Question 1

Eurodollars refers to dollar deposits when the depository bank is located in

Accepted Answer

A) Europe 
B) Europe, and the Caribbean 
C) Europe, the Caribbean, or Asia 
D) United States 
A) Europe 
B) Europe, and the Caribbean 
C) Europe, the Caribbean, or Asia 
D) United States C

Question 2

The London Interbank Offered Rate (LIBOR)is all of the following except:

Accepted Answer

A) the rate charged by banks on loans to other Eurobanks 
B) the rate paid by banks on deposits from other Eurobanks 
C) reference rate in London for Eurocurrency deposits 
D) reference rate in London for Eurocurrency loans 
A) the rate charged by banks on loans to other Eurobanks 
B) the rate paid by banks on deposits from other Eurobanks 
C) reference rate in London for Eurocurrency deposits 
D) reference rate in London for Eurocurrency loans B

Question 3

ABC Bank (seller)has made a "three against six" Forward Rate Agreement (FRA),with XYZ Bank (buyer)with the following characteristics:
Notional Amount = $1,000,000
Settlement Rate = 4%
Agreement Rate = 5%
Actual number of days in the three-month agreement period = 91
a)When is this agreement settled?
b)Who pays whom?
c)What is the dollar amount of the settlement?

Accepted Answer

a)The agreement is settled in 3 months.
b)XYZ Bank pays ABC Bank.
c)The settlement amount is 1,000,000*((0.04   0.05)*91/360)/(1 + 0.05*91/360)=   $2,496.23.

Question 4

The major feature that distinguishes international from domestic banks is

Accepted Answer

A) the type of deposits they accept 
B) the currency of denomination of the investments they make 
C) a and b 
D) none of these 
A) the type of deposits they accept 
B) the currency of denomination of the investments they make 
C) a and b 
D) none of these

Question 5

Short-term unsecured promissory notes issued by a corporation or a bank and placed directly with the investment public through a dealer are called

Accepted Answer

A) eurocredits 
B) eurocommercial papers 
C) euro facilities 
D) euronotes 
A) eurocredits 
B) eurocommercial papers 
C) euro facilities 
D) euronotes

Question 6

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 7

The payment amount under this FRA is:

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 8

Which of the following statements is not true about Eurocredits?

Accepted Answer

A) Eurocredits are short-to medium term loans of Eurocurrency extended by Eurobanks 
B) Euorcredits are denominated in currencies other than the home currency of the Eurobank 
C) Eurocredits are often syndicated loans 
D) Eurocredits are less risky than other loans 
A) Eurocredits are short-to medium term loans of Eurocurrency extended by Eurobanks 
B) Euorcredits are denominated in currencies other than the home currency of the Eurobank 
C) Eurocredits are often syndicated loans 
D) Eurocredits are less risky than other loans

Question 9

The payment amount under this FRA is:

Accepted Answer

A) $2,510 
B) $2,526 
C) $25,555 
D) $100,000 
A) $2,510 
B) $2,526 
C) $25,555 
D) $100,000

Question 10

In reference to capital requirements,value-at-risk analysis

Accepted Answer

A) refers to traditional bank loans and deposits 
B) refers to a "risk-focused" approach to determining adequate bank capital 
C) provides a level of confidence measure of the probability of the maximum loss that can occur during a period of time 
D) b and c 
A) refers to traditional bank loans and deposits 
B) refers to a "risk-focused" approach to determining adequate bank capital 
C) provides a level of confidence measure of the probability of the maximum loss that can occur during a period of time 
D) b and c

Question 11

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 12

How are Canadian dollar interest rates in the Euromarkets and in the Canadian domestic financial markets related?

Accepted Answer

The deposit rates in the domestic market

Question 13

Short-term notes underwritten by a group of international investment or commercial banks called a facility are

Accepted Answer

A) eurocredits 
B) eurocommercial papers 
C) euro facilities 
D) euronotes 
A) eurocredits 
B) eurocommercial papers 
C) euro facilities 
D) euronotes

Question 14

ABC Bank (seller)has made a "three against six" Forward Rate Agreement (FRA),with XYZ Bank (buyer)with a notional amount of $1,000,000.The settlement and agreement rates are 6% and 5% respectively.There are 91 actual days in the three-month agreement period.
a)When is this agreement settled?
b)Who pays whom?
c)What is the dollar amount of the settlement?

