Question 1

Corporations can use the shelf registration method for Yankee bonds,because:

Accepted Answer

A)  pre-registered securities can be quickly brought to market. 
B)  the main registration period is eliminated for up to three years. 
C)  investment bankers prefer to handle issues this way. 
D)  investment bankers earn more fees in the process. 
A)  pre-registered securities can be quickly brought to market. 
B)  the main registration period is eliminated for up to three years. 
C)  investment bankers prefer to handle issues this way. 
D)  investment bankers earn more fees in the process.

Question 2

In the international financial markets,a euronote is a:

Accepted Answer

A)  short-term international security paying interest annually. 
B)  short-term international security paying interest semi-annually. 
C)  long-term international security paying interest annually. 
D)  short-term international security discounted at less than face value. 
A)  short-term international security paying interest annually. 
B)  short-term international security paying interest semi-annually. 
C)  long-term international security paying interest annually. 
D)  short-term international security discounted at less than face value.

Question 3

Debt issues with a credit rating of ________ and above are regarded as investment grade by the S&P rating agency.

Accepted Answer

A)  BCC 
B)  BB- 
C)  BBB 
D)  BB+ 
A)  BCC 
B)  BB- 
C)  BBB 
D)  BB+

Question 4

Borrowers may access the international debt markets if:

Accepted Answer

A)  they have a number of debt issues already. 
B)  they have a large number of shares on issue. 
C)  a large number of investors are willing to buy their shares. 
D)  they have good credit standing. 
A)  they have a number of debt issues already. 
B)  they have a large number of shares on issue. 
C)  a large number of investors are willing to buy their shares. 
D)  they have good credit standing.

Question 5

Euro floating rate notes are bonds with floating:

Accepted Answer

A)  par values. 
B)  maturities. 
C)  coupon rates. 
D)  call provisions. 
A)  par values. 
B)  maturities. 
C)  coupon rates. 
D)  call provisions.

Question 6

Announcements of availability of new issues of eurobonds that appear as advertisements in the financial press are known as:

Accepted Answer

A)  tombstone ads. 
B)  prospectus ads. 
C)  red herring ads. 
D)  subscribers' ads. 
A)  tombstone ads. 
B)  prospectus ads. 
C)  red herring ads. 
D)  subscribers' ads.

Question 7

Consider the following five statements. i.A eurobond is a bond issued by a foreign borrower in a currency that is not the currency of the country in which the bond is issued.
ii.Eurobonds tend to be bought mainly by banks and institutional investors,rather than by individuals.
iii.Straight eurobonds are fixed-interest securities with periodic coupon payments.
iv.FRNs are coupon instruments; however,the coupon is reset periodically throughout the term of the note.
v.Convertible notes give the holder the option to convert the bond,on predetermined terms,into another form of instrument such as equity.
How many of these statements are true and how many are false?

Accepted Answer

A)  1 statement is true and 4 are false. 
B)  3 statements are true and 2 are false. 
C)  2 statements are true and 3 are false. 
D)  4 statements are true and 1 is false. 
A)  1 statement is true and 4 are false. 
B)  3 statements are true and 2 are false. 
C)  2 statements are true and 3 are false. 
D)  4 statements are true and 1 is false.

Question 8

Which of the following is NOT a feature of a typical eurocurrency term loan?

Accepted Answer

A)  For large amounts, a syndicate of banks can be involved. 
B)  The term of the loan is generally between 5 and ten years. 
C)  Loans are frequently drawn down in full at the commencement. 
D)  The loans are generally unregistered, bearer securities. 
A)  For large amounts, a syndicate of banks can be involved. 
B)  The term of the loan is generally between 5 and ten years. 
C)  Loans are frequently drawn down in full at the commencement. 
D)  The loans are generally unregistered, bearer securities.

Question 9

Compared with a short-term advance in the domestic markets,a eurocurrency short-term advance:

Accepted Answer

A)  may involve a revolving credit arrangement. 
B)  is generally denominated in US dollars. 
C)  has a rate of interest determined by the borrower's credit risk. 
D)  is all of the given answers. 
A)  may involve a revolving credit arrangement. 
B)  is generally denominated in US dollars. 
C)  has a rate of interest determined by the borrower's credit risk. 
D)  is all of the given answers.

