INTERNATIONAL FINANCE MIDTERM STUDY GUIDE QUESTIONS
ANSWERED CORRECTLY LATEST UPDATE
1. Inflation tends to have a favorable impact on
a. Gold
b. Bonds
c. Real Estate: c. Real Estate
2. After the first round of voting on Friday, 21 April 2017, Emmanuel Macron (who is pro-Europe
and wants FRA in the euro) beat Marine Le Pen (who
is anti-Europe and wants FRA out of the euro) by 24% to 21%. This how financial markets reacted:
April 21 (before election) . Fr. sovereign 10-yr bond yield: 1.05% . Ger. sovereign 10-yr bond yield:
0.24% . Credit Default Swap on Fr. bond: 114bp (1.14%) . USD/EUR: 1.0728 . CAC-40 Fr. Stock
market index: 5059.20 April 24 (after election). Fr. sovereign 10-yr bond yield: 0.79%
. Ger. sovereign 10-yr bond yield: 0.41% . Credit Default Swap on Fr. bond: 71bp (0.71%) . USD/EUR:
1.0926 . CAC-40 Fr. Stock market index: 5268.85 The reaction of investors in financial markets and the
overall level of risk has
a. Negative in FRA and negative in GER
b. been positive in FRA and negative in GER
c. Negative in FRA and positive in GER
d. Negative in FRA and negative in GER: b. been positive in FRA and negative in GER
3. The market interest rate is:
a. Risk Free + Market risk premiums
b. We can't determine
c. Equivalent to the US stock market
d. inflation
e. Risk Premiums: a. Risk Free + Market risk premiums
4. Inflation tends to have a particularly negative impact on the price of
a. Bonds
b. Commodities
c. Real Estate
, d. Crude Oil: a. Bonds
5. The stock market with the most stringent listing requirements is the
a. NASDAQ Stock Market.
b. All organized exchanges have the same listing requirements in order to make trading fair for all
investors.
c. New York Stock Exchange (NYSE).
d. It depends on the year New York Stock Exchange (NYSE).
e. American Stock Exchange (AMEX).: a. NASDAQ Stock Market.
c. New York Stock Exchange (NYSE).
d. It depends on the year New York Stock Exchange (NYSE).
6. Which of the following statements is false?
a. Brokers purchase securities for their own account.
b. Equity markets are mainly stock markets
c. Fixed income investment are mainly bonds
d. Most corporate bond trading takes place over the counter.
e. Broker-dealers stand ready to buy and sell specific securities at selected prices.: a. Brokers
purchase securities for their own account.
7. Capital market transactions include which of the following?
a. US Treasury bills
b. common stock of a public corporation
c. Certificate of deposits with maturity of 3 months
d. any security that is purchased from a brokerage firm that is well capitalized
e. all securities that are purchased in the open market: b. common stock of a public corporation
8. The real rate of return is the return earned above the
a. inflation risk premium.
b. risk-adjusted return.
c. default risk premium.
d. Market Risk Premium
e. variability of returns measured by standard deviation.: a. inflation risk premi- um.
9. The investment banker performs three basic functions: (1) underwriting, (2) distributing, and (3)
ANSWERED CORRECTLY LATEST UPDATE
1. Inflation tends to have a favorable impact on
a. Gold
b. Bonds
c. Real Estate: c. Real Estate
2. After the first round of voting on Friday, 21 April 2017, Emmanuel Macron (who is pro-Europe
and wants FRA in the euro) beat Marine Le Pen (who
is anti-Europe and wants FRA out of the euro) by 24% to 21%. This how financial markets reacted:
April 21 (before election) . Fr. sovereign 10-yr bond yield: 1.05% . Ger. sovereign 10-yr bond yield:
0.24% . Credit Default Swap on Fr. bond: 114bp (1.14%) . USD/EUR: 1.0728 . CAC-40 Fr. Stock
market index: 5059.20 April 24 (after election). Fr. sovereign 10-yr bond yield: 0.79%
. Ger. sovereign 10-yr bond yield: 0.41% . Credit Default Swap on Fr. bond: 71bp (0.71%) . USD/EUR:
1.0926 . CAC-40 Fr. Stock market index: 5268.85 The reaction of investors in financial markets and the
overall level of risk has
a. Negative in FRA and negative in GER
b. been positive in FRA and negative in GER
c. Negative in FRA and positive in GER
d. Negative in FRA and negative in GER: b. been positive in FRA and negative in GER
3. The market interest rate is:
a. Risk Free + Market risk premiums
b. We can't determine
c. Equivalent to the US stock market
d. inflation
e. Risk Premiums: a. Risk Free + Market risk premiums
4. Inflation tends to have a particularly negative impact on the price of
a. Bonds
b. Commodities
c. Real Estate
, d. Crude Oil: a. Bonds
5. The stock market with the most stringent listing requirements is the
a. NASDAQ Stock Market.
b. All organized exchanges have the same listing requirements in order to make trading fair for all
investors.
c. New York Stock Exchange (NYSE).
d. It depends on the year New York Stock Exchange (NYSE).
e. American Stock Exchange (AMEX).: a. NASDAQ Stock Market.
c. New York Stock Exchange (NYSE).
d. It depends on the year New York Stock Exchange (NYSE).
6. Which of the following statements is false?
a. Brokers purchase securities for their own account.
b. Equity markets are mainly stock markets
c. Fixed income investment are mainly bonds
d. Most corporate bond trading takes place over the counter.
e. Broker-dealers stand ready to buy and sell specific securities at selected prices.: a. Brokers
purchase securities for their own account.
7. Capital market transactions include which of the following?
a. US Treasury bills
b. common stock of a public corporation
c. Certificate of deposits with maturity of 3 months
d. any security that is purchased from a brokerage firm that is well capitalized
e. all securities that are purchased in the open market: b. common stock of a public corporation
8. The real rate of return is the return earned above the
a. inflation risk premium.
b. risk-adjusted return.
c. default risk premium.
d. Market Risk Premium
e. variability of returns measured by standard deviation.: a. inflation risk premi- um.
9. The investment banker performs three basic functions: (1) underwriting, (2) distributing, and (3)
