Question 1

Which of the following is a major purpose of the international capital market?

Accepted Answer

A) to reduce entrepreneurial initiatives 
B) to increase the cost of borrowing 
C) to reduce risk for lenders 
D) to reduce the money supply for borrowers 
A) to reduce entrepreneurial initiatives 
B) to increase the cost of borrowing 
C) to reduce risk for lenders 
D) to reduce the money supply for borrowers

Question 2

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

Accepted Answer

A) International Finance Corporation 
B) Eurocurrency market 
C) interbank market 
D) World Bank 
A) International Finance Corporation 
B) Eurocurrency market 
C) interbank market 
D) World Bank

Question 3

Differentiate between currency speculation and currency arbitrage.

Accepted Answer

Currency speculation is the purchase or

Question 4

With the help of microfinance,low-income entrepreneurs can borrow money at competitive rates without having to put anything up as collateral.

Accepted Answer

A) True 
 B)False

Question 5

________ in the foreign exchange market specialize in currency futures and options transactions.

Accepted Answer

A) Securities exchanges 
B) Eurocurrency markets 
C) Interbank markets 
D) Over-the-counter markets 
A) Securities exchanges 
B) Eurocurrency markets 
C) Interbank markets 
D) Over-the-counter markets

Question 6

Explain the role of equity in a national capital market.What factors are responsible for the growth of the international equity market?

Accepted Answer

Equity is part ownership of a company in

Question 7

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

Accepted Answer

A) currency hedging 
B) commercialization 
C) currency arbitrage 
D) securitization 
A) currency hedging 
B) commercialization 
C) currency arbitrage 
D) securitization

Question 8

An exchange rate requiring delivery of the traded currency within two business days is called a cross rate.

Accepted Answer

A) True 
 B)False

Question 9

When doing business with former communist countries,Trader's Paradise insists on getting paid in a currency that can be traded freely in the foreign exchange market.The price of this currency is determined by the forces of supply and demand.Which of the following is the mode of payment illustrated in this scenario?

Accepted Answer

A) community currency 
B) private currency 
C) local currency 
D) convertible currency 
A) community currency 
B) private currency 
C) local currency 
D) convertible currency

Question 10

Eurobonds are popular because ________.

Accepted Answer

A) they are less risky than traditional bonds 
B) they are always denominated in euros 
C) governments of nations in which they are sold do not regulate them 
D) European companies are considered very stable 
A) they are less risky than traditional bonds 
B) they are always denominated in euros 
C) governments of nations in which they are sold do not regulate them 
D) European companies are considered very stable

Question 11

The exchange rate between the euro (€)and the dollar is €0.8461/$.Which of the following is the correct direct quote on the dollar?

Accepted Answer

A) $2.20/€ 
B) $1.1819/€ 
C) $5.50/€ 
D) $0.8461/€ 
A) $2.20/€ 
B) $1.1819/€ 
C) $5.50/€ 
D) $0.8461/€

Question 12

One of the major forces responsible for the rapid growth rate of the international capital market is ________.

Accepted Answer

A) economic nationalism 
B) information technology 
C) currency control 
D) extensive regulation 
A) economic nationalism 
B) information technology 
C) currency control 
D) extensive regulation

Question 13

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

Accepted Answer

A) interest arbitrage 
B) forward contract 
C) forward rate 
D) cross rate 
A) interest arbitrage 
B) forward contract 
C) forward rate 
D) cross rate

Question 14

The exchange rate at which a bank will purchase a currency is called a ________ rate.

Accepted Answer

A) prime 
B) buy 
C) ask 
D) forward 
A) prime 
B) buy 
C) ask 
D) forward

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Governments impose currency restrictions in their countries to ________.

Accepted Answer

A) encourage future investment outflows 
B) indirectly reduce imports and exports 
C) protect currencies from speculators 
D) exhaust their reserve of hard currencies 
A) encourage future investment outflows 
B) indirectly reduce imports and exports 
C) protect currencies from speculators 
D) exhaust their reserve of hard currencies

Question 17

A(n)________ is a system that allocates financial resources in the form of debt and equity according to their most efficient uses.

Accepted Answer

A) international equity market 
B) forward market 
C) capital market 
D) eurocurrency market 
A) international equity market 
B) forward market 
C) capital market 
D) eurocurrency market

Question 18

The profit-motivated purchase and sale of interest-paying securities denominated in different currencies is called ________.

Accepted Answer

A) currency conversion 
B) currency hedging 
C) interest arbitrage 
D) interbank interest rates 
A) currency conversion 
B) currency hedging 
C) interest arbitrage 
D) interbank interest rates

Question 19

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

Accepted Answer

A) equity 
B) exchange rate 
C) stock 
D) debt 
A) equity 
B) exchange rate 
C) stock 
D) debt

Question 20

British pounds of a British trading company that are deposited in a U.S.bank are called ________.

Accepted Answer

A) Eurodollars 
B) U)S.dollars 
C) Europounds 
D) Pounds 
A) Eurodollars 
B) U)S.dollars 
C) Europounds 
D) Pounds

Which of the following is a major purpose of the international capital market?

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

Differentiate between currency speculation and currency arbitrage.

With the help of microfinance,low-income entrepreneurs can borrow money at competitive rates without having to put anything up as collateral.

________ in the foreign exchange market specialize in currency futures and options transactions.

Explain the role of equity in a national capital market.What factors are responsible for the growth of the international equity market?

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

An exchange rate requiring delivery of the traded currency within two business days is called a cross rate.

Eurobonds are popular because ________.

The exchange rate between the euro (€)and the dollar is €0.8461/$.Which of the following is the correct direct quote on the dollar?

One of the major forces responsible for the rapid growth rate of the international capital market is ________.

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

The exchange rate at which a bank will purchase a currency is called a ________ rate.

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

Governments impose currency restrictions in their countries to ________.

A(n)________ is a system that allocates financial resources in the form of debt and equity according to their most efficient uses.

The profit-motivated purchase and sale of interest-paying securities denominated in different currencies is called ________.

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

British pounds of a British trading company that are deposited in a U.S.bank are called ________.

Globalization

Cross-Cultural Business

Political Economy and Ethics

Economic Development of Nations

International Trade Theory

Political Economy of Trade

Foreign Direct Investment

Regional Economic Integration

International Monetary 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

Which of the following is a major purpose of the international capital market?

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

Differentiate between currency speculation and currency arbitrage.

With the help of microfinance,low-income entrepreneurs can borrow money at competitive rates without having to put anything up as collateral.

________ in the foreign exchange market specialize in currency futures and options transactions.

Explain the role of equity in a national capital market.What factors are responsible for the growth of the international equity market?

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

An exchange rate requiring delivery of the traded currency within two business days is called a cross rate.

Eurobonds are popular because ________.

The exchange rate between the euro (€)and the dollar is €0.8461/$.Which of the following is the correct direct quote on the dollar?

One of the major forces responsible for the rapid growth rate of the international capital market is ________.

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

The exchange rate at which a bank will purchase a currency is called a ________ rate.

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

Governments impose currency restrictions in their countries to ________.

A(n)________ is a system that allocates financial resources in the form of debt and equity according to their most efficient uses.

The profit-motivated purchase and sale of interest-paying securities denominated in different currencies is called ________.

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

British pounds of a British trading company that are deposited in a U.S.bank are called ________.

Globalization

Cross-Cultural Business

Political Economy and Ethics

Economic Development of Nations

International Trade Theory

Political Economy of Trade

Foreign Direct Investment

Regional Economic Integration

International Monetary 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