International Finance Exam 2024-2025
with Verified Answers
One reason Eurocurrency deposit rates are higher than domestic rates is due to the fact that
✔️✔️they must be higher to attract domestic depositors
The rate of interest paid at which high-quality borrowers can borrow at lower rates in the
eurocurency markets is known as the ____ rate. ✔️✔️LIBID
Historically, most Eurobonds have been ________ denominated ✔️✔️U.S. dollar
The ________ , which resembles the U.S. commercial paper market, allows borrowers to issue
their own short-term euronotes ✔️✔️note issuance facility
Debt denominated in a foreign currency that is launched, priced and traded in Asia is referred to
as a _________ bond ✔️✔️dragon
Which one of the following factors does NOT promote well-functioning financial markets?
✔️✔️high tariffs
The process of securitization reflects ✔️✔️all of the above
a. new technology that has lowered the costs of compiling, accessing, and manipulating data
,b. financial deregulation that raised the cost of funds to banks
c. lower costs of accessing public markets directly
The globalization of financial markets reflects ✔️✔️all of the above
a. financial deregulation, which spurs competition among markets
b. reductions in currency controls and other government restrictions on cfree flow of capital
internationally
c. new technology that has lowered the cost of information
Why are privately placed bonds more difficult to sell than publicly issued bonds? ✔️✔️the
presence of customized covenants
Global growth in the financial markets is driven by each of the following EXCEPT
✔️✔️government capital controls
When the overwhelming majority of investors would be willing to pay more for the shares of a
well-governed company, ___________ is improved. ✔️✔️capital productivity
Which one of the following securities in the foreign bond markets has the least amount of risk to
the investor? ✔️✔️convertible bond
Which one of the following new issues of stock has the greatest probability of lowering its cost
of equity capital? ✔️✔️Apple stock on the London exchange
, Which one of the following banks is considered the most important in the development bank
industry? ✔️✔️World Bank
The process of securitization reflects ✔️✔️all of the above
a. new technology that has lowered the costs of compiling, accessing, and manipulating data
b. financial deregulation that raised the cost of funds to banks
c. lower costs of accessing public markets directly
The globalization of financial markets reflects ✔️✔️all of the above
a. financial deregulation, which spurs competition among markets
c. reductions in currency controls and other government restrictions on cfree flow of capital
internationally
c. new technology that has lowered the cost of information
Which one of the following is the MOST obvious example of the globalization of financial
markets? ✔️✔️the rise of the Euromarkets
Suppose the French government imposes an interest rate ceiling on French bank deposits. What
is the likely effect of this regulation? ✔️✔️reduce Eurofranc interest rates
One reason for the multicurrency clause in the euro markets is to avoid ✔️✔️exchange rate
risk
with Verified Answers
One reason Eurocurrency deposit rates are higher than domestic rates is due to the fact that
✔️✔️they must be higher to attract domestic depositors
The rate of interest paid at which high-quality borrowers can borrow at lower rates in the
eurocurency markets is known as the ____ rate. ✔️✔️LIBID
Historically, most Eurobonds have been ________ denominated ✔️✔️U.S. dollar
The ________ , which resembles the U.S. commercial paper market, allows borrowers to issue
their own short-term euronotes ✔️✔️note issuance facility
Debt denominated in a foreign currency that is launched, priced and traded in Asia is referred to
as a _________ bond ✔️✔️dragon
Which one of the following factors does NOT promote well-functioning financial markets?
✔️✔️high tariffs
The process of securitization reflects ✔️✔️all of the above
a. new technology that has lowered the costs of compiling, accessing, and manipulating data
,b. financial deregulation that raised the cost of funds to banks
c. lower costs of accessing public markets directly
The globalization of financial markets reflects ✔️✔️all of the above
a. financial deregulation, which spurs competition among markets
b. reductions in currency controls and other government restrictions on cfree flow of capital
internationally
c. new technology that has lowered the cost of information
Why are privately placed bonds more difficult to sell than publicly issued bonds? ✔️✔️the
presence of customized covenants
Global growth in the financial markets is driven by each of the following EXCEPT
✔️✔️government capital controls
When the overwhelming majority of investors would be willing to pay more for the shares of a
well-governed company, ___________ is improved. ✔️✔️capital productivity
Which one of the following securities in the foreign bond markets has the least amount of risk to
the investor? ✔️✔️convertible bond
Which one of the following new issues of stock has the greatest probability of lowering its cost
of equity capital? ✔️✔️Apple stock on the London exchange
, Which one of the following banks is considered the most important in the development bank
industry? ✔️✔️World Bank
The process of securitization reflects ✔️✔️all of the above
a. new technology that has lowered the costs of compiling, accessing, and manipulating data
b. financial deregulation that raised the cost of funds to banks
c. lower costs of accessing public markets directly
The globalization of financial markets reflects ✔️✔️all of the above
a. financial deregulation, which spurs competition among markets
c. reductions in currency controls and other government restrictions on cfree flow of capital
internationally
c. new technology that has lowered the cost of information
Which one of the following is the MOST obvious example of the globalization of financial
markets? ✔️✔️the rise of the Euromarkets
Suppose the French government imposes an interest rate ceiling on French bank deposits. What
is the likely effect of this regulation? ✔️✔️reduce Eurofranc interest rates
One reason for the multicurrency clause in the euro markets is to avoid ✔️✔️exchange rate
risk
