International Finance And Treasury - Study Mode

[#511] Deposit that are required in futures contract and is considered as guarantee that conditions of contracts would be fulfilled is classified as
Correct Answer

(A) initial margin

Explanation

Solution: Deposit that are required in futures contract and is considered as guarantee that conditions of contracts would be fulfilled is classified as initial margin. Initial margin is the percent of a purchase price that must be paid with cash when using a margin account.

[#512] Which of the following institutions cannot be included in the international financial and monetary system?
Correct Answer

(A) WTO

Explanation

Solution: WTO institutions cannot be included in the international financial and monetary system. The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations.

[#513] Cash and carry arbitrage explains the determination of
Correct Answer

(A) Forward Rates for currencies

Explanation

Solution: Cash and carry arbitrage explains the determination of Forward Rates for currencies. Cash-and-carry-arbitrage is a market neutral strategy combining the purchase of a long position in an asset such as a stock or commodity, and the sale (short) of a position in a futures contract on that same underlying asset.

[#514] International Monetary Fund is headquartered in
Correct Answer

(A) Washington, United States

Explanation

Solution: International Monetary Fund is headquartered in Washington, United States, consisting of 189 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world while periodically depending on World Bank for its resources.

[#515] The margin for a currency future should be maintained with the clearing house by
Correct Answer

(C) Both the buyer and the seller

Explanation

Solution: The margin for a currency future should be maintained with the clearing house by both the buyer and the seller. Initial Futures Margin is the amount of money that is required to open a buy or sell position on a futures contract.