Most federal agency issues have short maturities and offer slightly higher yields than U.S. Treasury issues having similar maturities. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The ACH (automated clearing house) debits are preauthorized electronic withdrawals from a payer’s account. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Describe how you construct the uncertain ₤-denominated return from investing 1 ₤ in the Swiss franc money market. What will be an ideal response? ANSWER Answer: If you invest ₤ in the Swiss money market, you first must convert from ₤ into Swiss francs in the spot foreign exchange market. With the Swiss […]
Date: September 19th, 2020
If you were attempting to forecast the forward exchange rate for a particular horizon such as 90 days, how would the forward exchange rate be an unbiased predictor of the future spot exchange rate? What will be an ideal response? ANSWER Answer: If the forward exchange rate for 90 days is an unbiased […]
Date: September 19th, 2020
If interest rate parity prevails, what is the return from a hedged foreign currency investment? What will be an ideal response? ANSWER Answer: A hedged foreign currency investment sells the known foreign currency return in the forward market at the time of the investment. This eliminates exposure to foreign exchange risk, but it […]
Date: September 19th, 2020
Zero-balance accounts are checking accounts in which a zero balance is maintained and the bank automatically covers all checks presented against the accounts. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Federal agency issues are low-risk securities issued by government agencies but not guaranteed by the U.S. Treasury. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Eurodollar deposits are deposits of currency that are not native to the country in which the bank is located. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
To be truly marketable, a security must have three basic characteristics: a ready market, risk-free, and safety of principal. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Marketable securities are short-term, interest-earning, money market instruments that can easily be converted into cash. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
