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International Finance and Treasury MCQ Questions and Solutions with Explanations | Management

International Finance and Treasury MCQ Questions and answers with easy and logical explanations. Management provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. International FinanceMCQ is important for exams like MAT, CAT, CA, CS, CMA, CPA, CFA, UPSC, Banking and other Management department exam. Page-10 section-5

Each section contains 100 MCQs on International Finance and Treasury .
91
Interest rate which is not reinvested but is earned is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Interest rate which is not reinvested but is earned is classified as simple interest. An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited or borrowed.
92
According to loanable funds theory, fall in interest rates results in to
Discuss
Answer & Solution
Answer: Option C
Solution:
According to loanable funds theory, fall in interest rates results in to higher demand of funds. According to this approach, the interest rate is determined by the demand for and supply of loanable funds. The term loanable funds includes all forms of credit, such as loans, bonds, or savings deposits.
93
If equilibrium interest rate decreases and curve of funding supplied shifts to right and downwards then impact on spending is
Discuss
Answer & Solution
Answer: Option B
Solution:
If equilibrium interest rate decreases and curve of funding supplied shifts to right and downwards then impact on spending is decrease in near term. The equilibrium interest rate is the rate at which the quantity of money demanded is equal to the quantity of money supplied. The Federal Reserve can alter the equilibrium interest rate by adjusting the supply of money. The demand for money and supply of money can be graphed to determine the equilibrium interest rate.
94
Value which converts series of equal payments in to value received at end time of investment is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Value which converts series of equal payments in to value received at end time of investment is classified as future value of annuity. The future value of an annuity is the total value of annuity payments at a specific point in the future. This can help you figure out how much your future payments will be worth, assuming that the rate of return and the periodic payment does not change.
95
Theory which states that interest equilibrium is result of demand and supply in trading market is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Theory which states that interest equilibrium is result of demand and supply in trading market is classified as loanable funds theory. According to this approach, the interest rate is determined by the demand for and supply of loanable funds. The term loanable funds includes all forms of credit, such as loans, bonds, or savings deposits.
96
Decrease in present value at decreasing rate only when
Discuss
Answer & Solution
Answer: Option D
Solution:
Decrease in present value at decreasing rate only when interest rate increases. This is because a higher interest rate means you would have to set less aside today to earn a specified amount in the future.
97
Accounts receivable and inventory are examples of
Discuss
Answer & Solution
Answer: Option A
Solution:
Accounts receivable and inventory are examples of short term working capital. Short term working capital is defined as current assets/current liabilities of a company.
98
Expected rate that originates at any point in future for a specific security is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Expected rate that originates at any point in future for a specific security is classified as forward rate. A forward rate is an interest rate applicable to a financial transaction that will take place in the future.
99
Earned interest rate which is reinvested in other investment is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Earned interest rate which is reinvested in other investment is classified as compound interest. Compound interest (or compounding interest) is interest calculated on the initial principal, which also includes all of the accumulated interest of previous periods of a deposit or loan.
100
If risk of financial security decreases and supply curve shifts to right and downwards then impact on equilibrium of interest rate must
Discuss
Answer & Solution
Answer: Option C
Solution:
If risk of financial security decreases and supply curve shifts to right and downwards then impact on equilibrium of interest rate must decreases. The equilibrium interest rate is the rate at which the quantity of money demanded is equal to the quantity of money supplied. The Federal Reserve can alter the equilibrium interest rate by adjusting the supply of money. The demand for money and supply of money can be graphed to determine the equilibrium interest rate.