Question 10

A eurocommercial paper facility is an arrangement where P-notes are issued without an underwriter.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is NOT an advantage for eurobond borrowers or investors?

Accepted Answer

A)  They may be rapidly issued into the international markets. 
B)  There is a lack of home-country regulation. 
C)  The lack of regulation in the countries in which they are put up for sale. 
D)  The eurobond underwriters are not obliged to maintain the bond's market price at or above the issue price. 
A)  They may be rapidly issued into the international markets. 
B)  There is a lack of home-country regulation. 
C)  The lack of regulation in the countries in which they are put up for sale. 
D)  The eurobond underwriters are not obliged to maintain the bond's market price at or above the issue price.

Question 12

The provision that allows a lender to convert a loan into saleable certificates with the same terms and conditions is called:

Accepted Answer

A)  assignable loan credentials 
B)  convertible loan credentials 
C)  transferable loan certificates 
D)  novation 
A)  assignable loan credentials 
B)  convertible loan credentials 
C)  transferable loan certificates 
D)  novation

Question 13

The term basis point used for the margin added to the indicator rate is:

Accepted Answer

A)  0.01 
B)  0.001 
C)  0.0001 
D)  0 1% 
A)  0.01 
B)  0.001 
C)  0.0001 
D)  0 1%

Question 14

Which of the following is NOT correct regarding ADRs?

Accepted Answer

A)  The ADR market is deep and liquid. 
B)  An ADR facility can be established for private placement of new shares in accordance with Rule 154A of the Securities Act 1963. 
C)  A depository share is generally composed of more than one share of the foreign issuer. 
D)  Currently there are a large number of depository receipts, traded in many countries. 
A)  The ADR market is deep and liquid. 
B)  An ADR facility can be established for private placement of new shares in accordance with Rule 154A of the Securities Act 1963. 
C)  A depository share is generally composed of more than one share of the foreign issuer. 
D)  Currently there are a large number of depository receipts, traded in many countries.

Question 15

The majority of financial instruments in the euromarkets are currently denominated in:

Accepted Answer

A)  euros. 
B)  Japanese yen. 
C)  British pounds. 
D)  US dollars. 
A)  euros. 
B)  Japanese yen. 
C)  British pounds. 
D)  US dollars.

Question 16

Under a/an _____ agreement,the original lender may transfer all the rights and obligations of the original loan agreement to a third party.

Accepted Answer

A)  assignable 
B)  convertible 
C)  novation 
D)  redeemable 
A)  assignable 
B)  convertible 
C)  novation 
D)  redeemable

Question 17

A short-term bank advance in the eurocurrency markets may be extended to a revolving credit arrangement whereby the bank agrees to roll over the loan facility.

Accepted Answer

A) True 
 B)False

Question 18

A eurodollar is an AUD-denominated bank deposit held in a bank outside Australia.

Accepted Answer

A) True 
 B)False

Question 19

The higher the credit rating given to a bond issue:

Accepted Answer

A)  the higher the credit risk. 
B)  the higher the yield. 
C)  the lower the yield. 
D)  the higher the country risk. 
A)  the higher the credit risk. 
B)  the higher the yield. 
C)  the lower the yield. 
D)  the higher the country risk.

Question 20

Compared with a euronote issuance facility,transferable loan certificates are:

Accepted Answer

A)  issued directly into the euromarkets by the bank. 
B)  intermediated loans by the bank involved. 
C)  funded by the borrower selling into the euromarkets. 
D)  unregistered bearer securities. 
A)  issued directly into the euromarkets by the bank. 
B)  intermediated loans by the bank involved. 
C)  funded by the borrower selling into the euromarkets. 
D)  unregistered bearer securities.

Corporations can use the shelf registration method for Yankee bonds,because:

In the international financial markets,a euronote is a:

Debt issues with a credit rating of ________ and above are regarded as investment grade by the S&P rating agency.

