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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-6

Each section contains 100 MCQs on International Finance and Treasury .
61
Fixed price at which stock is purchased from issuer by investment banks is called
Discuss
Answer & Solution
Answer: Option B
Solution:
Fixed price at which stock is purchased from issuer by investment banks is called net proceeds. Net proceeds are the amount the seller receives following the sale of an asset after all costs and expenses are deducted from the gross proceeds.
62
Difference between net proceeds and gross proceeds is called
Discuss
Answer & Solution
Answer: Option C
Solution:
Difference between net proceeds and gross proceeds is called under writer spread. An underwriting spread is the spread between the dollar amount that underwriters, such as investment banks, pay an issuing company for its securities and the dollar amount that underwriters receive from selling the securities in the public offering.
63
Intrinsic value of put option is
Discuss
Answer & Solution
Answer: Option B
Solution:
Intrinsic value of put option is exercise price - stock price. For an in-the-money put option, the intrinsic value equals the stock option's strike price minus the price of the underlying stock.
64
Indexes in which price of stock of companies listed in stock market index are added together and is divided by an adjusted value are classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Indexes in which price of stock of companies listed in stock market index are added together and is divided by an adjusted value are classified as Dow Indexes. Dow was known for his ability to ethically explain complicated financial news to the public.
65
Firm in which different voting rights are assigned for different classes of stock is classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Firm in which different voting rights are assigned for different classes of stock is classified as dual class firm. Dual-class ownership is a type of common stock offering in which companies issue shares that have differing rights.
66
Markets in which new securities are issued by corporations to raise funds are called
Discuss
Answer & Solution
Answer: Option A
Solution:
Markets in which new securities are issued by corporations to raise funds are called 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.
67
Price of underlying asset is added into intrinsic value of option to calculate
Discuss
Answer & Solution
Answer: Option B
Solution:
Price of underlying asset is added into intrinsic value of option to calculate exercise price of option. The strike price (or exercise price) of an option is the fixed price at which the owner of the option can buy (in the case of a call), or sell (in the case of a put), the underlying security or commodity.
68
Type of exchange members who only buy and sell for their personal account are classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Type of exchange members who only buy and sell for their personal account are classified as professional traders. A professional trader is a person who is paid to undertake a specialized set of tasks and to complete them for a fee.
69
Pre-specified price at which underlying asset is bought and sold is called as
Discuss
Answer & Solution
Answer: Option D
Solution:
Pre-specified price at which underlying asset is bought and sold is called as strike price or exercise price. the strike price (or exercise price) of an option is the fixed price at which the owner of the option can buy (in the case of a call), or sell (in the case of a put), the underlying security or commodity.
70
In interest rate swap transaction, party who pays fixed payments of interest is classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
In interest rate swap transaction, party who pays fixed payments of interest is classified as swap buyer. A swap is a derivative contract through which two parties exchange the cash flows or liabilities from two different financial instruments. Most swaps involve cash flows based on a notional principal amount such as a loan or bond, although the instrument can be almost anything.