Exam 9: International Financial Markets

If a currency's forward rate is higher than its spot rate, the currency is trading at a ________.

________ is a prominent operational center.

Foreign bonds issued and traded in Asia outside Japan are called ________.

A ________ is a right to exchange a specific amount of a currency on a specific date at a specific rate.

The international capital market's rapid growth rate is traced to all these EXCEPT ________.

The spread of privatization is encouraging the growth of the international equity market.

Foreign bonds issued in the U.K. are called ________.

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

Typical buyers of bonds include all of the following EXCEPT ________.

The process of aggregating the currencies that one bank owes another and then carrying out that transaction is called ________.

Loans in which the borrower promises to repay the borrowed amount (the principal) plus a predetermined rate of interest is called ________.

The international financial market is composed of two interrelated systems called the ________ and the ________.

Describe the purposes of the international capital market, and the factors accounting for its rapid growth.

Scenario: Sally goes to Japan Sally Johnson has identified a market for her company's products in Japan. She is excited about expanding her company, but knows she needs to learn how the foreign exchange market works before she can successfully sell her products abroad. -If Sally knows that ¥117.87/$, she also knows that ________.

________ is the simultaneous purchase and sale of a currency in different markets for profit.

The ________ consists of all bonds sold by issuing companies, governments, or other organizations outside their own countries.

High interest rates outside the developed nations have fueled increased activity in the international bond market.

A currency swap is the simultaneous purchase and sale of foreign exchange for two different dates.

If you are traveling to another country and want to exchange currencies at your bank before departing, you will be quoted the spot rate since you are exchanging on the spot.

The international capital market is a network of individuals, companies, financial institutions, and governments that invest and borrow across national boundaries.