Question 1

Which of the following statements is true?

Accepted Answer

A) The investment ratio is the ratio of a country's total investments to its GDP. 
B) The investment ratio is the ratio of a country's real investments to its total foreign currency obligations. 
C) The investment ratio is the ratio of a country's total investments to its imports. 
D) None of the listed options are correct. 
A) The investment ratio is the ratio of a country's total investments to its GDP. 
B) The investment ratio is the ratio of a country's real investments to its total foreign currency obligations. 
C) The investment ratio is the ratio of a country's total investments to its imports. 
D) None of the listed options are correct. D

Question 2

HIPC stands for:

Accepted Answer

A) heavily import-focused poor countries. 
B) heavily indebted poorest countries. 
C) highly indebted productive countries. 
D) heavily import-focused productive countries. 
A) heavily import-focused poor countries. 
B) heavily indebted poorest countries. 
C) highly indebted productive countries. 
D) heavily import-focused productive countries. B

Question 3

Concessionality refers to the amount a bank gives up in:
A)future value terms as a result of a multi-year restructuring agreement (MYRA)..
B)nominal value terms as a result of a MYRA.
C)present value terms as a result of a MYRA.
D)compounded value terms as a result of a MYRA.

Accepted Answer

C

Question 4

Which of the following expressions truly represents the calculation of a country's import ratio?

Accepted Answer

A) Total imports divided by total exports. 
B) Total imports divided by total foreign currency exchange reserves. 
C) Total imports divided by total debt. 
D) Total imports divided by GDP. 
A) Total imports divided by total exports. 
B) Total imports divided by total foreign currency exchange reserves. 
C) Total imports divided by total debt. 
D) Total imports divided by GDP.

Question 5

Which of the following makes international loan rescheduling more likely than bond rescheduling?

Accepted Answer

A) International loan contracts are not allowed to contain cross-default provisions. 
B) Typically there are more FIs in an international lending syndicate compared to the number of potential bondholders. 
C) Since World War II more international debt has been in the form of bonds. 
D) An international loan syndicate typically comprises the same FIs which allows greater cohesiveness for negotiations. 
A) International loan contracts are not allowed to contain cross-default provisions. 
B) Typically there are more FIs in an international lending syndicate compared to the number of potential bondholders. 
C) Since World War II more international debt has been in the form of bonds. 
D) An international loan syndicate typically comprises the same FIs which allows greater cohesiveness for negotiations.

Question 6

Changing the contractual terms of a loan, such as its maturity and interest payments is referred to as:

Accepted Answer

A) debt repudiation. 
B) debt rescheduling. 
C) refinancing. 
D) reinvesting. 
A) debt repudiation. 
B) debt rescheduling. 
C) refinancing. 
D) reinvesting.

Question 7

Which of the following are normally traded at very deep discounts from 100 per cent?

Accepted Answer

A) Restructured loans. 
B) Brady bonds. 
C) Sovereign bonds. 
D) Nonperforming loans. 
A) Restructured loans. 
B) Brady bonds. 
C) Sovereign bonds. 
D) Nonperforming loans.

Question 8

In accordance with the Heritage Foundation, which of the following definitions best represents the term 'economic freedom'?

Accepted Answer

A) The absence of government coercion or constraint on the production, distribution or consumption of goods and services at all costs to protect and maintain liberty itself. 
B) The absence of government coercion or constraint on the production, distribution or consumption of goods and services beyond the extent necessary for citizens to protect and maintain liberty itself. 
C) The absence of government coercion or constraint on the consumption of goods and services at all costs to protect and maintain liberty itself. 
D) The absence of government coercion or constraint on the production and distribution or consumption of goods and services at all costs to protect and maintain liberty itself. 
A) The absence of government coercion or constraint on the production, distribution or consumption of goods and services at all costs to protect and maintain liberty itself. 
B) The absence of government coercion or constraint on the production, distribution or consumption of goods and services beyond the extent necessary for citizens to protect and maintain liberty itself. 
C) The absence of government coercion or constraint on the consumption of goods and services at all costs to protect and maintain liberty itself. 
D) The absence of government coercion or constraint on the production and distribution or consumption of goods and services at all costs to protect and maintain liberty itself.

Question 9

What does MYRA refer to?

