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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-6

Each section contains 100 MCQs on International Finance and Treasury .
71
Intrinsic value of option is $280 and price of option is $350 then time value of option is
Discuss
Answer & Solution
Answer: Option D
Solution:
Time value of option = Price of option - Intrinsic value of option
= $350 - $280 = $70.
72
Margin which must be maintained as soon as futures contract takes place is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Margin which must be maintained as soon as futures contract takes place is classified as maintenance margin. A maintenance margin is the minimum amount of equity that must be maintained in a margin account.
73
Types of corporate stock that are traded in exchange markets are
Discuss
Answer & Solution
Answer: Option D
Solution:
Types of corporate stock that are traded in exchange markets are common stock and preferred stock.
74
Process in which group of investment banks distribute securities is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Process in which group of investment banks distribute securities is classified as syndicate. This is a way of distributing a newly issued security, such as stocks or bonds, to investors.
75
Type of preferred stock whose dividend payments are never paid to stock holders and are not considered in in arrears is classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Type of preferred stock whose dividend payments are never paid to stock holders and are not considered in in arrears is classified as non-cumulative preferred stock. Noncumulative preferred stock is a type of preferred stock that allows the issuing company to skip dividends and which then cancels the company's obligation to eventually pay those dividends.
76
Sum of capital gains and dividend payments which are paid to stock holders on periodic basis is equal to
Discuss
Answer & Solution
Answer: Option C
Solution:
Sum of capital gains and dividend payments which are paid to stock holders on periodic basis is equal to return to stock holder. The return on shareholders’ equity ratio shows how much money is returned to the owners as a percentage of the money they have invested or retained in the company.
77
Type of financial security whose payoff is linked to any other security is called
Discuss
Answer & Solution
Answer: Option C
Solution:
Type of financial security whose payoff is linked to any other security is called derivate security. A derivative is a financial security with a value that is reliant upon or derived from, an underlying asset or group of assets a benchmark.
78
Form of market efficiency which considers speed with which information at public level is impounded in prices of stock is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Form of market efficiency which considers speed with which information at public level is impounded in prices of stock is classified as semi-strong form market efficiency. The semi-strong form efficiency is a type of efficient market hypothesis (EMH), which holds that security prices adjust quickly to newly available information, thus eliminating the use of fundamental or technical analysis to achieving a higher return.
79
Stock prices of five companies are $50, $60, $55, $58, $63 then initial value of price weighted index is
Discuss
Answer & Solution
Answer: Option B
Solution:
Initial value of price weighted index = ($50 + $60 + $55 + $58 + $63)
= $57.20.
80
In syndicate, leading bank which negotiates transaction to issuing bank on behalf of syndicate is called
Discuss
Answer & Solution
Answer: Option A
Solution:
In syndicate, leading bank which negotiates transaction to issuing bank on behalf of syndicate is called originating house. Originating house is an investment brokerage firm or several investment bankers joined together to manage the underwriting and sale of a new issue of stock to the general public.