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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-6

Each section contains 100 MCQs on International Finance and Treasury .
91
Intrinsic value of call option is considered as out of money if
Discuss
Answer & Solution
Answer: Option D
Solution:
Intrinsic value of call option is considered as out of money if stock price < exercise price. The intrinsic value of both call and put options is the difference between the underlying stock's price and the strike price. In the case of both call and put options, if the calculated value is negative, the intrinsic value is zero.
92
Residual claims, limited rights, limited liability and dividend payments on discrete basis are considered as
Discuss
Answer & Solution
Answer: Option C
Solution:
Residual claims, limited rights, limited liability and dividend payments on discrete basis are considered as characteristics of common stock. Common stock is a security that represents ownership in a corporation. Holders of common stock exercise control by electing a board of directors and voting on corporate policy.
93
Votes for each stock holder were multiplied to number of elected directors to calculate
Discuss
Answer & Solution
Answer: Option B
Solution:
Votes for each stock holder were multiplied to number of elected directors to calculate number of votes assigned.
94
Feature of stock which allows stock holders to buy shares at price below than market price is called
Discuss
Answer & Solution
Answer: Option C
Solution:
Feature of stock which allows stock holders to buy shares at price below than market price is called rights offering. A rights offering (rights issue) is a group of rights offered to existing shareholders to purchase additional stock shares, known as subscription warrants, in proportion to their existing holdings.
95
Type of contract which involves exchange of assets will be occurred in future at price settled daily is classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Type of contract which involves exchange of assets will be occurred in future at price settled daily is classified as future contracts. A futures contract is a legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future. Futures contracts are standardized for quality and quantity to facilitate trading on a futures exchange.
96
Capital gains and dividends are considered as components of
Discuss
Answer & Solution
Answer: Option A
Solution:
Capital gains and dividends are considered as components of return. Capital gains are profits that occur when an investment is sold at a higher price than the original purchase price. Dividends are assets that are paid out of the profits of a corporation to the stockholders.
97
Prices that are adjusted day to day to picture current conditions of futures markets are classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Prices that are adjusted day to day to picture current conditions of futures markets are classified as market to market prices. Mark to market (MTM) is a measure of the fair value of accounts that can change over time, such as assets and liabilities. Mark to market aims to provide a realistic appraisal of an institution's or company's current financial situation.
98
Swaps that are classified as long term contracts are
Discuss
Answer & Solution
Answer: Option A
Solution:
Swaps that are classified as long term contracts are currency swaps. A currency swap is an agreement in which two parties exchange the principal amount of a loan and the interest in one currency for the principal and interest in another currency. At the inception of the swap, the equivalent principal amounts are exchanged at the spot rate.
99
Capital gains are 14% and periodic payments to stock holder are 11% then return on stock investment for stock holder is
Discuss
Answer & Solution
Answer: Option B
No explanation is given for this question. Let's Discuss on Board
100
If price of an option is $475 and time value of money is $375 then intrinsic value of an option is
Discuss
Answer & Solution
Answer: Option B
Solution:
Untrinsic value of an option = Price of an option - Time value of money
= $475 - $375 = $100.