International Finance And Treasury - Study Mode

[#566] Debt which depict historical accumulated record of federal government expenditures is classified as
Correct Answer

(A) national debt

Explanation

Solution: Debt which depict historical accumulated record of federal government expenditures is classified as national debt. The national debt is the public and intragovernmental debt owed by the federal government. It's also called sovereign debt, country debt, or government debt. It consists of two types of debt. The first is debt held by the public.

[#567] In financial markets, STRIPS are also classified as
Correct Answer

(C) treasury zero coupon bonds

Explanation

Solution: In financial markets, STRIPS are also classified as treasury zero coupon bonds. A zero-coupon bond is a debt security that does not pay interest but instead trades at a deep discount, rendering a profit at maturity, when the bond is redeemed for its full face value.

[#568] Currency in which Eurobonds are denominated is decided by
Correct Answer

(B) issuers of bonds

Explanation

Solution: Currency in which Eurobonds are denominated is decided by issuers of bonds. Eurobonds are issued and traded internationally and are often not denominated in a currency native to the country of the issuer.

[#569] Face value of bond is $685 and call price of bond is $378 then value of call premium is
Correct Answer

(A) $307

Explanation

Solution: Value of call premium = Face value of bond - Call price of bond = $685 - $378 = $307.

[#570] Call premium of bond is $760 and call price of bond is $560 then face value of bond is
Correct Answer

(A) $200

Explanation

Solution: Face value of bond = Call premium of bond - Call price of bond = $760 - $560 = $200