Question : 11) The leading center of Eurocurrency trading is A) New York : 1303698

 

11) The leading center of Eurocurrency trading is

A) New York City.

B) Chicago.

C) London.

D) Paris.

E) Frankfurt.

 

 

12) The Fed’s Regulation Q

A) placed a ceiling on the interest rates U.S. banks could pay on time deposits to foreigners.

B) placed a ceiling on the interest rates U.S. banks could pay on time deposits.

C) placed a ceiling on the amount U.S. residents can deposits in Euro banks.

D) placed a ceiling on the amount foreign residents can deposits in domestic American banks.

E) placed a ceiling on the amount foreign banks can pay on time deposits.

 

13) Which type of main institution in the international capital market most often is involved in foreign exchange intervention?

A) central banks

B) non-bank financial institutions

C) insurance companies

D) corporations

E) commercial banks

 

 

14) The difference between an agency office located abroad and a subsidiary bank located abroad is

A) an agency office is just a home bank in another country while a subsidiary bank is controlled by a foreign bank and subject to the same regulations as local banks.

B) an agency office is just a home bank in another country while a subsidiary bank arranges loans and transfers funds but does not accept deposits.

C) an agency office arranges loans and transfers funds but does not accept deposits while a subsidiary bank is controlled by a foreign bank and subject to the same regulations as local banks.

D) an agency office arranges loans and transfers funds but does not accept deposits while a subsidiary bank is just a home bank in a foreign country.

E) an agency office is controlled by a foreign bank and subject to the same regulations as local banks while a subsidiary bank arranges loans and transfers funds but does not accept deposits.

 

 

15) Besides world trade growth, what can explain the growth of international banking since the 1960s?

A) war in the Middle East

B) government focus on banking regulation.

C) an increase in world travel.

D) the emergence of developing countries like China.

E) desire of depositors to hold currencies outside the jurisdiction of the countries that issue them

 

16) The Eurodollar market’s early growth was stimulated by the Cold War between the United States and U.S.S.R. Why?

A) Soviets feared the U.S. might confiscate dollars place in American banks if conditions of Cold War were to worsen.

B) The United States didn’t feel safe holding as many dollars in American banks.

C) The Cold War did not stimulate the Eurodollar market’s early growth.

D) Developing technologies required larger money transfers than central banks could handle.

E) Soviets developed a new banking system with new allies developed during the tension.

 

 

17) Rising inflationary pressure caused the U.S. to tighten its monetary policy at the end of the 1960s. As a result, market interest rates rose above the Regulation Q ceiling and American banks found it impossible to attract time deposits for re-lending. How did the banks get around this problem?

A) by setting their own interest rates and then using better business as compensation for government regulations

B) by borrowing funds from European branches, which faced no restriction on the interest they could pay on Eurodollar deposits

C) by pushing through new legislation that nullified Regulation Q

D) by creating subsidiary branches in foreign countries

E) by waiting to trade time deposits until Regulation Q no longer applied

 

 

18) What structures make up the international capital markets?

A) stock market, IFM, and the World bank

B) bond market, foreign exchange rates, IFM, and the World bank

C) commercial banks, corporations, non-bank financial institutions, the central banks, and other government agencies

D) commercial banks and corporations

E) the central banks and non-bank financial institutions

 

 

19) What are the types of institution banks used to conduct foreign business?

A) corporations

B) central banks

C) commercial banks

D) agency offices, subsidiary banks, and foreign branches

E) state-owned enterprises

 

20) A business’s use of a bank located outside of the home country is called

A) Swiss banking.

B) offshore banking.

C) international banking.

D) domestic banking.

E) international swapping.