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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-6

Each section contains 100 MCQs on International Finance and Treasury .
81
When earnings are reinvested instead of payments of dividends then capital gains
Discuss
Answer & Solution
Answer: Option B
Solution:
When earnings are reinvested instead of payments of dividends then capital gains must decreases.
82
Consider buying call option, if price of stock rises then buyer of call option has
Discuss
Answer & Solution
Answer: Option C
Solution:
Consider buying call option, if price of stock rises then buyer of call option has high potential of profit. Call options are financial contracts that give the option buyer the right, but not the obligation, to buy a stock, bond, commodity or other asset or instrument at a specified price within a specific time period. The stock, bond, or commodity is called the underlying asset.
83
Intrinsic value of call option is considered as in money if
Discuss
Answer & Solution
Answer: Option A
Solution:
Intrinsic value of call option is considered as in money if stock price > exercise price. The intrinsic value of both call and put options is the difference between the underlying stock's price and the strike price.
84
Call option considering interest rates and have multiple exercise dates is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Call option considering interest rates and have multiple exercise dates is classified as cap. A cap is a package of interest rate options whereby, at each of a series of future fixing dates, if an agreed reference rate such as LIBOR is higher than the strike rate, the option buyer receives the difference between them, calculated on an agreed notional principal amount for the period until the next fixing date.
85
Type of trade members who take position for short period of time or sometimes for only few minutes are classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Type of trade members who take position for short period of time or sometimes for only few minutes are classified as scalpers. A scalper, in the context of market supply-demand theory, also refers to a person who buys large quantities of in-demand items, such as new electronics or event tickets, at regular price, hoping that the items sell out. The scalper then resells the items at a higher price.
86
Black Scholes model consider factors which affects an option price and factors are
Discuss
Answer & Solution
Answer: Option D
Solution:
Black Scholes model consider factors which affects an option price and factors are spot price of asset, exercise price and exercise date of option and price volatility. Black-Scholes is a pricing model used to determine the fair price or theoretical value for a call or a put option based on six variables such as volatility, type of option, underlying stock price, time, strike price, and risk-free rate.
87
Total count of all contracts and options such as call, put and futures outstanding at start of working day is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Total count of all contracts and options such as call, put and futures outstanding at start of working day is classified as open interest. Open interest is the total number of outstanding derivative contracts, such as options or futures that have not been settled for an asset. The total open interest does not count, and total every buy and sell contract.
88
Periodic payments of dividends are subtracted from return to stockholders to calculate
Discuss
Answer & Solution
Answer: Option C
Solution:
Periodic payments of dividends are subtracted from return to stockholders to calculate gain on capital. Capital gain is a rise in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price.
89
Voting ballot that is sent to stock holders by corporation is classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Voting ballot that is sent to stock holders by corporation is classified as proxy. A proxy is an agent legally authorized to act on behalf of another party or a format that allows an investor to vote without being physically present at the meeting.
90
Deposit that are required in futures contract and is considered as guarantee that conditions of contracts would be fulfilled is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Deposit that are required in futures contract and is considered as guarantee that conditions of contracts would be fulfilled is classified as initial margin. Initial margin is the percent of a purchase price that must be paid with cash when using a margin account.