英文版国际金融练习题Chapter-7

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INTERNATIONALFINANCE

AssignmentProblems(7)Name:Student#:

I.Choosethecorrectanswerforthefollowingquestions(onlyONEcorrectanswer)(4creditsforeachquestion,totalcredits3x21=63)

1.__________aredomesticcurrenciesofonecountryondepositinothercountries.

A.LIBORs

B.Eurobonds

C.Eurocurrencies

D.Euronotes

2.Eurocreditsare__________.

A.bankloanstoMNCsorothersdenominatedinacurrencyotherthanthatofacountrywherethebankislocated

B.typicallyvariablerateswhicharetiedtotheLIBOR

C.usuallyformaturitiesofsixmonthsorless

D.alloftheabovearetrue

3.AJapanesefirmhadchosentodepositmoneyinaGermanbankandhaveitdenominatedinJapaneseyen,thisisanexampleofa__________deposit.

A.Eurobond

B.Euronote

C.Euroyen

D.foreignyen

4.Ifabondisissuedbyadomesticborrower,denominatedbydomesticcurrency,marketedandregulatedbydomesticmonetaryauthorities,thisisa__________.

A.foreignbond

B.Eurobond

C.domesticbond

D.globalbond

5.AbondthattradesintheEurobondmarketaswellasinoneormorenationalbondmarketsisa__________.

A.Eurobond

B.globalbond

C.foreignbond

D.domesticbond

6.__________areissuedinadomesticmarketbyaforeignborrower,denominatedindomesticcurrency,marketedtodomesticresidents,andregulatedbydomesticauthorities.

A.foreignbonds

B.Eurobonds

C.domesticbonds

D.Yankeebonds

7.TheFederalNationalMortgageAssociation(FannieMae)issuedadollar-denominatedbondwitha7.25%annualcouponandamaturitydatein2030tonon-U.S.investorsinanexternalmarket.Thisbondistypicallya__________.

A.foreignbond

B.Eurobond

C.domesticbond

D.Yankeebond

8.Aeuro-denominatedloanistradedinEurocurrencymarket.Thisloaniscalled__________.

A.euroloan

B.Euroeuroloan

C.foreigneuroloan

D.noneoftheabove

9.WhichofthefollowingistrueforaEurocurrencymarket?

A.AEurocurrencymarketisnotsubjecttoanycountries’interestrateregulations.

B.AEurocurrencymarketdoesnotneedtomeetanycountries’reserverequirements.

C.AEurocurrencymarketenjoystheprivilegeoffreeflowofcapitals

D.Alloftheabovemustbetrue

10.CitigroupinLosAngelesborrowsaCanadiandollar-denominateddepositfromUnionBankofSwitzerland(UBS)inGeneva.Thisisa__________deposit.

A.Euronote

B.Euro-Swissfranc

C.Euro-Canadiandollar

D.Eurobond

11.WhichofthefollowingisNOTtrueabouttheoriginalEurodollar?

A.TheSovietUnionmaintaineddollar-denominateddepositsinU.S.banksintheearly1950s.TheSovietgovernmentfearedthatU.S.mightfreezethosedepositsbecauseoftheColdWar.

B.TheSovietUnionmovedthosedollarstobanksinLondon.

C.SincethedollarswereinEurope,theywerecalled“Eurodollars”.

D.TheSovietUnionworriedthattheU.S.wouldnotconverttheU.S.dollarintothegoldaspromised.

12.Therearemanywaystoclassifyfinancialmarkets.Thecategoryofmoneymarketandcapitalmarketismadeaccordingto__________.

A.whetherornottheyareregulatedbyasinglecountry

B.whetherornotafinancialintermediarystandsbetweenborrowersandsavers

C.thematurityofthefinancialassetsandliabilities

D.theparticipantsofthemarkets

III.TrueorFalse(2creditsforeachquestion,totalcredits2x10=20)

Eurocurrencymarketsareoutsidethejurisdictionofanysingleregulatoryauthority.

Banker’sacceptancemeansthatthedraftissuerpromisestopaythedraftwhenitisdue.

Domesticbondsaredenominatedindomesticcurrencybyanyborrower.

MostEurobondsareissuedinregisteredforminordertotracktheholderofthebonds.

TheEurocurrencymarketcontinuestothrivebecauseitisalargeinternationalmoneymarketrelativelyfreeofgovernmentregulationandinterference.

Oneoftheattractivefeaturesofabondisthatitisfreeofwithholdingtax.

T-billdealerspurchasesT-billsfromaninvestorandlatersellshimatahigherprice.Thisagreementiscalledarepo.

Syndicatedcreditisaloanbyseverallendersledbyaleadmanagertoprovidefundsforseveralborrowers.

IETrequiresU.S.residentswhoholdforeignbondsshouldpaytaxestothefederalgovernment.

EurocurrenciesarenotthesameastheeurodevelopedforthecommonEuropeancurrency.

AnswerstoAssignment(7)

I.Choicequestions(63credits)

1.C2.D3.C4.C5.B6.A7.B8.B9.D10.C11.D12.C

13.B14.B15.B16.C17.C18.B19.A20.A21.D

II.Problems(17credits)

1.

a.yesb.yesc.yesd.noe.nof.yesg.yesh.noi.noj.no

2.Ifborrowingdollar,obligation:5,000,000x(1+7.25%)=$5,362,500

IfborrowingHKdollar,obligation3