Accepted Answer

A) multi-year repayment agreement 
B) multi-year refinancing agreement 
C) multi-year renegotiating agreement 
D) multi-year restructuring agreement 
A) multi-year repayment agreement 
B) multi-year refinancing agreement 
C) multi-year renegotiating agreement 
D) multi-year restructuring agreement

Question 10

Which of the following is a benefit to the lender in a loan rescheduling?

Accepted Answer

A) The FI may become locked into a particular loan portfolio structure. 
B) Rescheduling may close the market for future loans. 
C) Rescheduling may create interruptions in the flow of international trade since letters of credit may be more difficult to acquire. 
D) The FI may receive additional fees, collateral, and option features on the loan. 
A) The FI may become locked into a particular loan portfolio structure. 
B) Rescheduling may close the market for future loans. 
C) Rescheduling may create interruptions in the flow of international trade since letters of credit may be more difficult to acquire. 
D) The FI may receive additional fees, collateral, and option features on the loan.

Question 11

LDC debt can be bought and sold in secondary markets.

Accepted Answer

A) True 
 B)False

Question 12

Debt repudiation is the:

Accepted Answer

A) outright cancellation of all current debt obligations by a borrower. 
B) outright cancellation of all future debt obligations by a borrower. 
C) outright cancellation of all current and future debt obligations by a borrower. 
D) changing of the contractual terms of all current debt obligations by a borrower. 
A) outright cancellation of all current debt obligations by a borrower. 
B) outright cancellation of all future debt obligations by a borrower. 
C) outright cancellation of all current and future debt obligations by a borrower. 
D) changing of the contractual terms of all current debt obligations by a borrower.

Question 13

Lenders considering lending money to a firm in another country only need to consider the firm's credit standing.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following are risk factors that might influence the variability of a country's export revenues?

Accepted Answer

A) quality risk 
B) quantity risk 
C) country risk 
D) basis risk 
A) quality risk 
B) quantity risk 
C) country risk 
D) basis risk

Question 15

Which of the following are benefits that accrue to the lender resulting from rescheduling?

Accepted Answer

A) Increase of consumption. 
B) Tax benefits. 
C) Lower present value payments. 
D) Loans become similar to long-term bonds 
A) Increase of consumption. 
B) Tax benefits. 
C) Lower present value payments. 
D) Loans become similar to long-term bonds

Question 16

Debt moratorium refers to a:

Accepted Answer

A) clause that allows the lender to call in the debt during a particular period. 
B) delay in repaying interest and/or principal on debt. 
C) clause that allows the lender to charge higher interest if debt is not repaid in time. 
D) clause that allows the borrower to repay debt early. 
A) clause that allows the lender to call in the debt during a particular period. 
B) delay in repaying interest and/or principal on debt. 
C) clause that allows the lender to charge higher interest if debt is not repaid in time. 
D) clause that allows the borrower to repay debt early.

Question 17

Which of the following statements is true?

Accepted Answer

A) The import ratio is the ratio of a country's imports to its total foreign currency obligations. 
B) The import ratio is the ratio of a country's imports to its total debt. 
C) The import ratio is the ratio of a country's imports to its total GDP. 
D) The import ratio is the ratio of a country's imports to its total foreign currency reserves. 
A) The import ratio is the ratio of a country's imports to its total foreign currency obligations. 
B) The import ratio is the ratio of a country's imports to its total debt. 
C) The import ratio is the ratio of a country's imports to its total GDP. 
D) The import ratio is the ratio of a country's imports to its total foreign currency reserves.

Question 18

All of the following are relevant determinants of sovereign risk exposure: the rate of domestic money supply growth; the variance of export revenue, and the size of the population.

Accepted Answer

A) True 
 B)False

Question 19

Lenders may find it costly to reschedule non-accruing sovereign country debt because:

Accepted Answer

A) it is politically embarrassing. 
B) bankruptcy costs are high. 
C) they might be subject to greater regulatory attention. 
D) it is detrimental to maintaining good customer relations. 
A) it is politically embarrassing. 
B) bankruptcy costs are high. 
C) they might be subject to greater regulatory attention. 
D) it is detrimental to maintaining good customer relations.

Question 20

An LDC's export revenues may be highly variable due to quantity risk and price risk.

