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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-9 section-3

Each section contains 100 MCQs on International Finance and Treasury .
81
Factors considered by rating agencies on issuing bonds are
Discuss
Answer & Solution
Answer: Option D
Solution:
Factors considered by rating agencies on issuing bonds are position in industry, overall financial strength and issuer.
82
Banks, mutual funds and insurance companies are considered as
Discuss
Answer & Solution
Answer: Option A
Solution:
Banks, mutual funds and insurance companies are considered as major suppliers.
83
Conversion values is $9500 and conversion rate received on stock conversion is 460 then current market price of stock is
Discuss
Answer & Solution
Answer: Option D
Solution:
Current market price of stock = Conversion values ÷ Conversion rate received on stock conversion
= $9500 ÷ 460 = $20.65.
84
Considering coupon rate, Brady bonds pays
Discuss
Answer & Solution
Answer: Option B
Solution:
Considering coupon rate, Brady bonds pays lower than promised. Brady bonds are bonds that are issued by the governments of developing countries. Brady bonds are some of the most liquid emerging market securities.
85
Bonds issued for longer term and must be sold in country whom currency is not used in denomination of bonds are classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Bonds issued for longer term and must be sold in country whom currency is not used in denomination of bonds are classified as Eurobonds. A eurobond is denominated in a currency other than the home currency of the country or market in which it is issued. These bonds are frequently grouped together by the currency in which they are denominated, such as eurodollar or euroyen bonds.
86
Foreign bonds, sovereign bonds and Eurobonds are classified as types of
Discuss
Answer & Solution
Answer: Option C
Solution:
Foreign bonds, sovereign bonds and Eurobonds are classified as types of international markets. An international market is defined geographically as a market outside the international borders of a company's country of citizenship. A company, to the extent that it is a legally distinct entity from its owners like a corporation, is usually a citizen of the country where it is organized.
87
Face value of bond is $550 and call price of bond is $475 then value of call premium is
Discuss
Answer & Solution
Answer: Option C
Solution:
Value of call premium = Face value of bond - Call price of bond
= $550 - $475 = $75.
88
Treasury security in which final principal payment is separated from periodic interest payment is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Treasury security in which final principal payment is separated from periodic interest payment is classified as STRIP. They are securities that represent the separate interest and principal components of Treasury securities.
89
For a taxable security, tax exempted interest rate on municipal bonds us used to determine
Discuss
Answer & Solution
Answer: Option A
Solution:
For a taxable security, tax exempted interest rate on municipal bonds us used to determine tax equivalent rate of return.
90
Financial institutions having loans swapped for bonds can sell all bonds in
Discuss
Answer & Solution
Answer: Option D
Solution:
Financial institutions having loans swapped for bonds can sell all bonds in secondary markets. A secondary market is a marketplace where already issued securities both shares and debt can be bought and sold by the investors. So, it is a market where investors buy securities from other investors, and not from the issuing company.