B)  commercial contract 
C)  options contract 
D)  forward contract 
A)  futures contract 
B)  commercial contract 
C)  options contract 
D)  forward contract

Question 2

The principal difference between American and European options is where they are traded.

Accepted Answer

A) True 
 B)False

Question 3

The term "accepted" on a bankers acceptance indicates an irrevocable obligation of the accepting bank.

Accepted Answer

A) True 
 B)False

Question 4

Contracts in the forward market are standardized for ease of trading.

Accepted Answer

A) True 
 B)False

Question 5

The date on which the buyer and seller of foreign exchange agree to conduct a transaction is known as the:

Accepted Answer

A)  value date 
B)  exchange date 
C)  contract date 
D)  promised date 
A)  value date 
B)  exchange date 
C)  contract date 
D)  promised date

Question 6

In the futures market transferable legal agreements to make or take delivery of a certain commodity at a known price are based on ______ contracts.

Accepted Answer

A)  commercial 
B)  noncommercial 
C)  standardized 
D)  all of the above 
A)  commercial 
B)  noncommercial 
C)  standardized 
D)  all of the above

Question 7

Banks that do not have international departments frequently use the services of ____ to serve their customers' intentional needs.

Accepted Answer

A)  Federal Reserve wire transfer 
B)  major investment banking firms 
C)  international syndicates 
D)  correspondent banks 
A)  Federal Reserve wire transfer 
B)  major investment banking firms 
C)  international syndicates 
D)  correspondent banks

Question 8

The first foreign bank to establish operations in the United States in 1818 was the bank of Toronto.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is NOT one of the principal activities involved in international banking?

Accepted Answer

A)  making foreign loans 
B)  dealing in foreign exchange 
C)  dealing in standby letters of credit 
D)  dealing in commercial letters of credit 
A)  making foreign loans 
B)  dealing in foreign exchange 
C)  dealing in standby letters of credit 
D)  dealing in commercial letters of credit

Question 10

In futures trading, margin refers to a security deposit.

Accepted Answer

A) True 
 B)False

Question 11

Outward arbitrage occurs in the U.S. when banks find it lower cost to borrow overseas.

Accepted Answer

A) True 
 B)False

Question 12

Credit risk in an FX transaction may be due to the failure of a counterparty to meet contractual obligations.

Accepted Answer

A) True 
 B)False

Question 13

A cross-rate two foreign currencies can be exchanged in terms o dollars or some other currency.

Accepted Answer

A) True 
 B)False

Question 14

The Edge Act permits banks to have subsidiary corporations that _____.

Accepted Answer

A)  provide a means of financing international trade 
B)  serve as branch offices 
C)  gather deposits and make foreign loans 
D)  none of the above 
A)  provide a means of financing international trade 
B)  serve as branch offices 
C)  gather deposits and make foreign loans 
D)  none of the above

Question 15

Documentary collections means that payment will be made upon presentation of the correct documents such as bills of lading.

Accepted Answer

A) True 
 B)False

Question 16

If the indirect exchange rate for the French franc increased from 5.57 FF to 5.80 FF, the franc depreciated against the dollar.

Accepted Answer

A) True 
 B)False

Question 17

Edge Act offices refer to offices of foreign banks located in major cities to conduct some of the banking activities in accordance with the International Banking Act.

Accepted Answer

A) True 
 B)False

Question 18

When the forward rates for a currency exceed the spot rate, the currency is trading at a _____ in the forward market.

Accepted Answer

A)  surplus 
B)  discount 
C)  premium 
D)  positive gap 
A)  surplus 
B)  discount 
C)  premium 
D)  positive gap

Question 19

If the indirect rate for marks is 3 and the direct rate for pound is $0.50, then the crossrate for marks per pound is:

Accepted Answer

A)  1.50 
B)  6.00 
C)  3.00 
D)  0.50 
A)  1.50 
B)  6.00 
C)  3.00 
D)  0.50

Question 20

The Brady Initiative called for agreements between creditor and debtor nations to deal with cold war repatriations.

Accepted Answer

A) True 
 B)False

______ is a cash market transaction in which delivery of the commodity is deferred until after the contract has been made.

The principal difference between American and European options is where they are traded.

The term "accepted" on a bankers acceptance indicates an irrevocable obligation of the accepting bank.

Contracts in the forward market are standardized for ease of trading.

The date on which the buyer and seller of foreign exchange agree to conduct a transaction is known as the:

In the futures market transferable legal agreements to make or take delivery of a certain commodity at a known price are based on ______ contracts.

Banks that do not have international departments frequently use the services of ____ to serve their customers' intentional needs.

The first foreign bank to establish operations in the United States in 1818 was the bank of Toronto.

Which of the following is NOT one of the principal activities involved in international banking?

In futures trading, margin refers to a security deposit.

Outward arbitrage occurs in the U.S. when banks find it lower cost to borrow overseas.

Credit risk in an FX transaction may be due to the failure of a counterparty to meet contractual obligations.

A cross-rate two foreign currencies can be exchanged in terms o dollars or some other currency.

The Edge Act permits banks to have subsidiary corporations that _____.

Documentary collections means that payment will be made upon presentation of the correct documents such as bills of lading.

If the indirect exchange rate for the French franc increased from 5.57 FF to 5.80 FF, the franc depreciated against the dollar.

Edge Act offices refer to offices of foreign banks located in major cities to conduct some of the banking activities in accordance with the International Banking Act.

When the forward rates for a currency exceed the spot rate, the currency is trading at a _____ in the forward market.

If the indirect rate for marks is 3 and the direct rate for pound is $0.50, then the crossrate for marks per pound is:

The Brady Initiative called for agreements between creditor and debtor nations to deal with cold war repatriations.

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

______ is a cash market transaction in which delivery of the commodity is deferred until after the contract has been made.

The principal difference between American and European options is where they are traded.

The term "accepted" on a bankers acceptance indicates an irrevocable obligation of the accepting bank.

Contracts in the forward market are standardized for ease of trading.

The date on which the buyer and seller of foreign exchange agree to conduct a transaction is known as the:

In the futures market transferable legal agreements to make or take delivery of a certain commodity at a known price are based on ______ contracts.

Banks that do not have international departments frequently use the services of ____ to serve their customers' intentional needs.

The first foreign bank to establish operations in the United States in 1818 was the bank of Toronto.

Which of the following is NOT one of the principal activities involved in international banking?

In futures trading, margin refers to a security deposit.

Outward arbitrage occurs in the U.S. when banks find it lower cost to borrow overseas.

Credit risk in an FX transaction may be due to the failure of a counterparty to meet contractual obligations.

A cross-rate two foreign currencies can be exchanged in terms o dollars or some other currency.

The Edge Act permits banks to have subsidiary corporations that _____.

Documentary collections means that payment will be made upon presentation of the correct documents such as bills of lading.

If the indirect exchange rate for the French franc increased from 5.57 FF to 5.80 FF, the franc depreciated against the dollar.

Edge Act offices refer to offices of foreign banks located in major cities to conduct some of the banking activities in accordance with the International Banking Act.

When the forward rates for a currency exceed the spot rate, the currency is trading at a _____ in the forward market.

If the indirect rate for marks is 3 and the direct rate for pound is $0.50, then the crossrate for marks per pound is:

The Brady Initiative called for agreements between creditor and debtor nations to deal with cold war repatriations.

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