Question 1

Which of the following represents a country or territory whose financial sector features very few regulations and few,if any,taxes?

Accepted Answer

A) offshore financial center 
B) interbank market 
C) international financial services district 
D) Eurocurrency market 
A) offshore financial center 
B) interbank market 
C) international financial services district 
D) Eurocurrency market

Question 2

Banks in the interbank market ________.

Accepted Answer

A) provide long-term loans to small-sized and medium-sized companies 
B) provide long-term loans to large companies 
C) offer advice on trading strategies 
D) exchange currencies exclusively at spot rates 
A) provide long-term loans to small-sized and medium-sized companies 
B) provide long-term loans to large companies 
C) offer advice on trading strategies 
D) exchange currencies exclusively at spot rates

Question 3

Company debt normally takes the form of ________.

Accepted Answer

A) bonds 
B) equity 
C) stocks 
D) bank loans 
A) bonds 
B) equity 
C) stocks 
D) bank loans

Question 4

The London Interbank Bid Rate (LIBID)is the interest rate that London banks charge other large banks for borrowing Eurocurrency.

Accepted Answer

A) True 
 B)False

Question 5

Major financial activities take place in booking centers.

Accepted Answer

A) True 
 B)False

Question 6

Investors increase risk by holding international securities whose prices move independently.

Accepted Answer

A) True 
 B)False

Question 7

A currency used as an intermediary to convert funds between two other currencies in the foreign exchange market is called a ________.

Accepted Answer

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

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

ABC Software
ABC Software is a producer of educational software for children below the age of twelve.The company has operations in Switzerland and would like to expand its foreign operations with a new facility in China.
-The company's financial advisors recommend that ABC Software conduct most of its business in a vehicle currency.Which of the following is true of vehicle currencies?

Accepted Answer

A) A vehicle currency is a contract that requires the exchange of an agreed-upon amount of a currency on an agreed-upon date at a specific exchange rate. 
B) The U.S.dollar,Australian dollar,Japanese yen,and British pound are all examples of vehicle currencies. 
C) The U.S.dollar became a vehicle currency after World War II when all of the world's major currencies were tied indirectly to the dollar because it was the most stable currency. 
D) The Chinese yuan is expected to become a vehicle currency in the near future as China's position in world trade continues to grow. 
A) A vehicle currency is a contract that requires the exchange of an agreed-upon amount of a currency on an agreed-upon date at a specific exchange rate. 
B) The U.S.dollar,Australian dollar,Japanese yen,and British pound are all examples of vehicle currencies. 
C) The U.S.dollar became a vehicle currency after World War II when all of the world's major currencies were tied indirectly to the dollar because it was the most stable currency. 
D) The Chinese yuan is expected to become a vehicle currency in the near future as China's position in world trade continues to grow.

Question 10

ABC Software
ABC Software is a producer of educational software for children below the age of twelve.The company has operations in Switzerland and would like to expand its foreign operations with a new facility in China.
-ABC Software has had difficulty obtaining funds to expand.A friend of the CEO recommends that the company should explore an offshore financial center,which ________.

Accepted Answer

A) is a country or territory whose financial sector features very few regulations and few,if any,taxes 
B) tends to be characterized by political and economic instability making,it is an inexpensive but risky source of funds 
C) typically lends money to companies that have had difficulty getting financing elsewhere because of poor credit records 
D) is a financial center located in a resort community and is characterized by poor telecommunications infrastructure 
A) is a country or territory whose financial sector features very few regulations and few,if any,taxes 
B) tends to be characterized by political and economic instability making,it is an inexpensive but risky source of funds 
C) typically lends money to companies that have had difficulty getting financing elsewhere because of poor credit records 
D) is a financial center located in a resort community and is characterized by poor telecommunications infrastructure

Question 11

All foreign exchange transactions can be performed in the over-the-counter (OTC)market.

Accepted Answer

A) True 
 B)False

Question 12

The spread of privatization encourages the growth of the international equity market.

Accepted Answer

A) True 
 B)False

Question 13

The market consisting of all the world's currencies that are banked outside their countries of origin is called the ________.