Accepted Answer

a)The agreement is settled in

Question 15

Since SR < AR,then

Accepted Answer

A) ABC Bank will pay XYZ Bank a cash settlement at the beginning of the 91-day FRA period 
B) XYZ Bank will pay ABC Bank a cash settlement at the beginning of the 91-day FRA period 
C) ABC Bank will pay XYZ Bank a cash settlement at the end of the 91-day FRA period 
D) XYZ Bank will pay ABC Bank a cash settlement at the end of the 91-day FRA period 
A) ABC Bank will pay XYZ Bank a cash settlement at the beginning of the 91-day FRA period 
B) XYZ Bank will pay ABC Bank a cash settlement at the beginning of the 91-day FRA period 
C) ABC Bank will pay XYZ Bank a cash settlement at the end of the 91-day FRA period 
D) XYZ Bank will pay ABC Bank a cash settlement at the end of the 91-day FRA period

Question 16

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 17

A forward rate agreement (FRA)is a contract between two banks

Accepted Answer

A) that allows the Eurobank to hedge the interest rate risk in mismatched deposits and credits 
B) in which the buyer agrees to pay the seller the increased interest cost on a notional amount if interest rates fall below an agreed rate, and the seller agrees to pay the buyer the increased interest cost if interest rates increase above the agreed rate 
C) that is structured to capture the maturity mismatch in standard-length Eurodeposits and credits 
D) All of these 
A) that allows the Eurobank to hedge the interest rate risk in mismatched deposits and credits 
B) in which the buyer agrees to pay the seller the increased interest cost on a notional amount if interest rates fall below an agreed rate, and the seller agrees to pay the buyer the increased interest cost if interest rates increase above the agreed rate 
C) that is structured to capture the maturity mismatch in standard-length Eurodeposits and credits 
D) All of these

Question 18

Explain Eurocommerical papers.

Accepted Answer

Eurocommercial papers are unse

Question 19

Japanese yen deposited in U.S.bank are called

Accepted Answer

A) Americoyen 
B) Dollaroyen 
C) Euroyen 
D) Worldyen 
A) Americoyen 
B) Dollaroyen 
C) Euroyen 
D) Worldyen

Question 20

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

Eurodollars refers to dollar deposits when the depository bank is located in

The London Interbank Offered Rate (LIBOR)is all of the following except:

The major feature that distinguishes international from domestic banks is

Short-term unsecured promissory notes issued by a corporation or a bank and placed directly with the investment public through a dealer are 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:

Which of the following statements is not true about Eurocredits?

The payment amount under this FRA is:

In reference to capital requirements,value-at-risk analysis

Which of the following statements is true?

How are Canadian dollar interest rates in the Euromarkets and in the Canadian domestic financial markets related?

Short-term notes underwritten by a group of international investment or commercial banks called a facility are

Since SR < AR,then

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 forward rate agreement (FRA)is a contract between two banks

Explain Eurocommerical papers.

Japanese yen deposited in U.S.bank are called

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

Globalization and the Multinational Firm

International Monetary System

Balance of Payments

Corporate Governance Around the World

The Market for Foreign Exchange

Futures and Options on Foreign Exchange

Management of Transaction Exposure

Management of Economic Exposure

Management of Translation Exposure

International Banking and Money Market

International Bond Market

International Equity Markets

Interest Rate and Currency Swaps

International Portfolio Investment

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

International Trade Finance

International Tax Environment and Transfer Pricing

Filters

Exam 6: International Parity Relationships and Forecasting Foreign Exchange Rates

Eurodollars refers to dollar deposits when the depository bank is located in

The London Interbank Offered Rate (LIBOR)is all of the following except:

The major feature that distinguishes international from domestic banks is

Short-term unsecured promissory notes issued by a corporation or a bank and placed directly with the investment public through a dealer are 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:

Which of the following statements is not true about Eurocredits?

The payment amount under this FRA is:

In reference to capital requirements,value-at-risk analysis

Which of the following statements is true?

How are Canadian dollar interest rates in the Euromarkets and in the Canadian domestic financial markets related?

Short-term notes underwritten by a group of international investment or commercial banks called a facility are

Since SR < AR,then

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 forward rate agreement (FRA)is a contract between two banks

Explain Eurocommerical papers.

Japanese yen deposited in U.S.bank are called

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

Globalization and the Multinational Firm

International Monetary System

Balance of Payments

Corporate Governance Around the World

The Market for Foreign Exchange

Futures and Options on Foreign Exchange

Management of Transaction Exposure

Management of Economic Exposure

Management of Translation Exposure

International Banking and Money Market

International Bond Market

International Equity Markets

Interest Rate and Currency Swaps

International Portfolio Investment

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

International Trade Finance

International Tax Environment and Transfer Pricing

Filters