A credit 512100 b credit 500000 c debit 100000 d

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A) credit; €512,100 B) credit; $500,000 C) debit; €100,000 D) debit; $256,000 A Q45) The primary activities of offshore banks A) is to seek deposits and grant loans in currencies other than the currency of the host government . B) include money laundering where banking secrecy laws are strict. C) involve check clearing of large bags of checks. D) none of the options C Q46) The core of the international money market is A) the futures forwards and options markets on foreign exchange. B) the market for foreign exchange. C) the Eurocurrency market. D) none of the options B Q47) In an FRA, the buyer agrees to pay the seller A) the increased interest cost if interest rates increase above the agreement rate. B) the increased interest cost on a notional amount if interest rates fall below an agreement rate. C) the increased interest cost on a notional amount if interest rates rise above an agreement rate. D) none of the options C Q48) In an FRA, the seller agrees to pay the buyer A) the increased interest cost on a notional amount if interest rates fall below an agreement rate.
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B) the increased interest cost if interest rates fall below the agreement rate. C) the increased interest cost on a notional amount if interest rates increase above the agreement rate. D) none of the options B Q49) ABC International has borrowed $4,000,000 at LIBOR plus a lending margin of .65 percent per annum on a three-month rollover basis from Barclays in London. Three month LIBOR is currently 5.5 percent, but ABC is worried about an increase in three-month LIBOR 3 months from now. What could they do to hedge? A) Buy a 3 × 9 FRA in the amount of $4 million. B) Buy a 3 × 6 FRA in the amount of $4 million. C) Sell a 3 × 6 FRA in the amount of $4 million. D) Buy a 3 × 3 FRA in the amount of $4 million. D Q50) Forward rate agreements can be used for speculative purposes. If one believes rates will be less than the agreement rate, A) take a long position in the spot market. B) the purchase of a FRA is the suitable position. C) take a short position in a forward rate agreement. D) the sale of a FRA is the suitable position.
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