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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-5

Each section contains 100 MCQs on International Finance and Treasury .
41
The transactions that came into being when borrowing and lending of excess money occurs are considered as
Discuss
Answer & Solution
Answer: Option C
Solution:
The transactions that came into being when borrowing and lending of excess money occurs are considered as federal funds transaction. Federal funds, often referred to as fed funds, are excess reserves that commercial banks and other financial institutions deposit at regional Federal Reserve banks; these funds can be lent, then, to other market participants with insufficient cash on hand to meet their lending and reserve needs.
42
Operating tool used by Federal Reserve to influence supply of bank to control demand and supply of repurchase agreements is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Operating tool used by Federal Reserve to influence supply of bank to control demand and supply of repurchase agreements is classified as discount window. The discount window is a central bank lending facility meant to help commercial banks manage short-term liquidity needs.
43
Type of Eurodollars deposits denominated in banks outside United States is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Type of Eurodollars deposits denominated in banks outside United States is classified as euro dollar certificate of deposit. A Eurodollar certificate of deposit (Eurodollar CD) is a negotiable dollar-denominated time deposit issued by a U.S. bank located outside the United States or by a foreign bank located abroad.
44
Repurchase price is $250, selling price is $150 and number of days till maturity are 5 then yield of repurchase agreement is 2500
Discuss
Answer & Solution
Answer: Option C
No explanation is given for this question. Let's Discuss on Board
45
Drafts which are backed up by banks and are payable to seller of products or services are classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Drafts which are backed up by banks and are payable to seller of products or services are classified as banker acceptance. A banker's acceptance requires the bank to pay the holder a set amount of money on a set date.
46
Deposit issued by bank, usually negotiable and have specific maturity date and interest rate is classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Deposit issued by bank, usually negotiable and have specific maturity date and interest rate is classified as negotiable certificate. A negotiable certificate of deposit, or CD, is a marketable receipt for funds deposited in a bank for a specified period at a specified rate of interest.
47
Repurchase agreements having maturity of longer term have denominations of
Discuss
Answer & Solution
Answer: Option B
Solution:
Repurchase agreements having maturity of longer term have denominations of $10 million. A repurchase agreement (repo) is a form of short-term borrowing for dealers in government securities. In the case of a repo, a dealer sells government securities to investors, usually on an overnight basis, and buys them back the following day at a slightly higher price.
48
Type of market in which short term instruments are traded and purchased by economic units is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Type of market in which short term instruments are traded and purchased by economic units is classified as money markets. The money market is the trade in short-term debt investments. At the wholesale level, it involves large-volume trades between institutions and traders. At the retail level, it includes money market mutual funds bought by individual investors and money market accounts opened by bank customers.
49
In treasury bills auction, treasury bills are sold at
Discuss
Answer & Solution
Answer: Option B
Solution:
In treasury bills auction, treasury bills are sold at discount basis. Treasury bills are sold at a discount to the par value. It is a static value determined at the time of issuance and, unlike market value, it doesn't fluctuate on a regular basis., which is its actual value.
50
Non-competitive bidding of treasury bills also allows participation of
Discuss
Answer & Solution
Answer: Option C
Solution:
Non-competitive bidding of treasury bills also allows participation of small investors. Non-competitive bidding means the bidder would be able to participate in the auctions of dated government securities without having to quote the yield or price in the bid.