The Domestic And International Financial Marketplace

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Question 1
Free
Multiple Choice

The difference between merchandise exports and imports is known as the ____ .

Choose correct answer/s
A

transaction exposure

B

difference in purchasing power

C

merchandise trade balance

D

import/export reserve

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Question 2
Free
Multiple Choice

A multinational firm ____ .

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A

has direct investments in manufacturing facilities in more than one country

B

exports finished goods for sale in another country

C

imports raw materials from another country

D

has a manufacturing representative in another country

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Question 3
Free
Multiple Choice

The interest rate at which banks in the Eurocurrency market lend to each other is known as the ____ .

Choose correct answer/s
A

Eurocurrency currency rate (ECR)

B

London interbank offer rate

C

exchange rate

D

interest rate parity

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Question 4
Free
Multiple Choice

If Japanese yen are deposited in a bank in Paris, the deposits would be called ____

Choose correct answer/s
A

Eurofrancs

B

European Currency Unit

C

Eurobond

D

Euroyen

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Question 5
Free
Multiple Choice

An exchange rate quoted as $1.47 per British pound is known as a ____ quote.

Choose correct answer/s
A

hedge

B

direct

C

futures

D

indirect

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Question 6
Multiple Choice

If the spot rate for Swiss francs is $0.6658/franc and the 180-day forward rate is $0.6637, the market is indicating that the Swiss franc is expected to

Choose correct answer/s
A
strengthen relative to the dollar
B
weaken relative to the ECU
C
lose value relative to the dollar over the next 6 months
D
gain value relative to the dollar over the next 6 months
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Question 7
Multiple Choice

Which of the following is not a correct statement about foreign currency futures?

Choose correct answer/s
A
futures contracts have a standardized maturity date
B
futures contracts are an exchange-traded agreement
C
futures contracts are not liquid
D
futures contracts are "marked to market" daily
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Question 8
Multiple Choice

The most important foreign currency futures market in the United States is the ____ .

Choose correct answer/s
A
Chicago Board of Trade
B
New York Mercantile Exchange
C
Commodity Exchange
D
Chicago Mercantile Exchange
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Question 9
Multiple Choice

The buyer of a foreign currency call option has the ____ a fixed amount of a foreign currency.

Choose correct answer/s
A
right to sell
B
right but not the obligation to buy
C
obligation to buy, only at expiration,
D
obligation to buy
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Question 10
Multiple Choice

Eurodollars are U.S. dollars that have been deposited in

Choose correct answer/s
A
foreign banks
B
foreign branches of U.S. banks
C
foreign subsidiaries
D
foreign banks and foreign branches of U.S. banks
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Question 11
Multiple Choice

If the exchange rate from U.S. dollars to Canadian dollars is $0.80/Canadian dollar, then the exchange rate from Canadian dollars to U.S. dollars is

Choose correct answer/s
A
0.80 Canadian $/US dollar
B
$1.25 Canadian $/US dollar
C
$1.20 Canadian $/US dollar
D
$8.00 Canadian $/US dollar
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Question 12
Multiple Choice

If the exchange rate from U.S. dollars to Swiss francs is $0.20/franc, then the exchange rate from francs to dollars is

Choose correct answer/s
A
0.20 francs/dollar
B
0.80 francs/dollar
C
5.0 francs/dollar
D
2.0 francs/dollar
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Question 13
Multiple Choice

If the spot rate (in U.S. dollars) for Japanese Yen is 0.00703 and the 180 day forward rate is 0.00717, then the Yen is trading at a(n) ____ .

Choose correct answer/s
A
expected gain
B
premium
C
reciprocal
D
discount
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Question 14
Multiple Choice

If the forward (direct quote) exchange rate is lower than the spot rate, then the currency is said to be trading at a ____ .

Choose correct answer/s
A
forward premium
B
forward gain
C
forward discount
D
forward loss
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Question 15
Multiple Choice

Financial middlemen include

Choose correct answer/s
A
securities brokers
B
securities dealers
C
investment bankers
D
all of the above
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Question 16
Multiple Choice

The following are listed security exchanges in the United Sates:

Choose correct answer/s
A
New York Stock Exchange
B
Pacific Exchange
C
Cincinnati Exchange
D
All the above are listed exchanges
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Question 17
Multiple Choice

The Standard and Poor's 500 Stock Price Index is a ____ index.

Choose correct answer/s
A
price weighted
B
market value weighted
C
price average
D
none of these answers is correct
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Question 18
Multiple Choice

Securities not listed on exchanges are said to be traded

Choose correct answer/s
A
on the AMEX
B
as composite transactions
C
over the counter
D
on the regional exchanges
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Question 19
Multiple Choice

Financial intermediaries include

Choose correct answer/s
A
securities brokers
B
commercial banks
C
securities dealers
D
all of the above
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Question 20
Multiple Choice

____ markets deal in long-term securities having maturities greater than one year.

Choose correct answer/s
A
Credit
B
Money
C
Commodity futures
D
Capital
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