Exam 14: Global Financial Management

Bank and government loans used by exporters to finance working capital are called trade financing.

A currency swap combined with a(n)______ swap is called a pain vanilla currency swap.

If losses occur causing a market participant's balance to fall below the maintenance margin at the end of the trading day,a call option occurs that requires the bank to replenish the investor's trading account.

Large international firms deal in considerable volumes of goods and often must obtain a(n)_____ from a group of banks known as a syndicate..

A simple agreement wherein the exporter sends an invoice with the goods and the exporter pays upon the receipt is called a(n)_____.

Moody's and Standard and Poor's issue _____.

______ is an examination of optimistic,expected,and pessimistic scenarios to give a more complete picture of the risks and returns of investments abroad.

Bonds that are sold in any country outside the home country,but in the home country's currency,are called _____.

_____ risk refers to the ways in which long-term exchange rate movements affect firms.

A stock value measured with the coefficient obtained by regressing the stock's return on a currency's return over time is known as the _____.

The flexibility to unwind forex hedges when they are no longer needed is a convenient advantage.

_______ is the safest method available to an exporter,but that which exposes the importer to some risk related to delivery of goods.

The sensitivity of a stock to market risk affected by currency movements is known as the _____.

A basket of currencies consisting of dollars,euros,pounds,and yen created by the International Monetary Fund is known as the _____.

Scenario - The Gayla Corporation The Gayla Corporation is a multinational business that conducts operations in twelve foreign markets.This multi-million dollar organization is very familiar with currency exchanges and has considerable understanding when it comes to the risks associated with operating in the global market arena.The Gayla Corporation claims it would not be as successful without the expertise of the financial wizards that work for it.The company has not lost money so far and plans to stay that way. -The Gayla Corporation must fully understand and effectively handle all the ways in which long-term exchange rate movements affect the firm.Which of the following best identifies what this organization is facing in this situation?

Bonds that are sold in any country outside the home country,but in the home country's currency,are called junk bonds.

The price paid by the buyer to the seller for an option contract is called a _____.

_______ accounting statements are the income statements and balance sheets of multinational corporations and of all subsidiaries abroad due to home tax requirements.

The safest method available to an exporter,but that which exposes the importer to some risk related to delivery of goods,is called _____.

An Export-Import Bank is a(n)