International Finance and Treasury MCQs

✅ The correct answer is option C.
Acquisition of a foreign subsidiary is not a means in which agency troubles can be lessen through corporate rule.

✅ The correct answer is option D.
Voting ballot that is sent to stock holders by corporation is classified as proxy. A proxy is an agent legally authorized to act on behalf of another party or a format that allows an investor to vote without being physically present at the meeting.

✅ The correct answer is option B.
We multiply foreign revenue with rate with respect to that country is Spot rate. The spot rate is the price quoted for immediate settlement on a commodity, a security or a currency. The spot rate, also referred to as the “spot price,” is the current market value of an asset at the moment of the quote.

✅ The correct answer is option A.
A main difference among real and nominal interest proceeds is that real returns adjust for inflation and nominal returns do not. A real rate of return is the annual percentage return realized on an investment, which is adjusted for changes in prices due to inflation or other external factors. Adjusting the nominal return to compensate for factors such as inflation allows you to determine how much of your nominal return is real return.

✅ The correct answer is option B.
Names of foreign bonds are used to denote country of origin. A foreign bond is a bond that is issued in a domestic market by a foreign entity, in the domestic market’s currency.

✅ The correct answer is option B.
Type of negotiable certificate of deposits is usually classified as bearer instrument. A bearer instrument, or bearer bond, is a type of fixed-income security in which no ownership information is recorded and the security is issued in physical form to the purchaser.

✅ The correct answer is option A.
Debentures that are considered as junior bonds as compared to debentures and mortgage bonds are classified as subordinated debentures. Subordinated debenture is a bond classified lower than more senior debt in the event of a default. This means that the holders of more senior securities are paid first, before any residual funds are made available to the holder of the subordinated debenture.

✅ The correct answer is option A.
MIGA stands for Multilateral Investment Guarantee Agency. The Multilateral Investment Guarantee Agency (MIGA) is an international financial institution which offers political risk insurance and credit enhancement guarantees.

✅ The correct answer is option A.
Treasury bills have high liquidity because of extensive secondary markets. A Treasury Bill (T-Bill) is a short-term U.S. government debt obligation backed by the Treasury Department with a maturity of one year or less.

✅ The correct answer is option D.
IMF augments its resources by borrowing under General arrangements to borrow, New arrangements to borrow and Trust funds.