Question 1

Currency speculation is ________.

Accepted Answer

A)  the practice of insuring against potential losses that result from adverse changes in exchange rates 
B)  the profit-motivated purchase and sale of interest-paying securities denominated in different currencies 
C)  the purchase or sale of a currency with the expectation that its value will change and generate a profit 
D)  the instantaneous purchase and sale of a currency in different markets for profit 
A)  the practice of insuring against potential losses that result from adverse changes in exchange rates 
B)  the profit-motivated purchase and sale of interest-paying securities denominated in different currencies 
C)  the purchase or sale of a currency with the expectation that its value will change and generate a profit 
D)  the instantaneous purchase and sale of a currency in different markets for profit C

Question 2

The unbundling and repackaging of hard-to-trade financial assets into more liquid, negotiable, and marketable financial instruments is called ________.

Accepted Answer

A)  market liquidity 
B)  securitization 
C)  bartering 
D)  arbitrage 
A)  market liquidity 
B)  securitization 
C)  bartering 
D)  arbitrage B

Question 3

Although historically more devoted to equity as a means of financing, Europe has more recently discovered the value of debt.

Accepted Answer

A) True 
 B)False  False

Question 4

A debt instrument specifying the timing of principal and interest payments is called a ________.

Accepted Answer

The answer of A debt instrument specifying the timing of...

Question 5

The London Interbank Bid Rate (LIBID) is the interest rate that London banks charge other large banks for borrowing Eurocurrency.

Accepted Answer

A) True 
 B)False

Question 6

The bid-ask spread in the foreign exchange market is the ________.

Accepted Answer

A)  price at which a bank will buy a currency 
B)  price of currency in the foreign exchange market 
C)  difference between the bid and ask quotes for a currency 
D)  price a bank will pay for a currency 
A)  price at which a bank will buy a currency 
B)  price of currency in the foreign exchange market 
C)  difference between the bid and ask quotes for a currency 
D)  price a bank will pay for a currency

Question 7

Scenario: ABC Software
ABC Software is a producer of educational software for small children. The company has operations in Switzerland and would like to expand its foreign production with a new facility in China.
-If ABC Software simultaneously purchases and sells foreign exchange for two different dates it is ________.

Accepted Answer

A)  increasing its foreign exchange rate risk 
B)  conducting a currency swap 
C)  entering an arbitrage situation 
D)  buying and selling at the spot rate 
A)  increasing its foreign exchange rate risk 
B)  conducting a currency swap 
C)  entering an arbitrage situation 
D)  buying and selling at the spot rate

Question 8

Which of the following is NOT true?

Accepted Answer

A)  The international capital market expands the available set of lending opportunities. 
B)  Investors reduce their overall risk by spreading their money over a greater number of debt and equity instruments. 
C)  Investors increase risk by holding international securities whose prices move independently. 
D)  Investing in international securities benefits investors because some economies are growing while others are in decline. 
A)  The international capital market expands the available set of lending opportunities. 
B)  Investors reduce their overall risk by spreading their money over a greater number of debt and equity instruments. 
C)  Investors increase risk by holding international securities whose prices move independently. 
D)  Investing in international securities benefits investors because some economies are growing while others are in decline.

Question 9

The rapid growth of the international capital market can be traced to three main factors: deregulation, innovative financial instruments, and information technology.

Accepted Answer

A) True 
 B)False

Question 10

All currencies that are banked outside their countries of origin are called ________.

Accepted Answer

The answer of All currencies that are banked outside their...

Question 11

The market in which currencies are bought and sold and in which currency prices are determined is called the ________.

Accepted Answer

foreign ex

Question 12

Currency arbitrage is ________.

Accepted Answer

A)  the practice of insuring against potential losses that result from adverse changes in exchange rates 
B)  the profit-motivated purchase and sale of interest-paying securities denominated in different currencies 
C)  the purchase or sale of a currency with the expectation that its value will change and generate a profit 
D)  the instantaneous purchase and sale of a currency in different markets for profit 
A)  the practice of insuring against potential losses that result from adverse changes in exchange rates 
B)  the profit-motivated purchase and sale of interest-paying securities denominated in different currencies 
C)  the purchase or sale of a currency with the expectation that its value will change and generate a profit 
D)  the instantaneous purchase and sale of a currency in different markets for profit

Question 13

The microcredit concept was pioneered in developed countries as a way for developing countries to create the foundation for a market economy.

Accepted Answer

A) True 
 B)False

Question 14

A small group of low-income entrepreneurs from less-developed countries borrowing money at competitive rates with little or no collateral is called ________.

Accepted Answer

A)  microdebit 
B)  microcredit 
C)  capital loans 
D)  capital credit 
A)  microdebit 
B)  microcredit 
C)  capital loans 
D)  capital credit

Question 15

Interest arbitrage is ________.

