Chapter 7 - Chapter 7 Financial Swaps 1 2 3 4 5 Financial...

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Chapter 7 Financial Swaps 1. Financial swap markets have emerged in recent years because of the following reasons ___. A. exchange rates fluctuate widely B. interest rates fluctuate widely C. forward markets may not function properly D. currency futures are available only for selected currencies * E. all of the above 2. Financial swaps are used by the following organizations ___. A. multinational companies B. commercial banks C. world organizations D. sovereign governments * E. all of the above 3. The origins of the swap market are usually regarded as an outgrowth of the following financial instruments ___. A. parallel loans B. back-to-back loans C. commercial paper D. treasury bills * E. A and B 4. Typically, parallel loans involve the following parties . A. two multinational firms B. three multinational firms C. two subsidiary firms D. five multinational firms * E. A and C 5. A back-to-back loan usually involves companies in different countries. * A. two, two B. four, four C. three, three D. A and B E. all of the above
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6. The shortcomings of parallel and back-to-back loans include . A. difficulty of finding counterparties B. a non-compliance by one of the parties C. difficulty of finding exact matching needs D. A and B * E. A, B, and C 7. Currency swaps overcome the shortcomings of parallel and back-to-back loans because of . * A. specialized swap dealers and brokers B. their simplicity C. their cost effectiveness D. A and B E. A, B, and C 8. The first currency swap between the World Bank and IBM was arranged in 1981 by . A.
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Chapter 7 - Chapter 7 Financial Swaps 1 2 3 4 5 Financial...

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