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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-1 section-4

Each section contains 100 MCQs on International Finance and Treasury .
1
Considering bonds characteristics, corporate and treasury bonds have many
Discuss
Answer & Solution
Answer: Option A
Solution:
Considering bonds characteristics, corporate and treasury bonds have many different characteristics. Unlike stocks, each bond contract has unique characteristics that define how repayment will occur. Every bond contract has at least five components: the borrower, price, date of maturity, value of maturity and coupon rate.
2
Value of conversion option to bond holder is $220 and rate of return on non-convertible bond is $350 then rate of return on convertible bond is
Discuss
Answer & Solution
Answer: Option B
Solution:
Rate of return on convertible bond = Rate of return on non-convertible bond - Value of conversion option to bond holder
= $350 - $220 = $130.
3
Several maturities dates are involved in issued bonds if company earnings are classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Several maturities dates are involved in issued bonds if company earnings are classified as volatile.
4
Municipal bonds public offering is often made through
Discuss
Answer & Solution
Answer: Option C
Solution:
Municipal bonds public offering is often made through commercial banking firm. Commercial banks make loans to people and small businesses and offer checking and savings accounts and certificates of deposit.
5
Value of option issued to call debt is $780 and return rate on callable bond is $370 then return rate on non-callable bond is
Discuss
Answer & Solution
Answer: Option D
Solution:
Non-callable bond = Value of option issued to call debt - Return rate on callable bond
= $780 - $370 = $410.
6
Besides equity related bonds, type of Eurobonds that are convertible are classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Besides equity related bonds, type of Eurobonds that are convertible are classified as bonds with equity warrants. Equity warrant bonds are debt securities that incorporate warrants, which give the holder the option to purchase equity in the issuer, its parent company, or another company during a predetermined period or on one particular date at a fixed contract price.
7
If price of municipal bonds suddenly changes because of an unexpected interest rate change then investment bank
Discuss
Answer & Solution
Answer: Option B
Solution:
If price of municipal bonds suddenly changes because of an unexpected interest rate change then investment bank faces a loss. Municipal bonds are loans investors make to local governments. They are issued by cities, states, counties, or other local governments. For that reason, the interest they pay on the bonds is tax-free.
8
Financial firms such as mutual fund and insurance companies are also called
Discuss
Answer & Solution
Answer: Option D
Solution:
Financial firms such as mutual fund and insurance companies are also called business financial. Business Finance means the funds and credit employed in the business. Finance is the foundation of a business.
9
Municipal bonds are more considerable to
Discuss
Answer & Solution
Answer: Option B
Solution:
Municipal bonds are more considerable too household investors. Municipal bonds are loans investors make to local governments. They are issued by cities, states, counties, or other local governments. For that reason, the interest they pay on the bonds is tax-free.
10
Bonds used in purpose of specific projects which are financed by collateral for issuing bonds are classified as
Discuss
Answer & Solution
Answer: Option D
Solution:
Bonds used in purpose of specific projects which are financed by collateral for issuing bonds are classified as mortgage bonds. A mortgage bond is a bond secured by a mortgage or pool of mortgages. These bonds are typically backed by real estate holdings and real property such as equipment. In a default situation, mortgage bondholders have a claim to the underlying property and could sell it off to compensate for the default.