International Finance Management- Quiz I

54 Questions | Total Attempts: 492

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Finance Quizzes & Trivia

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Questions and Answers
  • 1. 
    What foreign currency alternative is classified as derivative?
    • A. 

      Forward contract

    • B. 

      Future contract

    • C. 

      Both of above

    • D. 

      None of above

  • 2. 
    What foreign currency alternative is classified as contingent claim securities?
    • A. 

      Forward contract

    • B. 

      Future contract

    • C. 

      Both of above

    • D. 

      None of above

  • 3. 
    What foreign currency alternative is considered more flexible?
    • A. 

      Forward contract

    • B. 

      Future contract

    • C. 

      Eurodollar interest rate futures contracts

    • D. 

      None of above

  • 4. 
    Which of the following is a standard feature of future contract?
    • A. 

      Contract size

    • B. 

      Fixed interest rate

    • C. 

      Fixed currency exchange rate

    • D. 

      Bid-ask spread plus bank charges

  • 5. 
    Which of the following is a standard feature of futures contract?
    • A. 

      Maturity date

    • B. 

      Tailor-made delivery date

    • C. 

      Bid-as spread plus indirect bank charges

    • D. 

      Trade by bank dealers

  • 6. 
    What is the initial margin generally required for a futures contract?
    • A. 

      2%

    • B. 

      3%

    • C. 

      5%

    • D. 

      There is no initial margin required

  • 7. 
    What is the initial margin generally required for a forward contract?
    • A. 

      2%

    • B. 

      4%

    • C. 

      1%

    • D. 

      There is no initial margin required

  • 8. 
    How forward contract asset is priced?
    • A. 

      Forward contract states a price for the future transaction.

    • B. 

      Forward contract is settled-up, or market-to-market, daily at the settlement price at the close of daily trading on the exchange.

    • C. 

      Forward contract is based on bid-ask spread.

    • D. 

      Forward contract is based on one year currency exchange forecast.

  • 9. 
    In a futures contract, a seller could be consider?
    • A. 

      In a short position

    • B. 

      In a long position

    • C. 

      In a neutral position

    • D. 

      In a reverse position

  • 10. 
    In a futures contract, a buyer could be consider?
    • A. 

      In a long position

    • B. 

      In a short position

    • C. 

      In a neutral position

    • D. 

      In a reverse position

  • 11. 
    A buyer of a future contract in which the settlement price is higher than the previous day's settlement price as a...
    • A. 

      Positive settlement for the day

    • B. 

      Negative settlement for the day

    • C. 

      Neutral settlement for the day

    • D. 

      Undefinied settlement for the day

  • 12. 
    A buyer of a future contract in which the settlement price is lower than the previous day's settlement price as a...
    • A. 

      Positive settlement for the day

    • B. 

      Negative settlement for the day

    • C. 

      Neutral settlement for the day

    • D. 

      Undefinied settlement for the day

  • 13. 
    What is generally a percentage for maintance margin?
    • A. 

      75%

    • B. 

      80%

    • C. 

      50%

    • D. 

      25%

  • 14. 
    All above are forward contract characteristics, except:
    • A. 

      Tailor-made to the needs of the participant

    • B. 

      Participant buys or sells the contractual amount of the asset at maturity at the forward contractual price

    • C. 

      Delivery of the underlying asset is commonly made

    • D. 

      Trading costs are bid-ask spread plus broker's commission

  • 15. 
    All above are forward contract characteristics, except:
    • A. 

      Traded competitively on an organized exchange

    • B. 

      Participant buys or sells the contractual amount of the asset at maturity at the forward contractual price

    • C. 

      Delivery of the underlying asset is commonly made

    • D. 

      Trading costs are bid-ask spread plus indirect bank charges via compensating balance requirements

  • 16. 
    All above are forward contract characteristics, except:
    • A. 

      Daily settlement, or marking-to-market, by the futures clearinghouse through the participant's margin account

    • B. 

      Contract size is tailor-made to the needs of the participant

    • C. 

      Delivery of the underlying asset is commonly made

    • D. 

      Trading costs are bid-ask spread plus indirect bank charges via compensating balance requirements

  • 17. 
    All above are forward contract characteristics, except:
    • A. 

      Delivery of the underlying asset is seldom made. Usually, a reversing trade is transacted to exit the market

    • B. 

      Contract size is tailor-made to the needs of the participant

    • C. 

      Participant buys or sells the contractual amount of the asset at maturity at the forward contractual price

    • D. 

      Trading costs are bid-ask spread plus indirect bank charges via compensating balance requirements

  • 18. 
    All above are forward contract characteristics, except:
    • A. 

      Standardized delivery dates

    • B. 

      Contract size is tailor-made to the needs of the participant

    • C. 

      Participant buys or sells the contractual amount of the asset at maturity at the forward contractual price

    • D. 

      Trading costs are bid-ask spread plus indirect bank charges via compensating balance requirements

  • 19. 
    ​All above are futures contract characteristics, except:
    • A. 

      Traded by bank dealers via a network of telephones and computerized dealing systems

    • B. 

      Contract size is standardized amount of the underlying asset

    • C. 

      Standardized delivery dates

    • D. 

      Trading cost are bid-ask spread plus broker's commission

  • 20. 
    ​All above are futures contract characteristics, except:
    • A. 

      Contract size is tailor-made to the needs of the participant

    • B. 

      Traded competitively on a organized exchange

    • C. 

      Daily settlement, or marking-to-market, by the futures clearinghouse through the participant's margin account

    • D. 

      Trading cost are bid-ask spread plus broker's commission

  • 21. 
    ​All above are futures contract characteristics, except:
    • A. 

      Participant buys or sells the contractual amount of the asset at maturity at the forward contractual price

    • B. 

      Contract size is standardized amount of the underlying asset

    • C. 

      Daily settlement, or marking-to-market, by the futures clearinghouse through the participant's margin account

    • D. 

      Delivery of the underlying asset is seldom made. Usually, a reversing trade is transacted to exit the market

  • 22. 
    ​All above are futures contract characteristics, except:
    • A. 

      Tailor-made delivery date that meets the need of the investor

    • B. 

      Traded competitively on a organized exchange

    • C. 

      Contract size is standardized amount of the underlying asset

    • D. 

      Trading cost are bid-ask spread plus broker's commission

  • 23. 
    ​All above are futures contract characteristics, except:
    • A. 

      Delivery of the underlying asset is commonly made

    • B. 

      Contract size is standardized amount of the underlying asset

    • C. 

      Daily settlement, or marking-to-market, by the futures clearinghouse through the participant's margin account

    • D. 

      Standardized delivery dates

  • 24. 
    ​All above are futures contract characteristics, except:
    • A. 

      Trading costs are bid-ask spread plus indirect bank charges via compensating balance requirements

    • B. 

      Traded competitively on a organized exchange

    • C. 

      Contract size is standardized amount of the underlying asset

    • D. 

      Standardized delivery dates

  • 25. 
    What are the two types of market participants needed for a futures market to operate?
    • A. 

      Speculators and hedgers

    • B. 

      Speculators and contractors

    • C. 

      Hedgers and contractors

    • D. 

      Speculators and investors