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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-4

Each section contains 100 MCQs on International Finance and Treasury .
41
Bonds that can be exchanged with other stock issued by same firm are classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Bonds that can be exchanged with other stock issued by same firm are classified as convertible bonds. A convertible bond is a fixed-income debt security that yields interest payments, but can be converted into a predetermined number of common stock or equity shares. The conversion from the bond to stock can be done at certain times during the bond's life and is usually at the discretion of the bondholder.
42
Private placed stock and privately placed bonds are considered as
Discuss
Answer & Solution
Answer: Option A
Solution:
Private placed stock and privately placed bonds are considered as most illiquid securities. Illiquid stocks are the ones which cannot be sold easily because they see limited trading.
43
Bond which is denominated in dollars and is issued in European financial markets is considered as
Discuss
Answer & Solution
Answer: Option B
Solution:
Bond which is denominated in dollars and is issued in European financial markets is considered as Eurobonds. A Eurobond is debt instrument that's denominated in a currency other than the home currency of the country or market in which it is issued. Eurobonds are frequently grouped together by the currency in which they are denominated, such as eurodollar or Euro-yen bonds.
44
Yields of municipal bonds is
Discuss
Answer & Solution
Answer: Option A
Solution:
Yields of municipal bonds is after tax rate of return. Municipal bonds are good for people who want to hold on to capital while creating a tax-free income source.
45
Rate of return on non-callable bonds is $680 and value of issuer option is $450 then return on callable bond is
Discuss
Answer & Solution
Answer: Option D
Solution:
Return on callable bond = Rate of return on non-callable bonds + Value of issuer option
= $680 + $450 = $1,130.
46
Conversion values is $7000 and conversion rate received on stock conversion is 370 then current market price of stock is
Discuss
Answer & Solution
Answer: Option B
Solution:
Current market price of stock = Conversion values ÷ Conversion rate received on stock conversion
= $7000 ÷ 370 = $18.92.
47
If bonds are used as an investment vehicle by investors of institutions then bond must be
Discuss
Answer & Solution
Answer: Option C
Solution:
If bonds are used as an investment vehicle by investors of institutions then bond must be rated. A bond, also known as a fixed-income security, is a debt instrument created for the purpose of raising capital. They are essentially loan agreements between the bond issuer and an investor, in which the bond issuer is obligated to pay a specified amount of money at specified future dates.
48
STRIPS are used effectively to receive
Discuss
Answer & Solution
Answer: Option A
Solution:
STRIPS are used effectively to receive one set of payment. STRIPS (Separate Trading of Registered Interest and Principal of Securities) are debt securities that are created through the process of coupon stripping. They are essentially traditional Treasury bonds, except that the bond's principal (its corpus) has been separated--stripped--from its interest (its coupon).
49
Value of option issued to call debt is $670 and return rate on callable bond is $540 then return rate on non-callable bond is
Discuss
Answer & Solution
Answer: Option C
Solution:
Bon-callable bond = Value of option issued to call debt - Return rate on callable bond
= $670 - $540 = $130.
50
Denominations in which Eurobonds are issued are
Discuss
Answer & Solution
Answer: Option B
Solution:
Denominations in which Eurobonds are issued are $5000 and $10000. Most Eurobonds are investment-grade. Denominations are stipulated as lots or pieces, which is the amount of currency of the issue of 1000, 5000, or 50,000 lots or pieces.