Exam 9: International Financial Markets

Typical buyers of international bonds include medium- and large-sized banks, pension funds, mutual funds, and governments with excess financial reserves.

A currency used as an intermediary to convert funds between two other currencies is called a(n) ________.

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

In any exchange rate, the quoted currency is always the numerator and the base currency is always the denominator.

One goal of currency restriction is to preserve hard currencies to pay for imports and to finance trade deficits.

Foreign bonds issued in Japan are called ________.

Which of the following denotes a stock market with no central geographic location?

Identify and discuss strategies for effective foreign exchange management.

The world's largest banks exchange currencies at spot and forward rates in the ________.

An exchange rate calculated using two other exchange rates is called a ________.

Eurobonds account for ________ percent of all international bonds.

The exchange rate at which two parties agree to exchange currencies on a specified future date is called a ________.

An offshore financial center is a country or territory whose financial sector features very few regulations and few, if any, taxes.

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

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

Increased regulation of national capital markets has been instrumental in the expansion of the international capital market.

Briefly describe any two of the three main components of the international capital market.

Securitization is the unbundling and repackaging of hard-to-trade financial assets into more liquid, negotiable, and marketable financial instruments.

A ________ is a currency used as an intermediary to convert funds between two other currencies.

The absence of government regulation in the Eurobond market ________.