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
How would economists most often define a perfectly competitive market? A) Many firms compete with one another, and the cost of entering the market is low. B) Many firms compete with one another, and the cost of entering the market is high. C) Firms do not compete with one another, and the cost of entering […]
Date: September 19th, 2020
The degree of operating leverage is defined as: A) the percent change in EBIT over the percent change in sales B) the percent change in EPS over the percent change in EBIT C) the percent change in EPS over the percent change in sales D) the percent change in EBIT over the percent change in […]
Date: September 19th, 2020
Which one of the following firms dominates the foreign exchange markets? A) No one firm dominates. B) Deutsche Bank C) UBS D) Citigroup ANSWER Answer: A
Date: September 19th, 2020
The degree of financial leverage is defined as: A) the percent change in EBIT over the percent change in sales B) the percent change in EPS over the percent change in EBIT C) the percent change in EPS over the percent change in sales D) the percent change in EBIT over the percent change in […]
Date: September 19th, 2020
When an exchange rate is quoted by a dealer in country as the local currency price of one unit of foreign currency, he is quoting the ________. A) indirect quote B) direct quote C) bid quote D) ask quote ANSWER Answer: B
Date: September 19th, 2020
Which one of the following features is not part of the interbank foreign exchange market? A) derivative securities such as foreign currency futures and options B) trade in swaps and forward contracts C) immediate exchanges of monies D) non-strategic loans ANSWER Answer: D
Date: September 19th, 2020
