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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-2 section-5

Each section contains 100 MCQs on International Finance and Treasury .
11
Federal funds are loans borrowed and lent on
Discuss
Answer & Solution
Answer: Option A
Solution:
Federal funds are loans borrowed and lent on single payment basis. Federal funds, often referred to as fed funds, are excess reserves that commercial banks and other financial institutions deposit at regional Federal Reserve banks; these funds can be lent, then, to other market participants with insufficient cash on hand to meet their lending and reserve needs.
12
Markets which reallocate liquid funds in relatively fixed amounts are classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Markets which reallocate liquid funds in relatively fixed amounts are classified as secondary markets. The secondary market is where investors buy and sell securities they already own. It is what most people typically think of as the "stock market," though stocks are also sold on the primary market when they are first issued.
13
Banks that deals with reciprocal agreements and accounts are considered as
Discuss
Answer & Solution
Answer: Option A
Solution:
Banks that deals with reciprocal agreements and accounts are considered as correspondent banks. Correspondent banks are financial institutions that act as an agent on behalf of other financial institutions, usually foreign banks.
14
Treasury bills have high liquidity because of
Discuss
Answer & Solution
Answer: Option A
Solution:
Treasury bills have high liquidity because of extensive secondary markets. A Treasury Bill (T-Bill) is a short-term U.S. government debt obligation backed by the Treasury Department with a maturity of one year or less.
15
Treasury bills are issued to raise significant amount of funds by
Discuss
Answer & Solution
Answer: Option A
Solution:
Treasury bills are issued to raise significant amount of funds by US treasury. A Treasury Bill (T-Bill) is a short-term U.S. government debt obligation backed by the Treasury Department with a maturity of one year or less.
16
Rates of certificate of deposits are mostly negotiated between
Discuss
Answer & Solution
Answer: Option A
Solution:
Rates of certificate of deposits are mostly negotiated between bank and COD buyer. A certificate of deposit (CD) is a product offered by banks and credit unions that offers an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period of time.
17
Repurchase price is $250, selling price is $220 and number of days till maturity are 3 then yield of repurchase agreement is 2500
Discuss
Answer & Solution
Answer: Option B
No explanation is given for this question. Let's Discuss on Board
18
Price which is paid by bidders and is accepted by all other bidders is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Price which is paid by bidders and is accepted by all other bidders is classified as lowest price. A bidder is someone who offers to pay a certain amount of money for something that is being sold.
19
International bankers
Discuss
Answer & Solution
Answer: Option C
Solution:
International bankers letter of credits. A letter of credit (LC), also known as a documentary credit or bankers commercial credit, or letter of undertaking (LoU), is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods.
20
In Eurodollar market, decrease in demand of Euro dollars results in
Discuss
Answer & Solution
Answer: Option C
Solution:
In Eurodollar market, decrease in demand of Euro dollars results in decrease in federal funds rate. The federal funds rate refers to the interest rate that banks charge other banks for lending them money from their reserve balances on an overnight basis.