Exam 9: International Financial Markets

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

Bonds sold outside the borrower's country and denominated in the currency of the country in which they are sold are called ________.

________ are usually located on small island nations or territories with favorable tax and/or secrecy laws.

All of Europe's currencies combined are referred to as Eurocurrency.

________ dominates the foreign exchange market.

Why do governments impose currency restrictions and how can companies get around such restrictions?

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

The rate at which one currency is interchanged for another is called the ________.

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

Briefly describe the three main institutions of the foreign exchange market.

How does the international capital market reduce the cost of money for borrowers? What are the two components for every quoted exchange rate?

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

Describe the purposes of the international capital market.What factors account for its rapid growth?

The practice of insuring against potential losses that result from adverse changes in exchange rates is called currency ________.

What is an offshore financial center? Differentiate between an operational center and a booking center,providing examples for each.

If an individual is traveling to another country and wants to exchange currencies at his bank before departing,he will be quoted the spot rate since he is exchanging on the spot.

An offshore financial center is usually characterized by ________.

The international bond market consists of all bonds sold by issuing companies outside their own countries.

International transactions between two currencies other than the U.S.dollar often use the dollar as a vehicle currency.

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