International Finance And Treasury - Study Mode

[#461] Maturity of debt instruments which faces more price fluctuations is
Correct Answer

(D) long term maturity

Explanation

Solution: Maturity of debt instruments which faces more price fluctuations is long term maturity. Term to maturity refers to the remaining life of a debt instrument. With bonds, term to maturity is the time between when the bond is issued and when it matures, known as its maturity date, at which time the issuer must redeem the bond by paying the principal or face value.

[#462] Financial instruments of public markets includes
Correct Answer

(C) shares

Explanation

Solution: Financial instruments of public markets includes shares. A financial instrument is a monetary contract between parties. We can create, trade, or modify them. We can also settle them. A financial instrument may be evidence of ownership of part of something, as in stocks and shares. Bonds, which are contractual rights to receive cash, are financial instruments.

[#463] Centralized market place where agents can have efficiently and quickly transactions is classified as
Correct Answer

(A) secondary markets

Explanation

Solution: Centralized market place where agents can have efficiently and quickly transactions is classified as secondary markets. The secondary market is where investors buy and sell securities they already own. It is what most people typically think of as the "stock market," though stocks are also sold on the primary market when they are first issued.

[#464] Risk arises from trading of assets because of change in asset prices and exchange rates is classified as
Correct Answer

(C) market risk

Explanation

Solution: Risk arises from trading of assets because of change in asset prices and exchange rates is classified as market risk. Market risk is the possibility of an investor experiencing losses due to factors that affect the overall performance of the financial markets in which he or she is involved. Market risk, also called "systematic risk," cannot be eliminated through diversification, though it can be hedged against in other ways.

[#465] Type of institutions that write securities, engage in brokerage and security trading are considered as
Correct Answer

(C) investment banks

Explanation

Solution: Type of institutions that write securities, engage in brokerage and security trading are considered as investment banks. An investment bank (IB) is a financial intermediary that performs a variety of services. Most Investment banks specialize in large and complex financial transactions, such as underwriting, acting as an intermediary between a securities issuer and the investing public, facilitating mergers and other corporate reorganizations and acting as a broker or financial adviser for institutional clients.