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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-3 section-1

Each section contains 100 MCQs on International Finance and Treasury .
21
For contingency exposure of foreign exchange, the best derivative that can be used to hedge is
Discuss
Answer & Solution
Answer: Option C
Solution:
For contingency exposure of foreign exchange, the best derivative that can be used to hedge is Options. Options are financial instruments that are derivatives based on the value of underlying securities such as stocks. An options contract offers the buyer the opportunity to buy or sell depending on the type of contract they hold the underlying asset.
22
Japan yen denominated Bond issued in Japan domestic Market
Discuss
Answer & Solution
Answer: Option B
Solution:
A samurai bond is a yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.
23
An option at-the-money when
Discuss
Answer & Solution
Answer: Option D
Solution:
An option is at the money (ATM) if the strike price is the same as the current spot price of the underlying security. An at-the-money option has no intrinsic value, only time value. For example, with an "at the money" call stock option, the current share price and strike price are the same.
24
The intrinsic value of a Call option is
Discuss
Answer & Solution
Answer: Option B
Solution:
The intrinsic value of a Call option is Underlying price - Strike 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.
25
Which of the countries did not become a member of the Economic and Monetary Union as on Jan 1 1999.
Discuss
Answer & Solution
Answer: Option A
Solution:
Britain did not become a member of the Economic and Monetary Union as on Jan 1 1999.
26
The acronym CIRCUS stands for
Discuss
Answer & Solution
Answer: Option D
Solution:
The acronym CIRCUS stands for Combined Interest Rate and Currency Swap. A Circus Swap is a common Forex transaction that's a combination of an interest rate swap and a currency swap in which a fixed-rate loan in one currency is swapped for a floating-rate loan in another currency.
27
Under the interest rate option, the buyer
Discuss
Answer & Solution
Answer: Option C
Solution:
Under the interest rate option, the buyer avoids unfavourable movement in interest rates and gains from favorable movement in interest rates. An interest rate option is a financial derivative that allows the holder to benefit from changes in interest rates. Investors can speculate on the direction of interest rates with interest rate options. It is similar to an equity option and can be either a put or a call.
28
An interest rate cap is a series of
Discuss
Answer & Solution
Answer: Option A
Solution:
An interest rate cap is a series of Call options. Call options are financial contracts that give the option buyer the right, but not the obligation, to buy a stock, bond, commodity or other asset or instrument at a specified price within a specific time period.
29
FRAs can’t be used for
Discuss
Answer & Solution
Answer: Option D
Solution:
FRAs can’t be used for Hedging, Arbitraging and Speculating. FRAs are used to help companies manage their interest rate exposures. FRAs can be used by borrowers who have a desire or need to alter their interest rate or cash flow profile to suite their particular needs.
30
Euro is the official currency of
Discuss
Answer & Solution
Answer: Option B
Solution:
Euro is the official currency of all the states of European Union. The eurozone consists of 19 members who are EU members and use the euro. They are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.