Question 1

A country whose banking system is organized to permit external accounts beyond the normal economic activity of the country is called:

Accepted Answer

A)  representative country. 
B)  offshore banking centre. 
C)  onshore banking centre. 
D)  full service country. 
A)  representative country. 
B)  offshore banking centre. 
C)  onshore banking centre. 
D)  full service country.

Question 2

Which of the following is an example of a Eurodollar?

Accepted Answer

A)  A dollar deposit in an American bank. 
B)  A Yen deposit in a Japanese bank. 
C)  A dollar deposit in a French bank. 
D)  Euro deposited in European bank. 
A)  A dollar deposit in an American bank. 
B)  A Yen deposit in a Japanese bank. 
C)  A dollar deposit in a French bank. 
D)  Euro deposited in European bank.

Question 3

A small service facility staffed by parent bank personnel that is designed to assist MNC clients of the parent bank in dealings with the bank's correspondents is called:

Accepted Answer

A)  Correspondent bank. 
B)  Representative office. 
C)  Foreign branch. 
D)  Subsidiary bank. 
A)  Correspondent bank. 
B)  Representative office. 
C)  Foreign branch. 
D)  Subsidiary bank.

Question 4

A locally incorporated bank that is either wholly owned or owned in major part by a foreign parent is called:

Accepted Answer

A)  Correspondent bank 
B)  Representative office 
C)  Foreign branch 
D)  Subsidiary bank 
A)  Correspondent bank 
B)  Representative office 
C)  Foreign branch 
D)  Subsidiary bank

Question 5

The payment amount under this FRA is (consider 360 days in a year):

Accepted Answer

A)  $9,985 
B)  $10,111 
C)  $60,667 
D)  $120,000 
A)  $9,985 
B)  $10,111 
C)  $60,667 
D)  $120,000

Question 6

ABC Bank (seller) has made a "three against six" Forward Rate Agreement (FRA), with XYZ Bank (buyer). The notional amount is $1,000,000, the settlement rate is 7%, the agreement rate is 6% and the actual number of days in the three-month agreement period is 92.
-Which of the following statements is true?

Accepted Answer

A)  ABC Bank will pay XYZ Bank a cash settlement at the beginning of the 92-day FRA period 
B)  XYZ Bank will pay ABC Bank a cash settlement at the beginning of the 92-day FRA period 
C)  ABC Bank will pay XYZ Bank a cash settlement at the end of the 92-day FRA period 
D)  XYZ Bank will pay ABC Bank a cash settlement at the end of the 92-day FRA period 
A)  ABC Bank will pay XYZ Bank a cash settlement at the beginning of the 92-day FRA period 
B)  XYZ Bank will pay ABC Bank a cash settlement at the beginning of the 92-day FRA period 
C)  ABC Bank will pay XYZ Bank a cash settlement at the end of the 92-day FRA period 
D)  XYZ Bank will pay ABC Bank a cash settlement at the end of the 92-day FRA period

Question 7

ABC International can borrow $4,000,000 at LIBOR plus a lending margin of 0.65 percent per annum on a three-month rollover basis from Barclays in London.Three month LIBOR is currently 5.5 percent.Suppose that over the second three-month interval LIBOR falls to 5.0 percent.How much will ABC pay in interest to Barclays over the six-month period for the Eurodollar loan?

Accepted Answer

A)  $50,000 
B)  $100,000 
C)  $118,000 
D)  $120,000 
A)  $50,000 
B)  $100,000 
C)  $118,000 
D)  $120,000

A country whose banking system is organized to permit external accounts beyond the normal economic activity of the country is called:

Which of the following is an example of a Eurodollar?

A small service facility staffed by parent bank personnel that is designed to assist MNC clients of the parent bank in dealings with the bank's correspondents is called:

A locally incorporated bank that is either wholly owned or owned in major part by a foreign parent is called:

The payment amount under this FRA is (consider 360 days in a year):

Globalization and the Multinational Firm

International Monetary System

Balance of Payments

The Market for Foreign Exchange

International Parity Relationships and Forecasting Foreign Exchange Rates

International Bond Market

International Equity Markets

Futures and Options on Foreign Exchange

Interest Rate and Currency Swaps

International Portfolio Investment

Management of Economic Exposure

Management of Transaction Exposure

Management of Translation Exposure

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

Exports and Imports

International Tax Environment

Corporate Governance Around the World

Filters

Exam 6: International Banking and Money Market

A country whose banking system is organized to permit external accounts beyond the normal economic activity of the country is called:

Which of the following is an example of a Eurodollar?

A small service facility staffed by parent bank personnel that is designed to assist MNC clients of the parent bank in dealings with the bank's correspondents is called:

A locally incorporated bank that is either wholly owned or owned in major part by a foreign parent is called:

The payment amount under this FRA is (consider 360 days in a year):

Globalization and the Multinational Firm

International Monetary System

Balance of Payments

The Market for Foreign Exchange

International Parity Relationships and Forecasting Foreign Exchange Rates

International Bond Market

International Equity Markets

Futures and Options on Foreign Exchange

Interest Rate and Currency Swaps

International Portfolio Investment

Management of Economic Exposure

Management of Transaction Exposure

Management of Translation Exposure

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

Exports and Imports

International Tax Environment

Corporate Governance Around the World

Filters