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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-8 section-5

Each section contains 100 MCQs on International Finance and Treasury .
71
Repurchase price is subtracted from selling price divided by selling price and multiplied to 360 by number of days Up to maturity to calculate
Discuss
Answer & Solution
Answer: Option A
Solution:
Repurchase price is subtracted from selling price divided by selling price and multiplied to 360 by number of days Up to maturity to calculate repurchase agreement yields. In this agreement, the counterparty gets the use of the securities for the term of the transaction, and will earn interest stated as the difference between the initial sale price and the buyback price. The interest rate is fixed, and interest will be paid at maturity by the dealer.
72
Equilibrium interest rate decreases and economic conditions increases then supply curve must shift to
Discuss
Answer & Solution
Answer: Option D
Solution:
Equilibrium interest rate decreases and economic conditions increases then supply curve must shift to down and to right. The equilibrium interest rate is the rate at which the quantity of money demanded is equal to the quantity of money supplied.
73
Special provisions that can have adverse or beneficial effects and are reflected in interest rates does not include
Discuss
Answer & Solution
Answer: Option D
Solution:
Special provisions that can have adverse or beneficial effects and are reflected in interest rates does not include inflation premium. An inflation premium is the part of prevailing interest rates that results from lenders compensating for expected inflation by pushing nominal interest rates to higher levels.
74
Loan-able funds theory is used to determine
Discuss
Answer & Solution
Answer: Option B
Solution:
Loan-able funds theory is used to determine future value. The loanable funds doctrine is a theory of the market interest rate. According to this approach, the interest rate is determined by the demand for and supply of loanable funds. The term loanable funds includes all forms of credit, such as loans, bonds, or savings deposits.
75
Loans for education and medical is classified as loans for
Discuss
Answer & Solution
Answer: Option D
Solution:
Loans for education and medical is classified as loans for non-durable goods. Nondurable goods are products that are consumed or are only useable for a short period of time because they wear out or become useless. An example of nondurable goods are fresh vegetables.
76
Interest rate equilibrium is increased and supply curve of funds shifts to left or upward is result of
Discuss
Answer & Solution
Answer: Option D
Solution:
Interest rate equilibrium is increased and supply curve of funds shifts to left or upward is result of decrease in total wealth. The equilibrium interest rate is the rate at which the quantity of money demanded is equal to the quantity of money supplied. The Federal Reserve can alter the equilibrium interest rate by adjusting the supply of money. The demand for money and supply of money can be graphed to determine the equilibrium interest rate.
77
According to demand for funds curve, demand curve shifts to right if there is increase in
Discuss
Answer & Solution
Answer: Option B
Solution:
According to demand for funds curve, demand curve shifts to right if there is increase in equilibrium interest rate. The equilibrium interest rate is the rate at which the quantity of money demanded is equal to the quantity of money supplied. The Federal Reserve can alter the equilibrium interest rate by adjusting the supply of money. The demand for money and supply of money can be graphed to determine the equilibrium interest rate.
78
For other non-price conditions, decrease in equilibrium interest rate leads to
Discuss
Answer & Solution
Answer: Option A
Solution:
For other non-price conditions, decrease in equilibrium interest rate leads to increase restrictiveness. The equilibrium interest rate is the rate at which the quantity of money demanded is equal to the quantity of money supplied. The Federal Reserve can alter the equilibrium interest rate by adjusting the supply of money. The demand for money and supply of money can be graphed to determine the equilibrium interest rate.
79
Factors that can affect nominal interest rates in financial transactions includes
Discuss
Answer & Solution
Answer: Option D
Solution:
Factors that can affect nominal interest rates in financial transactions includes special provisions, liquidity and default risk and inflation and real interest rate.
80
Interest rate equilibrium is decreased and supply curve of funds shifts to right is result of
Discuss
Answer & Solution
Answer: Option A
Solution:
Interest rate equilibrium is decreased and supply curve of funds shifts to right is result of increase in total wealth. The equilibrium interest rate is the rate at which the quantity of money demanded is equal to the quantity of money supplied. The Federal Reserve can alter the equilibrium interest rate by adjusting the supply of money. The demand for money and supply of money can be graphed to determine the equilibrium interest rate.