The fourth decimal place in a dealer’s quote in the trade jargon is known as the A) pip. B) round trip. C) spread. D) haircut. ANSWER Answer: A
Date: September 19th, 2020
What is the name of the risk that a financial institution may not deliver the currency on one side of a completed currency transaction? A) dealer risk B) market risk C) Herstatt risk D) exchange rate risk ANSWER Answer: C
Date: September 19th, 2020
What is the name of the computer network in which member banks globally send and receive messages pertaining to foreign exchange transactions? A) Fed funds B) SWIFT C) CHIPS D) The Automated Clearing House (ACH) ANSWER Answer: B
Date: September 19th, 2020
Selected financial information for the Baltimore & Ohio Railroad Corporation (B&O) is provided in the table below. B&O is currently all equity financed, but it is considering a leveraged capital structure, details of which are presented in the column labeled ‘Proposed’. Under the proposed capital structure, B&O will use all of the new debt to […]
Date: September 19th, 2020
Cyborg Mechatronics is entirely equity financed with 400 shares outstanding and a market capitalization of $18,750 (P=$46.875). Current financial data for Cyborg is provided in the table below for two states of nature, which correspond with two levels of sales. The standard deviation of EPS is $1.875. The CFO of Cyborg, John Conner, is considering […]
Date: September 19th, 2020
Which of the following statements is true? A) A graph of the relationship between EPS and EBIT is steeper when the firm is leveraged. B) At the indifference point on an EPS-EBIT graph, two financing alternatives provide the same EBIT. C) Firms are more likely to use greater levels of debt when predicted EBIT is […]
Date: September 19th, 2020
When it comes to currency transfers, what is the most important global interbank communications network? A) CHIPS B) TARGET C) SWIFT D) RTGS ANSWER Answer: C
Date: September 19th, 2020
When it comes to trading global currency, all of the following markets are in the top five EXCEPT: A) London. B) Singapore. C) Tokyo. D) Frankfurt. ANSWER Answer: C
Date: September 19th, 2020
$100 today is worth A) the same as $100 to be received in one year, since the inflation rate has been low recently and funds received in the near future should have the same purchasing power that they have today. B) less than $100 to be received in one year, since many people will spend […]
Date: September 19th, 2020
If you were trading currency in the New York currency market, the exchange rate between two currencies not expressed in U.S. dollars would be known as the ________ quote. A) direct B) indirect C) cross-rate D) European ANSWER Answer: C
Date: September 19th, 2020
