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International Finance and Treasury MCQ questions
Question 1 [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
treasury KIBOR notes
treasury KIBOR bonds
treasury zero coupon bonds
treasury LIBOR bonds
Zero Coupon Treasury Bonds (STRIPS) Zero coupon bonds are essentially the same product as all Treasury bonds, but they are paid out in a different manner. Essentially, instead of receiving the interest payments on the bond during the life of the bond, which is typical, the investor will receive the payment in full when the bond matures.
Zero-coupon notes and bonds are not issued by the US Treasury. Instead, "Treasury zeros " are created by financial institutions and government securities brokers and dealers through the Treasury's STRIPS program.
Let's say a zero coupon bond is issued for $500 and will pay $1,000 at maturity in 30 years. Divide the $1,000 by $500 gives us 2. Raise 2 to the 1/30th power and you get 1.02329. Subtract 1, and you have 0.02329, which is 2.3239%. Advantages of Zero-coupon Bonds. Most bonds typically pay out a coupon every six months.
STRIPS are called "zero-coupon" securities. The only time an investor receives a payment from STRIPS is at maturity. STRIPS are not issued or sold directly to investors. STRIPS can be purchased and held only through financial institutions and government securities brokers and dealers.
Question 2 [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
increase in KIBOR
decrease in KIBOR
decrease in federal funds rate
increase in federal funds rate
US Dollar Short-term Benchmarks and Reference Rates. CME STIR futures offerings are based on widely used USD reference rates: Three-month US dollar ICE LIBOR ® is the benchmark for final settlement of GE futures; The daily effective federal funds rate (EFFR) is the reference for final settlement of ZQ futures.
The top Fed funds brokers also broker Eurodollars and speak to a wide range of banks including the majority of the large and medium-sized banks. The characteristics of dollar-denominated assets and liabilities in the Fed funds market and the overnight Eurodollar market are nearly identical and the two overnight funds could be close substitutes. 3.
Question 3 [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
parallel term income
Question 4 [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Current account is the financial account of the economy or any individual entity which shows results of various revenue income and expenditure and calculates revenue profits while capital account indicates various capital income and expenditure like purchase and sale of fixed asset, capital repairs, sale of investments etc
Question 5 [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Duration is expressed in terms of years, but it is not the same thing as a bond's maturity date. That said, the maturity date of a bond is one of the key components in figuring duration, as is the bond's coupon rate. In the case of a zero-coupon bond, the bond's remaining time to its maturity date is equal to its duration.