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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-4 section-6

Each section contains 100 MCQs on International Finance and Treasury .
31
In interest rate swap transaction, party who pays floating payments of interest is considered as
Discuss
Answer & Solution
Answer: Option D
Solution:
In interest rate swap transaction, party who pays floating payments of interest is considered as swap seller. A swap is an agreement between two parties to exchange sequences of cash flows for a set period of time.
32
Type of contract which involves future exchange of assets at a specified price is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Type of contract which involves future exchange of assets at a specified price is classified as forward contract. A forward contract is a customized contract between two parties to buy or sell an asset at a specified price on a future date.
33
When price of underlying asset increases then good option is
Discuss
Answer & Solution
Answer: Option A
Solution:
When price of underlying asset increases then good option is buy call option. Buying a call option entitles the buyer of the option the right to purchase the underlying futures contract at the strike price any time before the contract expires.
34
Capital gain is subtracted from return to stockholders to calculate
Discuss
Answer & Solution
Answer: Option A
Solution:
Capital gain is subtracted from return to stockholders to calculate periodic dividend payments. Dividends are payments made by publicly-listed companies or funds as a reward to investors for putting their money into the venture. They can be paid as cash or in the form of stock.
35
Consider call option writing, probability that a buyer would have positive payoff increases with the
Discuss
Answer & Solution
Answer: Option B
Solution:
Considering call option writing, probability that a buyer would have positive payoff increases with the decrease in stock price. Writing a call option means that you are selling a call option. If you sell a call (also know as a "short call") then you are obliged to sell stock at the strike price.
36
Right of stockholders of firm that new shares must be offered to existing stockholders first rather than new stock holders is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Right of stockholders of firm that new shares must be offered to existing stockholders first rather than new stock holders is classified as pre-emptive rights. Preemptive rights are a clause in an option, security or merger agreement that gives the investor the right to maintain his or her percentage ownership of a company by buying a proportionate number of shares of any future issue of the security.
37
Price at which stock is sold to investors by investment banks is called
Discuss
Answer & Solution
Answer: Option A
Solution:
Price at which stock is sold to investors by investment banks is called Gross proceeds. Gross Proceeds means the aggregate purchase price of all Shares sold for the account of the Company through an Offering, without deduction for Selling Commissions, volume discounts, any marketing support and due diligence expense reimbursement or Organization and Offering Expenses.
38
Underwriter spread of stock is $17000 and net proceeds of stock are $24000 then gross proceeds are
Discuss
Answer & Solution
Answer: Option A
Solution:
Gross proceeds = Underwriter spread of stock + Net proceeds of stock
= $17000 + $24000 = $41,000.
39
If time value of an option is $200 and intrinsic value of an option is $250 then price of option is
Discuss
Answer & Solution
Answer: Option B
Solution:
Price of option = Time value of an option + Intrinsic value of an option
= $200 + $250 = $550.
40
Type of unit which guarantees that all buying and selling will be made by traders of exchange is called
Discuss
Answer & Solution
Answer: Option C
Solution:
Type of unit which guarantees that all buying and selling will be made by traders of exchange is called clearing house. A clearing house acts as an intermediary between a buyer and seller and seeks to ensure that the process from trade inception to settlement is smooth. Its main role is to make certain that the buyer and seller honor their contract obligations.