International Finance And Treasury - Study Mode

[#736] Price at which stock is sold to investors by investment banks is called
Correct Answer

(A) Gross proceeds

Explanation

Solution: Price at which stock is sold to investors by investment banks is called Gross proceeds. Gross Proceeds means the aggregate purchase price of all Shares sold for the account of the Company through an Offering, without deduction for Selling Commissions, volume discounts, any marketing support and due diligence expense reimbursement or Organization and Offering Expenses.

[#737] Underwriter spread of stock is $17000 and net proceeds of stock are $24000 then gross proceeds are
Correct Answer

(A) $41,000

Explanation

Solution: Gross proceeds = Underwriter spread of stock + Net proceeds of stock = $17000 + $24000 = $41,000.

[#738] If time value of an option is $200 and intrinsic value of an option is $250 then price of option is
Correct Answer

(B) $550

Explanation

Solution: Price of option = Time value of an option + Intrinsic value of an option = $200 + $250 = $550.

[#739] Type of unit which guarantees that all buying and selling will be made by traders of exchange is called
Correct Answer

(C) clearing house

Explanation

Solution: Type of unit which guarantees that all buying and selling will be made by traders of exchange is called clearing house. A clearing house acts as an intermediary between a buyer and seller and seeks to ensure that the process from trade inception to settlement is smooth. Its main role is to make certain that the buyer and seller honor their contract obligations.

[#740] Which among the following statements is not true relating to 'Crawling Peg System' of exchange rate?
Correct Answer

(B) It allows a narrow margin of fluctuations as compared to adjustable peg system