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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-7 section-2

Each section contains 100 MCQs on International Finance and Treasury .
61
Type of market in which securities with less than one year maturity are traded is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Type of market in which securities with less than one year maturity are traded is classified as money market. 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.
62
Type of structured market through which funds flow with help of financial instruments such as bonds and stocks is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Type of structured market through which funds flow with help of financial instruments such as bonds and stocks is classified as financial markets. A financial market is a broad term describing any marketplace where trading of securities including equities, bonds, currencies, and derivatives occur.
63
Type of risk in which payments are interrupted by intervention of foreign governments is considered as
Discuss
Answer & Solution
Answer: Option D
Solution:
Type of risk in which payments are interrupted by intervention of foreign governments is considered as country risk. Country risk is the risk that a foreign government will default on its bonds or other financial commitments. Country risk also refers to the broader notion of the degree to which political and economic unrest affect the securities of issuers doing business in a particular country.
64
Risk of financial institutions which states mismatching assets maturities and liabilities maturities is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Risk of financial institutions which states mismatching assets maturities and liabilities maturities is classified as maturity intermediation. Maturity intermediation is an investment term that describes a bank's long-term lending on funds borrowed for a short-term investment.
65
Legal document required by Securities Exchange Commission stating associated risks and detailed description of issues is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Legal document required by Securities Exchange Commission stating associated risks and detailed description of issues is classified as prospectus. A prospectus is a formal document that is required by and filed with the Securities and Exchange Commission (SEC) that provides details about an investment offering for sale to the public. A prospectus is filed for stock, bond, and mutual fund offerings.
66
Process of selling and buying of stocks and bonds is classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Process of selling and buying of stocks and bonds is classified as e-trade. Electronic trading company designed to provide investors with a service to actively manage their portfolios and execute trades at their discretion. Trades are executed with a computer or smartphone device and are made quickly.
67
Risk stating assets are sold at low prices because of sudden surge in withdrawals of liabilities is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Risk stating assets are sold at low prices because of sudden surge in withdrawals of liabilities is classified as liquidity risk. Liquidity is the ability of a firm, company, or even an individual to pay its debts without suffering catastrophic losses.
68
In capital markets, major suppliers of trading instruments are
Discuss
Answer & Solution
Answer: Option A
Solution:
In capital markets, major suppliers of trading instruments are government and corporations. Capital markets refer to the places where savings and investments are moved between suppliers of capital and those who are in need of capital. Capital markets consist of the primary market, where new securities are issued and sold, and the secondary market, where already-issued securities are traded between investors.
69
Transfer of financial instruments from suppliers of funds to users of funds without any intermediary in between is classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Transfer of financial instruments from suppliers of funds to users of funds without any intermediary in between is classified as direct transfer. A direct transfer is a transfer of assets from one type of tax-deferred retirement plan or account to another. Direct transfers are not considered official distributions and are therefore not taxable as income or subject to any penalties for early distribution.
70
Type of financial markets in which corporations issues new funds to raise funds is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Type of financial markets in which corporations issues new funds to raise funds is classified as primary markets. The primary market is where securities are created. It's in this market that firms sell (float) new stocks and bonds to the public for the first time. An initial public offering, or IPO, is an example of a primary market.