International Finance And Treasury - Study Mode
[#221] Repurchase agreements having maturity of longer term have denominations of
Correct Answer
(B) $10 million
Explanation
Solution: Repurchase agreements having maturity of longer term have denominations of $10 million. A repurchase agreement (repo) is a form of short-term borrowing for dealers in government securities. In the case of a repo, a dealer sells government securities to investors, usually on an overnight basis, and buys them back the following day at a slightly higher price.
[#222] Type of market in which short term instruments are traded and purchased by economic units is classified as
Correct Answer
(A) money markets
Explanation
Solution: Type of market in which short term instruments are traded and purchased by economic units is classified as money markets. The money market is the trade in short-term debt investments. At the wholesale level, it involves large-volume trades between institutions and traders. At the retail level, it includes money market mutual funds bought by individual investors and money market accounts opened by bank customers.
[#223] In treasury bills auction, treasury bills are sold at
Correct Answer
(B) discount basis
Explanation
Solution: In treasury bills auction, treasury bills are sold at discount basis. Treasury bills are sold at a discount to the par value. It is a static value determined at the time of issuance and, unlike market value, it doesn't fluctuate on a regular basis., which is its actual value.
[#224] Non-competitive bidding of treasury bills also allows participation of
Correct Answer
(C) small investors
Explanation
Solution: Non-competitive bidding of treasury bills also allows participation of small investors. Non-competitive bidding means the bidder would be able to participate in the auctions of dated government securities without having to quote the yield or price in the bid.
[#225] International capital market
Correct Answer
(D) foreign exchange rates
Explanation
Solution: International capital market foreign exchange rates. An international capital market is a financial system by which governments, companies and individuals borrow and invest money trans-nationally. It is comparable to a capital market, which enables government entities, companies and individuals to borrow and invest domestically.