91. Investment banks that are part of ________ are regulated and supervised like banks.

 bank holding companies

 insurance companies
 Freddie Mac
 Conmercial banks
 Fannie Mae

92. The Glass-Steagall Act, before its repeal in 1999, prohibited commercial banks from
 issuing equity to finance bank expansion.
 selling new issues of government securities.
 engaging in underwriting and dealing of corporate securities.
 purchasing any debt securities
 Selling any debt security
93. Financial innovations occur because of financial institutions search for ________.
 Fame
 stability
 recognition
 competition
 profits
94. The most significant change in the economic environment that changed the demand for
financial products in recent years has been
 the dramatic increase in the volatility of interest rates
 the aging of the baby-boomer generation
 the dramatic increase in competition from foreign banks.
 the deregulation of financial institutions.
95. The inaccurate ratings provided by credit-rating agencies
 were irrelevant since no one pays any attention to them anyway.
 meant that investors did not have the information they needed to make informed choices
about their investments
 meant that investors actually took on less risk.
 meant that investors actually took high risk.
 will not be a problem when determining capital requirements under Basel 2
96. What is called the interest rate at a loan that is charged for commercial banks from the central
bank?
 discount rate
 yield
 repo
 policy rate
 refinancing
97. Which of the following best describes the SWIFT?
 way to execute small, however recurring retail payments through e-carriers and integrate
governmental entities maintaining payment operations
 Only A and B
 Only B and C
 It is a messaging network that financial institutions use to securely transmit information
and instructions through a standardized system of codes
 enables to realize on-line interbank transactions, considerably increase money circulation
intensity, and more flexibly manage liquidity by banks
98. What country is given credit for the birth of the Eurodollar market?
 The United States
 Japan
 The Soviet Union
 England
 China
99. The spectacular growth in international banking can be explained by
 the 1988 Basel Agreement.
 the rapid growth in international trade
 the desire for U.S. banks to escape burdensome domestic regulations.
 the creation of the World Trade Organization
 the creation of the IMF
100. U.S. dollar deposits in foreign banks outside the U.S. or in foreign branches of U.S. banks
are called ________.
 Atlantic dollars
 foreign dollars
 Eurodollars
 outside dollars
 European Currency Units.
101. What interest rate is considered as a benchmark for which global banks lend to one another
for short-term loans?
 LIBOR
 treasury yield
 coupon yield
 KIBOR
 federal rate
102. What kind of trade finance are proved on the banking system to help facilitate the import
and export of goods in international trading activity?
 letter of security, factoring and barter
 syndicated loan, invoice discounting and asset-based finance
 asset-based finance, forfaiting and countertrade
 letter of credit, forfaiting and countertrade
  exchange, eurodollar loan and factoring

103. The main center of the Eurodollar market is

 Basel.
 Paris.
 New York
 Moscow
 London.
104. Deposits in European banks denominated in dollars for the purpose of international
transactions are known as
 European Currency Units.
 Eurodollars.
 European Monetary Units.
 International Monetary Units.
 Spacial Drawing Rights

105. The difference between the bid price and the ask price in a forex quote is normally called
_____.
 Margin
 Bid rate
 Spread
 Ask rate
 Discount rate

106. What kind of trade finance are proved on the banking system to help facilitate the import
and export of goods in international trading activity?
 letter of credit, forfaiting and countertrade
 syndicated loan, invoice discounting and asset-based finance
 letter of security, factoring and barter
 exchange, eurodollar loan and factoring
 asset-based finance, forfaiting and countertrade

107. What is forfaiting transaction in international trading activity?

 This a legal banking agreement that allows importers to offer secure terms to exporters
and from a bank guarantees the seller that, if various documents are presented, the bank
will pay the seller the amount du
 It is a general term used to cover a variety of commercial mechanisms for reciprocal trade
and used probably the oldest and best-known example; however, other techniques such as
switch-trading, buy-back, counter-purchase and offset have develope
  Such an agreement offers security to the seller, as it is an assurance of payment from an
international bank, on the condition that the terms of the letter of credit are complied
with.
 This is one for which the arrangers guarantee the entire commitment and then syndicate
the loan to other banks and institutional investors
 It refer to the exporter agrees to surrender the rights to claim for payment of goods or
services delivered to an importer under a contract of sale, in return for a cash payment
from a bank.

108. In this transaction, the borrower enters into a single credit agreement with a group of
lenders covering all of the loan facilities provided to the borrower by the lenders. Transaction
agreement might take the place of multiple bilateral credit agreements between the borrower and
each lender or be used in lieu of a participation because all of the lenders are in privity with the
borrower. The explanation is related to:

 syndicated loans
 participation loans
 letter of credit
 factoring
 integrated loans

109. What is a multinational banking?

 It suggests that overseas activity occurs so that firms can take advantage of international
factor price differences.
 It refers to banks having some element of ownership and control of banking operations
outside their home market.
 It means that in many areas of business (and particularly in banking) it may be difficult to
undertake cross-border activity without a physical presence within a country.
 This means that in many areas of business it may be difficult to undertake cross-border
activity without a physical presence within a country.
 It states that the investment decisions of banks stem from a conscious effort by managers
to diversify earnings and therefore reduce risk.

110. The main theories describing the motives for overseas expansion relate to:
 low cost, high arbitrage; high price and trade opportunity; ownership disadvantage; high
managerial skills; investment opportunity;
 diversification of income; economic environment; demographic advantage; consumer
differentiation; attract more capital; technological advantage
 factor price differentials; trade barriers; arbitrage and the cost of capital; ownership
advantages; diversification of earnings; excess managerial capacity;
 factor price differentials; trade barriers; high arbitrage; high price and trade opportunity;
technological advantage; investment opportunity
 diversification of income; economic environment; ownership disadvantage; high
managerial skills; diversification of earnings; excess managerial capacity;
169. Open market purchase by Central bank are
 buying government securities
 selling government securities
 discount rate
 reserve requirement
 foreign direct investment

170. Sold and bought securities by Central bank are called

 reserve requirments
 setting discount rate
 refinancing financial institutions
 lender of last resort function
 open market operations

171. Which kind of risk indicates the possibility of future change in price of asset which leads to
loss of return?

 liquidity risk
 interest rate risk
 foreign exchange risk
 market risk
 credit risk