Accepted Answer

A) True 
 B)False

Which of the following statements is true?

HIPC stands for:

Concessionality refers to the amount a bank gives up in: A)future value terms as a result of a multi-year restructuring agreement (MYRA).. B)nominal value terms as a result of a MYRA. C)present value terms as a result of a MYRA. D)compounded value terms as a result of a MYRA.

Which of the following expressions truly represents the calculation of a country's import ratio?

Which of the following makes international loan rescheduling more likely than bond rescheduling?

Changing the contractual terms of a loan, such as its maturity and interest payments is referred to as:

Which of the following are normally traded at very deep discounts from 100 per cent?

In accordance with the Heritage Foundation, which of the following definitions best represents the term 'economic freedom'?

What does MYRA refer to?

Which of the following is a benefit to the lender in a loan rescheduling?

LDC debt can be bought and sold in secondary markets.

Debt repudiation is the:

Lenders considering lending money to a firm in another country only need to consider the firm's credit standing.

Which of the following are risk factors that might influence the variability of a country's export revenues?

Which of the following are benefits that accrue to the lender resulting from rescheduling?

Debt moratorium refers to a:

Which of the following statements is true?

All of the following are relevant determinants of sovereign risk exposure: the rate of domestic money supply growth; the variance of export revenue, and the size of the population.

Lenders may find it costly to reschedule non-accruing sovereign country debt because:

An LDC's export revenues may be highly variable due to quantity risk and price risk.

Why Are Financial Institutions Special

The Financial Services Industry: Depository Institutions

The Financial Services Industry: Other Financial Institutions

Risk of Financial Institutions

Interest Rate Risk Measurement: The Repricing Model

Interest Rate Risk Measurement: The Duration Model

Managing Interest Rate Risk Using Off Balance Sheet Instruments

Credit Risk I: Individual Loan Risk

Market Risk

Credit Risk I: Individual Loan Risk

Credit Risk II: Loan Portfolio and Concentration Risk

Foreign Exchange Risk

Liquidity Risk

Liability and Liquidity Management

Off-Balance-Sheet Activities

Technology and Other Operational Risk

Capital Management and Adequacy

Filters

Exam 12: Sovereign Risk

Which of the following statements is true?

HIPC stands for:

Concessionality refers to the amount a bank gives up in: A)future value terms as a result of a multi-year restructuring agreement (MYRA).. B)nominal value terms as a result of a MYRA. C)present value terms as a result of a MYRA. D)compounded value terms as a result of a MYRA.

Which of the following expressions truly represents the calculation of a country's import ratio?

Which of the following makes international loan rescheduling more likely than bond rescheduling?

Changing the contractual terms of a loan, such as its maturity and interest payments is referred to as:

Which of the following are normally traded at very deep discounts from 100 per cent?

In accordance with the Heritage Foundation, which of the following definitions best represents the term 'economic freedom'?

What does MYRA refer to?

Which of the following is a benefit to the lender in a loan rescheduling?

LDC debt can be bought and sold in secondary markets.

Debt repudiation is the:

Lenders considering lending money to a firm in another country only need to consider the firm's credit standing.

Which of the following are risk factors that might influence the variability of a country's export revenues?

Which of the following are benefits that accrue to the lender resulting from rescheduling?

Debt moratorium refers to a:

Which of the following statements is true?

All of the following are relevant determinants of sovereign risk exposure: the rate of domestic money supply growth; the variance of export revenue, and the size of the population.

Lenders may find it costly to reschedule non-accruing sovereign country debt because:

An LDC's export revenues may be highly variable due to quantity risk and price risk.

Why Are Financial Institutions Special

The Financial Services Industry: Depository Institutions

The Financial Services Industry: Other Financial Institutions

Risk of Financial Institutions

Interest Rate Risk Measurement: The Repricing Model

Interest Rate Risk Measurement: The Duration Model

Managing Interest Rate Risk Using Off Balance Sheet Instruments

Credit Risk I: Individual Loan Risk

Market Risk

Credit Risk I: Individual Loan Risk

Credit Risk II: Loan Portfolio and Concentration Risk

Foreign Exchange Risk

Liquidity Risk

Liability and Liquidity Management

Off-Balance-Sheet Activities

Technology and Other Operational Risk

Capital Management and Adequacy

Filters