International Finance And Treasury - Study Mode
[#426] More coupon payment or promised interest payment
Correct Answer
(B) lower its duration
Explanation
Solution: More coupon payment or promised interest payment lower its duration. Duration is a measure of the sensitivity of the price of a bond or other debt instrument to a change in interest rates. A bond's duration is easily confused with its term or time to maturity because they are both measured in years.
[#427] A credit in balance of payments indicates
Correct Answer
(C) Earning of foreign exchange by the country
Explanation
Solution: A credit in balance of payments indicates earning of foreign exchange by the country. The balance of payments (BOP) is the place where countries record their monetary transactions with the rest of the world.
[#428] A debit in balance of payments does not indicate
Correct Answer
(D) Export of goods and services
Explanation
Solution: A debit in balance of payments does not indicate export of goods and services.
[#429] The current account of balance of payments includes
Correct Answer
(B) Portfolio investments
Explanation
Solution: The current account of balance of payments includes Portfolio investments. An investment portfolio is a collection of assets owned by an individual or by an institution. But most investment portfolios, particularly portfolios that are assembled to pay for a retirement, are made up mainly of securities, such as stocks, bonds, mutual funds, money market funds and exchange traded funds.
[#430] A country has a negative balance of trade it means the balance of payments on current account
Correct Answer
(D) Should be same as balance of trade
Explanation
Solution: A country has a negative balance of trade it means the balance of payments on current account should be same as balance of trade. The balance of trade is the difference between the value of a country's imports and exports for a given period. The balance of trade is the largest component of a country's balance of payments.