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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-7

Each section contains 100 MCQs on International Finance and Treasury .
21
Number of shares outstanding are 10000 and price of stock is $50 then current market price is
Discuss
Answer & Solution
Answer: Option C
Solution:
Current market price = Number of shares outstanding × Price of stock
= 10000 × $50 = $500,000.
22
Consider buying put option, if price is lower at expiration date of option then the
Discuss
Answer & Solution
Answer: Option D
Solution:
Consider buying put option, if price is lower at expiration date of option then the profit will be higher. A person would buy a put option if they expected the price of the underlying futures contract to move lower. A put option gives the buyer the right to sell the underlying futures contract at an agreed-upon price called the strike price any time before the contract expires.
23
If stock price of call option is $300 and exercise price of call option is $260 then intrinsic value of option is
Discuss
Answer & Solution
Answer: Option C
Solution:
Intrinsic value of option = Stock price of call option - Exercise price of call option
= $300 - $260 = $40.
24
Type of preferred stock whose paid dividends are more than promised dividends is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Type of preferred stock whose paid dividends are more than promised dividends is classified as participating preferred stock. Participating preferred stock is a type of preferred stock that gives the holder the right to receive dividends equal to the customarily specified rate that preferred dividends are paid to preferred shareholders, as well as an additional dividend based on some predetermined condition.
25
According to futures contract, long position states
Discuss
Answer & Solution
Answer: Option B
Solution:
According to futures contract, long position states purchase of future contract. 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.
26
Type of option that gives right to buyer to sell underlying option at specific exercise price is considered as
Discuss
Answer & Solution
Answer: Option B
Solution:
Type of option that gives right to buyer to sell underlying option at specific exercise price is considered as put option. A put option is a contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security at a pre-determined price within a specified time frame.
27
Type of voting in which owner having half voting shares can elect board of directors is called
Discuss
Answer & Solution
Answer: Option C
Solution:
Type of voting in which owner having half voting shares can elect board of directors is called straight voting. Statutory voting, also known as straight voting, means that shareholders have one vote per share and that votes must be evenly divided among issues. The other shareholder voting procedure is cumulative voting, which allows votes to be weighted based on the shareholder's preference.
28
Speed with which prices of stocks are adjusted to unexpected news related to interest rates is called
Discuss
Answer & Solution
Answer: Option D
Solution:
Speed with which prices of stocks are adjusted to unexpected news related to interest rates is called market efficiency. Market efficiency refers to the degree to which market prices reflect all available, relevant information. If markets are efficient, then all information is already incorporated into prices, and so there is no way to "beat" the market because there are no undervalued or overvalued securities available.
29
Form of market efficiency in which stock current prices reflects volume information and historic prices of company is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Form of market efficiency in which stock current prices reflects volume information and historic prices of company is classified as weak form of market efficiency. Weak form efficiency states that past prices, historical values and trends can't predict future prices. Weak form efficiency is an element of efficient market hypothesis. Weak form efficiency states that stock prices reflect all current information.
30
Difference between price of underlying asset and exercise price of option is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Difference between price of underlying asset and exercise price of option is classified as intrinsic value of option. The intrinsic value of an option represents the current value of the option, or in other words how much in the money it is. When an option is in the money, this means that it has a positive payoff for the buyer.