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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-5 section-3

Each section contains 100 MCQs on International Finance and Treasury .
41
Interest rate on floating rate Eurobonds is paid
Discuss
Answer & Solution
Answer: Option B
Solution:
Interest rate on floating rate Eurobonds is paid semi-annually. Eurobonds are interest-bearing securities issued in the Eurobond market.
42
Financial instruments such as treasury bonds and notes have
Discuss
Answer & Solution
Answer: Option B
Solution:
Financial instruments such as treasury bonds and notes have wider price fluctuations. A financial instrument is a monetary contract between parties. We can create, trade, or modify them. We can also settle them. A financial instrument may be evidence of ownership of part of something, as in stocks and shares. Bonds, which are contractual rights to receive cash, are financial instruments.
43
If revenue bonds becomes default, bondholders must
Discuss
Answer & Solution
Answer: Option B
Solution:
If revenue bonds becomes default, bondholders must be paid. Revenue bonds are municipal bonds that finance income-producing projects and are secured by a specified revenue source. Typically, revenue bonds can be issued by any government agency or fund that is managed in the manner of a business, such as entities having both operating revenues and expenses.
44
Rules and regulations placed on bond holders and bond issuers are classified in
Discuss
Answer & Solution
Answer: Option A
Solution:
Rules and regulations placed on bond holders and bond issuers are classified in bond covenants. Bond covenants are part of the legal documentation that makes up a bond, whether it is issued by a company or the government. They are usually intended to protect investors by providing some assurance on what the bond issuer will and won't do over the life of the bond.
45
Coupon payment accrued between last payment and settlement date is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Coupon payment accrued between last payment and settlement date is classified as accrued interest. An accrual bond is a bond that does not pay periodic interest payments.
46
For municipal bonds, initial market is through
Discuss
Answer & Solution
Answer: Option B
Solution:
For municipal bonds, initial market is through public offering. The public offering price (POP) is the price at which new issues of stock are offered to the public by an underwriter. Because the goal of an initial public offering (IPO) is to raise money, underwriters must determine a public offering price that will be attractive to investors.
47
Municipal bonds are securities issued by local and state
Discuss
Answer & Solution
Answer: Option D
Solution:
Municipal bonds are securities issued by local and state in schools, governments and city and country.
48
Debentures that are considered as junior bonds as compared to debentures and mortgage bonds are classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Debentures that are considered as junior bonds as compared to debentures and mortgage bonds are classified as subordinated debentures. Subordinated debenture is a bond classified lower than more senior debt in the event of a default. This means that the holders of more senior securities are paid first, before any residual funds are made available to the holder of the subordinated debenture.
49
Junk bonds which are rated lower than triple B are also classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Junk bonds which are rated lower than triple B are also classified as high yield bonds. A high-yield bond is a high paying bond with a lower credit rating than investment-grade corporate bonds, Treasury bonds and municipal bonds. Because of the higher risk of default, these bonds pay a higher yield than investment grade bonds.
50
Call premium of bond is subtracted from call price of bond to calculate
Discuss
Answer & Solution
Answer: Option A
Solution:
Call premium of bond is subtracted from call price of bond to calculate face value of bond. The face value or face amount of a bond payable is the amount printed on the bond.