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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-7

Each section contains 100 MCQs on International Finance and Treasury .
61
Reasons for smaller exposure of foreign exchange than US money center are
Discuss
Answer & Solution
Answer: Option D
Solution:
Reasons for smaller exposure of foreign exchange than US money center are regulations, prudent individuals and smaller size of assets.
62
In equilibrium position, spread between foreign and domestic rate of interest must be equal to spread of
Discuss
Answer & Solution
Answer: Option B
Solution:
In equilibrium position, spread between foreign and domestic rate of interest must be equal to spread of forward and spot exchange rates. A spot rate is a contracted price for a transaction that is taking place immediately (it is the price on the spot). A forward rate, on the other hand, is the settlement price of a transaction that will not take place until a predetermined date in the future; it is a forward-looking price.
63
In United States, JPMorgan Chase is considered as
Discuss
Answer & Solution
Answer: Option A
Solution:
In United States, JPMorgan Chase is considered as largest foreign exchange trading. The term ‘Forex’ stands for Foreign Exchange. Forex trading in simple terms is the trading in currencies from different countries against each other.
64
Theory which considers change in exchange rate with fluctuations in inflation rates is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Theory which considers change in exchange rate with fluctuations in inflation rates is classified as purchasing power parity. Purchasing power parity (PPP) is an economic theory that compares different countries' currencies through a "basket of goods" approach.
65
Inflation rate in United States is added into real rate of interest to calculate
Discuss
Answer & Solution
Answer: Option C
Solution:
Inflation rate in United States is added into real rate of interest to calculate interest rate in United States. Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over a period of time.
66
Position which came in to existence because of holding assets more than liabilities is considered as
Discuss
Answer & Solution
Answer: Option A
Solution:
Position which came in to existence because of holding assets more than liabilities is considered as net long in currency. Net long refers to a condition in which an investor has a portfolio consisting of more long positions than short positions in a given asset, market, portfolio or trading strategy.
67
Commercial mortgages, farm mortgages and home mortgages are categories of
Discuss
Answer & Solution
Answer: Option D
Solution:
Commercial mortgages, farm mortgages and home mortgages are categories of primary mortgagees. A mortgagee is an entity that lends money to a borrower for the purpose of purchasing real estate. In a mortgage lending deal the lender serves as the mortgagee and the borrower is known as the mortgagor.
68
Primary mortgages involves
Discuss
Answer & Solution
Answer: Option B
Solution:
Primary mortgages involves single investor. The primary mortgage market is where loans are first created. It's where borrowers seek to hook up with mortgage originators to conclude a mortgage loan for the purchase of a home or other type of real estate.
69
Ownership of mortgaged property will be transferred to financial institution if
Discuss
Answer & Solution
Answer: Option A
Solution:
Ownership of mortgaged property will be transferred to financial institution if borrower defaults. The mortgaged property can be transferred/inherited only with the written consent of the lender. This means that if a person passes away while the home loan was still running on the property that has to be bequeathed, the beneficiary (spouse, or children of the deceased) will have to pay the outstanding loan.
70
Loan which is made available for businesses or individuals to buy land, home or other property is classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Loan which is made available for businesses or individuals to buy land, home or other property is classified as mortgages. A mortgage is a loan from a bank or a financial institution that helps the borrower purchase a house. A mortgage is secured by the home itself, so if the borrower defaults on the loan, the bank can sell the home and recoup its losses.