Accepted Answer

A)  the practice of insuring against potential losses that result from adverse changes in exchange rates 
B)  the profit-motivated purchase and sale of interest-paying securities denominated in different currencies 
C)  the purchase or sale of a currency with the expectation that its value will change and generate a profit 
D)  the instantaneous purchase and sale of a currency in different markets for profit 
A)  the practice of insuring against potential losses that result from adverse changes in exchange rates 
B)  the profit-motivated purchase and sale of interest-paying securities denominated in different currencies 
C)  the purchase or sale of a currency with the expectation that its value will change and generate a profit 
D)  the instantaneous purchase and sale of a currency in different markets for profit

Question 16

Foreign bonds account for about ________ percent of all international bonds.

Accepted Answer

A)  20 to 25 
B)  25 to 40 
C)  50 to 70 
D)  more than 90 
A)  20 to 25 
B)  25 to 40 
C)  50 to 70 
D)  more than 90

Question 17

The ________ consists of all stocks bought and sold outside the issuer's home country.

Accepted Answer

internatio

Question 18

In a quoted exchange rate, the currency that is to be purchased with another currency is called the ________.

Accepted Answer

The answer of In a quoted exchange rate, the currency...

Question 19

A ________ is a contract requiring the exchange of an agreed-upon amount of a currency on an agreed-upon date at a specific exchange rate.

Accepted Answer

The answer of A ________ is a contract requiring the...

Question 20

If the money supply increases, its price in the form of interest rates also increases.

Accepted Answer

A) True 
 B)False

Currency speculation is ________.

The unbundling and repackaging of hard-to-trade financial assets into more liquid, negotiable, and marketable financial instruments is called ________.

Although historically more devoted to equity as a means of financing, Europe has more recently discovered the value of debt.

A debt instrument specifying the timing of principal and interest payments is called a ________.

The London Interbank Bid Rate (LIBID) is the interest rate that London banks charge other large banks for borrowing Eurocurrency.

The bid-ask spread in the foreign exchange market is the ________.

Which of the following is NOT true?

The rapid growth of the international capital market can be traced to three main factors: deregulation, innovative financial instruments, and information technology.

All currencies that are banked outside their countries of origin are called ________.

The market in which currencies are bought and sold and in which currency prices are determined is called the ________.

Currency arbitrage is ________.

The microcredit concept was pioneered in developed countries as a way for developing countries to create the foundation for a market economy.

A small group of low-income entrepreneurs from less-developed countries borrowing money at competitive rates with little or no collateral is called ________.

Interest arbitrage is ________.

Foreign bonds account for about ________ percent of all international bonds.

The ________ consists of all stocks bought and sold outside the issuer's home country.

In a quoted exchange rate, the currency that is to be purchased with another currency is called the ________.

A ________ is a contract requiring the exchange of an agreed-upon amount of a currency on an agreed-upon date at a specific exchange rate.

If the money supply increases, its price in the form of interest rates also increases.

Globalization

Cross-Cultrual Busines

Politics, Law, and Business Ethics

Economic Systems and Development

International Trade

Business-Government Trade Relations

Foreign Direct Investment

Regional Economic Integration

International Money System

International Strategy and Organization

Analyzing International Opportunities

Selecting and Managing Entry Modes

Developing and Marketing Products

Managing International Operations

Hiring and Managing Employees

Filters

Exam 9: International Financial Markets

Currency speculation is ________.

The unbundling and repackaging of hard-to-trade financial assets into more liquid, negotiable, and marketable financial instruments is called ________.

Although historically more devoted to equity as a means of financing, Europe has more recently discovered the value of debt.

A debt instrument specifying the timing of principal and interest payments is called a ________.

The London Interbank Bid Rate (LIBID) is the interest rate that London banks charge other large banks for borrowing Eurocurrency.

The bid-ask spread in the foreign exchange market is the ________.

Which of the following is NOT true?

The rapid growth of the international capital market can be traced to three main factors: deregulation, innovative financial instruments, and information technology.

All currencies that are banked outside their countries of origin are called ________.

The market in which currencies are bought and sold and in which currency prices are determined is called the ________.

Currency arbitrage is ________.

The microcredit concept was pioneered in developed countries as a way for developing countries to create the foundation for a market economy.

A small group of low-income entrepreneurs from less-developed countries borrowing money at competitive rates with little or no collateral is called ________.

Interest arbitrage is ________.

Foreign bonds account for about ________ percent of all international bonds.

The ________ consists of all stocks bought and sold outside the issuer's home country.

In a quoted exchange rate, the currency that is to be purchased with another currency is called the ________.

A ________ is a contract requiring the exchange of an agreed-upon amount of a currency on an agreed-upon date at a specific exchange rate.

If the money supply increases, its price in the form of interest rates also increases.

Globalization

Cross-Cultrual Busines

Politics, Law, and Business Ethics

Economic Systems and Development

International Trade

Business-Government Trade Relations

Foreign Direct Investment

Regional Economic Integration

International Money System

International Strategy and Organization

Analyzing International Opportunities

Selecting and Managing Entry Modes

Developing and Marketing Products

Managing International Operations

Hiring and Managing Employees

Filters