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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-8

Each section contains 100 MCQs on International Finance and Treasury .
81
In Capital Market Line every investment is
Discuss
Answer & Solution
Answer: Option A
Solution:
In Capital Market Line every investment is infinitely divisible. The capital market line (CML) represents portfolios that optimally combine risk and return. Capital asset pricing model (CAPM), depicts the trade-off between risk and return for efficient portfolios.
82
Dollar-cost averaging allows investors to stay away from trouble of buying high and selling
Discuss
Answer & Solution
Answer: Option C
Solution:
Dollar-cost averaging allows investors to stay away from trouble of buying high and selling low.
83
Who concern with relations between security returns
Discuss
Answer & Solution
Answer: Option A
Solution:
Markowitz diversification concern with relations between security returns. Markowitz diversification is a strategy that seeks to combine in a portfolio assets with returns that are less than perfectly positively correlated, in an effort to lower portfolio risk (variance) without sacrificing return. Related: Naive diversification.
84
Superior portfolio is not basically a collection of individually
Discuss
Answer & Solution
Answer: Option B
Solution:
Superior portfolio is not basically a collection of individually good investments. A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds.
85
Investments would grade uppermost with regard to protection is
Discuss
Answer & Solution
Answer: Option A
Solution:
Investments would grade uppermost with regard to protection is government bonds. A government bond is a debt security issued by a government to support government spending. Government bonds can pay periodic interest payments called coupon payments.
86
Choice of correlation coefficient is between
Discuss
Answer & Solution
Answer: Option C
Solution:
Choice of correlation coefficient is between Minus 1 to +1. The value of the correlation coefficient lies between minus one and plus one, –1 ≤ r ≤ 1. If, in any exercise, the value of r is outside this range it indicates error in calculation.
87
Markowitz model presumed generally investors are
Discuss
Answer & Solution
Answer: Option A
Solution:
Markowitz model presumed generally investors are risk averse. The term risk-averse refers to investors who, when faced with two investments with a similar expected return, prefer the lower-risk option.
88
The statements relate to international financial environment. Denote the statements being correct or incorrect.
Statement I Foreign exchange risk denotes the variance of domestic currency value of assets, liabilities, or operating income attributable to anticipated changes in exchanges rates.
Statement II Foreign exchange exposures denote the sensitivity of the real value of assets, liabilities and operating income to unanticipated changes in exchange rates expressed in its functional currency.
Discuss
Answer & Solution
Answer: Option D
No explanation is given for this question. Let's Discuss on Board
89
Match the following.
List-I List-II
a. Increase in Volatlity 1. Rise in option premium
b. Increase in interest rate 2. Fall in value of put option
c. Increase in price of underlying asset 3. Rise in price of call option
Discuss
Answer & Solution
Answer: Option B
No explanation is given for this question. Let's Discuss on Board
90
The counterpart risk is
Discuss
Answer & Solution
Answer: Option C
No explanation is given for this question. Let's Discuss on Board