Exam 9: International Financial Markets

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

Companies use interest arbitrage to find better interest rates abroad than those that are available in their home countries.

Fully convertible currencies are also called ________.

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

The international bond market consists of all bonds sold by issuing companies,governments,or other organizations ________.

Rates that the world's largest banks charge one another for loans are called ________.

Scenario: Trader's Paradise Trader's Paradise is a global merchant that sells a variety of products. The company operates in forty-eight different countries (some developed, some developing) and some former communist countries. The company faces substantial risks given the differing conditions in foreign exchange markets. -If Trader's Paradise purchases euros expecting the value to rise and generate a profit for the company,it is engaging in currency ________.

International banks participate in the swap market by acting as broker or by undertaking half of a swap for its own account.

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

The forces of supply and demand play no role in determining rates of exchange and currency prices.

The rate at which one currency is expressed in relation to the currency of another country is called the ________.

The stock market is also known as the ________.

While designating an exchange rate,the numerator indicates the ________.

Booking centers are typically home to offshore branches of domestic banks that use them merely as bookkeeping facilities to record tax and currency-exchange information.

Investors use the foreign exchange market for ________.

________ refers to the most commonly quoted interest rate that London banks charge other large banks that borrow Eurocurrency.

In the interbank market,the process of aggregating the currencies that one bank owes another and then carrying out that transaction is called ________.

What is currency speculation? Why do some governments protect their markets from currency speculation?

While designating an exchange rate,the ________ is always the denominator.

Currency speculation is the purchase or sale of a currency with the expectation that its value will remain fluctuate.