Borrowers may access the international debt markets if:

Euro floating rate notes are bonds with floating:

Announcements of availability of new issues of eurobonds that appear as advertisements in the financial press are known as:

Which of the following is NOT a feature of a typical eurocurrency term loan?

Compared with a short-term advance in the domestic markets,a eurocurrency short-term advance:

A eurocommercial paper facility is an arrangement where P-notes are issued without an underwriter.

Which of the following is NOT an advantage for eurobond borrowers or investors?

The provision that allows a lender to convert a loan into saleable certificates with the same terms and conditions is called:

The term basis point used for the margin added to the indicator rate is:

Which of the following is NOT correct regarding ADRs?

The majority of financial instruments in the euromarkets are currently denominated in:

Under a/an _____ agreement,the original lender may transfer all the rights and obligations of the original loan agreement to a third party.

A short-term bank advance in the eurocurrency markets may be extended to a revolving credit arrangement whereby the bank agrees to roll over the loan facility.

A eurodollar is an AUD-denominated bank deposit held in a bank outside Australia.

The higher the credit rating given to a bond issue:

Compared with a euronote issuance facility,transferable loan certificates are:

A Modern Financial System: An Overview

Commercial Banks

Non-Bank Financial Institutions

The Share Market and the Corporation

Corporations Issuing Equity in the Share Market

Investors in the Share Market

Forecasting Share Price Movements

Mathematics of Finance: An Introduction to Basic Concepts and Calculations

Short-Term Debt

Medium-To-Long-Term Debt

Government Debt, monetary Policy and the Payments System

An Introduction to Interest Rate Determination and Forecasting

Interest Rate Risk

Foreign Exchange: The Structure and Operation of the Fx Market

Foreign Exchange: Factors That Influence the Exchange Rate

Foreign Exchange: Risk Identification and Management

An Introduction to Risk Management and Derivatives

Future Contracts and Forward Rate Agreements

Options

Interest Rate Swaps, Cross-Currency Swaps and Credit Default

Filters

Exam 11: International Debt Markets

Corporations can use the shelf registration method for Yankee bonds,because:

In the international financial markets,a euronote is a:

Debt issues with a credit rating of ________ and above are regarded as investment grade by the S&P rating agency.

Borrowers may access the international debt markets if:

Euro floating rate notes are bonds with floating:

Announcements of availability of new issues of eurobonds that appear as advertisements in the financial press are known as:

Which of the following is NOT a feature of a typical eurocurrency term loan?

Compared with a short-term advance in the domestic markets,a eurocurrency short-term advance:

A eurocommercial paper facility is an arrangement where P-notes are issued without an underwriter.

Which of the following is NOT an advantage for eurobond borrowers or investors?

The provision that allows a lender to convert a loan into saleable certificates with the same terms and conditions is called:

The term basis point used for the margin added to the indicator rate is:

Which of the following is NOT correct regarding ADRs?

The majority of financial instruments in the euromarkets are currently denominated in:

Under a/an _____ agreement,the original lender may transfer all the rights and obligations of the original loan agreement to a third party.

A short-term bank advance in the eurocurrency markets may be extended to a revolving credit arrangement whereby the bank agrees to roll over the loan facility.

A eurodollar is an AUD-denominated bank deposit held in a bank outside Australia.

The higher the credit rating given to a bond issue:

Compared with a euronote issuance facility,transferable loan certificates are:

A Modern Financial System: An Overview

Commercial Banks

Non-Bank Financial Institutions

The Share Market and the Corporation

Corporations Issuing Equity in the Share Market

Investors in the Share Market

Forecasting Share Price Movements

Mathematics of Finance: An Introduction to Basic Concepts and Calculations

Short-Term Debt

Medium-To-Long-Term Debt

Government Debt, monetary Policy and the Payments System

An Introduction to Interest Rate Determination and Forecasting

Interest Rate Risk

Foreign Exchange: The Structure and Operation of the Fx Market

Foreign Exchange: Factors That Influence the Exchange Rate

Foreign Exchange: Risk Identification and Management

An Introduction to Risk Management and Derivatives

Future Contracts and Forward Rate Agreements

Options

Interest Rate Swaps, Cross-Currency Swaps and Credit Default

Filters