Accepted Answer

A) foreign exchange market 
B) interbank market 
C) Eurocurrency market 
D) offshore financial center 
A) foreign exchange market 
B) interbank market 
C) Eurocurrency market 
D) offshore financial center

Question 14

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

Accepted Answer

A) bulldog bonds 
B) yankee bonds 
C) samurai bonds 
D) dragon bonds 
A) bulldog bonds 
B) yankee bonds 
C) samurai bonds 
D) dragon bonds

Question 15

The world's three most important financial centers are ________.

Accepted Answer

A) Zurich,Paris,and Washington 
B) China,Brazil,and Mexico 
C) Tokyo,London,and New York 
D) Dubai,Beijing,and Germany 
A) Zurich,Paris,and Washington 
B) China,Brazil,and Mexico 
C) Tokyo,London,and New York 
D) Dubai,Beijing,and Germany

Question 16

The bid-ask spread in the foreign exchange market is the ________.

Accepted Answer

A) price at which a bank will buy a currency 
B) price of currency in the foreign exchange market 
C) difference between the bid and ask quotes for a currency 
D) the time lapsed between a bid quote and an ask quote 
A) price at which a bank will buy a currency 
B) price of currency in the foreign exchange market 
C) difference between the bid and ask quotes for a currency 
D) the time lapsed between a bid quote and an ask quote

Question 17

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

Accepted Answer

A) London Interbank Offer Rate (LIBOR) 
B) London Interbank Bid Rate (LIBI
D)  
C) Spot rate 
D) Cross rate 
A) London Interbank Offer Rate (LIBOR) 
B) London Interbank Bid Rate (LIBI
D)  
C) Spot rate 
D) Cross rate

Question 18

Which of the following is used by governments for the convertibility of currencies in their countries?

Accepted Answer

A) multiple exchange rates 
B) countertrade 
C) import deposit requirements 
D) OTC market 
A) multiple exchange rates 
B) countertrade 
C) import deposit requirements 
D) OTC market

Question 19

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

Accepted Answer

A) forward 
B) prime 
C) spot 
D) cross 
A) forward 
B) prime 
C) spot 
D) cross

Question 20

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

Accepted Answer

A) interbank interest rates 
B) London Interbank Bid Rates 
C) exchange rates 
D) official bank rates 
A) interbank interest rates 
B) London Interbank Bid Rates 
C) exchange rates 
D) official bank rates

Which of the following represents a country or territory whose financial sector features very few regulations and few,if any,taxes?

Banks in the interbank market ________.

Company debt normally takes the form of ________.

The London Interbank Bid Rate (LIBID)is the interest rate that London banks charge other large banks for borrowing Eurocurrency.

Major financial activities take place in booking centers.

Investors increase risk by holding international securities whose prices move independently.

A currency used as an intermediary to convert funds between two other currencies in the foreign exchange market is called a ________.

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

All foreign exchange transactions can be performed in the over-the-counter (OTC)market.

The spread of privatization encourages the growth of the international equity market.

The market consisting of all the world's currencies that are banked outside their countries of origin is called the ________.

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

The world's three most important financial centers are ________.

The bid-ask spread in the foreign exchange market is the ________.

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

Which of the following is used by governments for the convertibility of currencies in their countries?

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

Rates that the world's largest banks charge one another for loans 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 represents a country or territory whose financial sector features very few regulations and few,if any,taxes?

Banks in the interbank market ________.

Company debt normally takes the form of ________.

The London Interbank Bid Rate (LIBID)is the interest rate that London banks charge other large banks for borrowing Eurocurrency.

Major financial activities take place in booking centers.

Investors increase risk by holding international securities whose prices move independently.

A currency used as an intermediary to convert funds between two other currencies in the foreign exchange market is called a ________.

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

All foreign exchange transactions can be performed in the over-the-counter (OTC)market.

The spread of privatization encourages the growth of the international equity market.

The market consisting of all the world's currencies that are banked outside their countries of origin is called the ________.

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

The world's three most important financial centers are ________.

The bid-ask spread in the foreign exchange market is the ________.

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

Which of the following is used by governments for the convertibility of currencies in their countries?

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

Rates that the world's largest banks charge one another for loans 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