Disbursement float is experienced by a payee and is a delay in the actual withdrawal of funds. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Mail float is the delay between the deposit of a check by a payee and the actual availability of the funds. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Collection float results from the lapse between the time that a firm deducts a payment from its checking account ledger and the time that funds are actually withdrawn from its accounts. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The empirical evidence indicates that interest rate parity is the norm, especially during periods of financial market ________. A) arbitrage B) turbulence C) profit-taking D) tranquility ANSWER Answer: D
Date: September 19th, 2020
What is the market portfolio? A) the large, well-diversified portfolio that investors should hold according to finance theory B) the large, well-diversified portfolio without international securities C) the portfolio that represents a global portfolio D) the portfolio with strictly domestic securities ANSWER Answer: A
Date: September 19th, 2020
The entire process resulting from a check issue and mail by a payer company to a payee company (i.e., mail float, processing float, and clearing float) is disbursement float to the payer company and is collection float to the payee company. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
If interest rate parity is in effect, there are ________. A) no profitable opportunities for covered interest arbitrage B) many opportunities for covered interest arbitrage C) currency dealers will arbitrage interest rate differentials in different countries D) currency dealers will be motivated to arbitrage forward market contracts ANSWER Answer: A
Date: September 19th, 2020
When it is said that there exists covered interest arbitrage opportunities, the term covered means the arbitrage is not exposed to A) exchange rate risk. B) manipulation by speculators. C) central bank interventions. D) government actions against the arbitrageurs. ANSWER Answer: A
Date: September 19th, 2020
What is the name for the bank market for deposits and loans that is denominated in a currency different to the currency of the country in which a bank is operating? A) internal currency market B) foreign exchange market C) external currency market D) interbank market ANSWER Answer: C
Date: September 19th, 2020
An example of an external currency market that was the first to form was the market where the dollar-denominated deposits were known as A) Euros. B) Eurodollars. C) petrodollars. D) exchange traded funds. ANSWER Answer: B
Date: September 19th, 2020
