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21.
The market value of the Blackwell Corporation just declined by 5 percent.
Analysts believe this decrease in value was caused by recent legislation
passed by Congress. Which type of risk does this illustrate?
22.
Where does most of the trading in Eurobonds occur?
23.
Which one of the following names matches the country where the bond is
issued?
24.
The LIBOR is primarily used as the basis for the rate charged on:
25.
A basic interest rate swap generally involves trading a:
26.
Which one of the following statements is correct concerning the foreign
exchange market?
27.
Triangle arbitrage:
I. is a profitable situation involving three separate currency exchange
transactions.
II. helps keep the currency market in equilibrium.
III. opportunities can exist in either the spot or the forward market.
IV. is based solely on differences in exchange ratios between spot and
futures markets.
28.
Spot trades must be settled:
29.
Assume the euro is selling in the spot market for $1.33. Simultaneously, in
the 3-month forward market the euro is selling for $1.35. Which one of the
following statements correctly describes this situation?
30.
Which one of the following formulas expresses the absolute purchasing
power parity relationship between the U.S. dollar and the British pound?
31.
Which of the following conditions are required for absolute purchasing
power parity to exist?
I. goods must be identical
II. goods must have equal economic value
III. transaction costs must be zero
IV. there can be no barriers to trade
32.
Absolute purchasing power parity is most apt to exist for which one of the
following items?
33.
Relative purchasing power parity:
34.
Which one of the following formulas correctly describes the relative
purchasing power parity relationship?
35.
Which one of the following statements is correct given the following
exchange rates?
36.
Which of the following variables used in the covered interest arbitrage
formula are correctly defined?
I. RFC: Foreign country nominal risk-free interest rate
II. RUS: U.S. real risk-free interest rate
III. F1: 360-day forward rate
IV. S0: Current spot rate expressed in units of foreign currency per one U.S.
dollar
37.
Interest rate parity:
38.
The interest rate parity approximation formula is:
39.
The unbiased forward rate is a:
40.
The forward rate market is dependent upon:
