68) Foreign bonds sold in the United States are
A) Yankee bonds.
B) Uncle Sam‘s bonds.
C) Bulldogs.
D) Eagles.
69) ________ are normally underwritten by an international syndicate of banks.
A) Samurai bonds
B) Eurobonds
C) Yankee bonds
D) Foreign bonds
70) Eurodollars are
A) the exchange value of the dollar with the euro.
B) used to pay for imports from Europe.
C) dollars banked outside of the United States.
D) the exchange buffer that the euro has against dollar.
71) Which of the following statements is true of Eurocurrency?
A) The Eurocurrency market is a relatively high-cost source of funds.
B) It is produced and banked within European countries.
C) Eurocurrency can be created anywhere in the world.
D) It is used only for internal transactions within European Union.
72) The main factor that makes the Eurocurrency market attractive to both depositors and
borrowers is that it
A) is separated from the foreign exchange market.
B) lacks government regulation.
C) is associated with low risk.
D) gives high levels of investor protection.
73) Banks offer higher interest rates on Eurocurrency deposits than on deposits made in the home
currency because Eurocurrency deposits
A) are funded by the European union.
B) lack government regulations.
C) are associated with low risk.
D) have minimum foreign exchange risk.
74) What is an advantage that banks have when they deal with foreign currencies?
A) Interest payments to customers are low when dealing with foreign currencies.
B) Accounts need not be maintained when dealing with foreign currencies.
C) Risks that investors face are low when dealing with foreign currencies.
D) Governments give banks more freedom when dealing with foreign currencies.
75) When using the Euromarkets, companies
A) have funds that lack liquidity.
B) pay less for loans.
C) attract low interest rates.
D) are secured from foreign exchange risks.
76) One drawback of the Eurocurrency market is
A) increased governmental controls.
B) high reserve ratio requirements.
C) low interest rates on deposits.
D) exposure to foreign exchange risk.
77) Which of the following is true of fixed-rate bonds?
A) Returns from fixed-rate bonds are dependent on the profitability of the issuing company.
B) Investors get back the face value of the bond at maturity of fixed–rate bonds.
C) Fixed-rate bonds issue cash payoffs only at maturity of fixed–rate bonds.
D) Investors get a share of the company’s profit when using fixed-rate bonds.
78) ________ are sold outside of the borrower’s country and are denominated in the currency of
the country in which they are issued.
A) Micro bonds
B) Eurobonds
C) Foreign bonds
D) Regulatory bonds
79) The United States sells bonds that are denominated in dollars in Europe. This is an example of
a
A) foreign bond.
B) Eurobond.
C) micro bond.
D) regulatory bond.
80) ________ are international bonds, normally underwritten by an international syndicate of
banks and placed in countries other than the one in whose currency the bond is denominated.
A) Micro bonds
B) Foreign bonds
C) Eurobonds
D) Regulatory bonds
81) Eurobonds are
A) denominated in the currency of the country in which they are issued.
B) normally underwritten by an international syndicate of banks.
C) denominated in a currency that is accepted by the European Union.
D) sold outside the borrower’s county with reference to the originating currency.
82) An Italian corporation issues a bond denominated in dollars that has no regulatory interference.
This is an example of a
A) foreign bond.
B) Eurobond.
C) micro bond.
D) regulatory bond.
83) What makes Eurobonds more attractive than most major domestic bonds?
A) presence of regulatory interference
B) strong disclosure requirements
C) favorable tax status
D) protection from exchange risks
84) Historically, ________ separated national equity markets from each other.
A) substantial regulatory barriers
B) fixed exchange rates
C) financial similarities
D) desire for high levels of profit
85) Approximately two-thirds of all Eurocurrencies are
A) Euro-yen.
B) Euro-pound.
C) Euro-euro.
D) Euro-dollars.
86) Which of the following is a drawback of the Eurocurrency market?
A) Borrowing funds within its home country can expose a company to foreign exchange risk.
B) There is a greater probability of a bank failure that would cause depositors to lose their money.
C) The system is overregulated and, therefore, more costly.
D) The higher interest rate received on home-country deposits reflects the costs of insuring against
bank failure.
87) Which of the following is true of the Eurobond market?
A) There are many regulations that protect investors.
B) Government limitations are generally more stringent for securities denominated in foreign
currencies.
C) There are less stringent disclosure requirements than in most domestic bond markets.
D) They have an unfavorable tax status.