International Banking and Money MarketTrue False Questions.doc

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1、Lecture 7 - International Banking and Money Market11-1 2012 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a

2、 website, in whole or part.Lecture 7 (Chapter 7) International Banking and Money MarketTrue / False Questions1. Edge Act banks are not prohibited from owning equity in business corporations, unlike domestic commercial banks. True False2. An Edge Act bank is typically located in a state different fro

3、m that of its parent in order to get around the prohibition on interstate branch banking. True FalseMultiple Choice Questions3. International banks are different from domestic banks in what way(s)? A. International banks can arrange trade financing. B. International banks can arrange for foreign exc

4、hange transactions. C. International banks can assist their clients in hedging exchange rate risk. D. All of the above4. Major distinguishing features between domestic banks and international banks are A. the types of deposits they accept. B. the types of loans and investments they make. C. membersh

5、ip in loan syndicates. D. all of the above5. Since international banks have the facilities to trade foreign exchange, A. they generally also make a market as a dealer in foreign exchange. B. they generally also make a market as a dealer in foreign exchange derivatives. C. they generally also trade f

6、oreign exchange products for their own account. D. none of the aboveLecture 7 - International Banking and Money Market11-2 2012 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be

7、 copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.6. Banks that both perform traditional commercial banking functions and engage in investment banking activities are often called A. international service banks. B. investment banks. C. commercial banks. D.

8、 merchant banks.7. Merchant banks are different from traditional commercial banks in what way(s)? A. Merchant banks can engage in investment banking activities. B. Merchant banks can arrange for foreign exchange transactions. C. Merchant banks can assist their clients in hedging exchange rate risk.

9、D. All of the above8. By far the most important international finance centers are A. New York and London. B. New York, London, and Tokyo. C. New York, London, Tokyo, Paris, and Zurich. D. New York, London, Tokyo, Paris, Zurich, and Frankfurt.9. Multinational banks are often not subject to the same r

10、egulations as domestic banks. A. There may be increased need to publish adequate financial information. B. There may be reduced need to publish adequate financial information. C. Their requirements to publish adequate financial information are the same. D. None of the above10. A domestic bank that f

11、ollows a multinational client abroad to preserve that banking relationship A. is playing the role of the desperate housewife in this relationship. B. is pursuing a wholesale defensive strategy. C. is pursuing a retail defensive strategy. D. none of the aboveLecture 7 - International Banking and Mone

12、y Market11-3 2012 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.11. A domestic

13、bank that becomes a multinational bank to prevent erosion by foreign banks of the travelers checks, touring, and foreign business market A. is playing the role of the desperate housewife in this relationship. B. is pursuing a wholesale defensive strategy. C. is pursuing a retail defensive strategy.

14、D. none of the above12. Banking tends to be A. a low marginal cost industry. B. a high marginal cost industry. C. a constant average cost industry. D. none of the above13. A U.S.-based multinational bank A. would not have to provide deposit insurance and meet reserve requirements on foreign currency

15、 deposits. B. would have to provide deposit insurance and meet reserve requirements on foreign currency deposits. C. would not have to provide deposit insurance but would have to meet reserve requirements on foreign currency deposits. D. would have to provide deposit insurance but not meet reserve r

16、equirements on foreign currency deposits.14. A bank may establish a multinational operation for the reason of low marginal costs. The underlying rationale being that A. banks follow their multinational customers abroad to prevent the erosion of their clientele to foreign banks seeking to service the

17、 multinationals foreign subsidiaries. B. multinational banking operations help a bank prevent the erosion of its travelers check, tourist, and foreign business markets from foreign bank competition. C. managerial and marketing knowledge developed at home can be used abroad with low marginal costs. D

18、. the foreign bank subsidiary can draw on the parent banks knowledge of personal contacts and credit investigations for use in that foreign market.Lecture 7 - International Banking and Money Market11-4 2012 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use.

19、Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.15. A bank may establish a multinational operation for the reason of knowledge advantage. The underlying rationale being that

20、A. local firms may be able to obtain from a foreign subsidiary bank operating in their country more complete trade and financial market information about the subsidiarys home country than they can obtain from their own domestic banks. B. by maintaining foreign branches and foreign currency balances,

21、 banks may reduce transaction costs and foreign exchange risk on currency conversion if government controls can be circumvented. C. greater stability of earnings is possible with international diversification. Offsetting business and monetary policy cycles across nations reduces the country-specific

22、 risk of any one nation. D. the foreign bank subsidiary can draw on the parent banks knowledge of personal contacts and credit investigations for use in that foreign market.16. A bank may establish a multinational operation for the reason of prestige. The underlying rationale being that A. local fir

23、ms may be able to obtain from a foreign subsidiary bank operating in their country more complete trade and financial market information about the subsidiarys home country than they can obtain from their own domestic banks. B. the foreign bank subsidiary can draw on the parent banks knowledge of pers

24、onal contacts and credit investigations for use in that foreign market. C. very large multinational banks have high perceived prestige, liquidity, and deposit safety that can be used to attract clients abroad. D. multinational banks are often not subject to the same regulations as domestic banks. Th

25、ere may be reduced need to publish adequate financial information, lack of required deposit insurance and reserve requirements on foreign currency deposits, and the absence of territorial restrictions.Lecture 7 - International Banking and Money Market11-5 2012 by McGraw-Hill Education. This is propr

26、ietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.17. A bank may establish a multinational operation for the reason of ris

27、k reduction. The underlying rationale being that A. by maintaining foreign branches and foreign currency balances, banks may reduce transaction costs and foreign exchange risk on currency conversion if government controls can be circumvented. B. greater stability of earnings is possible with interna

28、tional diversification. Offsetting business and monetary policy cycles across nations reduces the country-specific risk of any one nation. C. multinational banks are often not subject to the same regulations as domestic banks. There may be reduced need to publish adequate financial information, lack

29、 of required deposit insurance and reserve requirements on foreign currency deposits, and the absence of territorial restrictions. D. multinational banking operations help a bank prevent the erosion of its travelers check, tourist, and foreign business markets from foreign bank competition.18. A ban

30、k may establish a multinational operation for the reason of regulatory advantage. The underlying rationale being that A. banks follow their multinational customers abroad to prevent the erosion of their clientele to foreign banks seeking to service the multinationals foreign subsidiaries. B. multina

31、tional banking operations help a bank prevent the erosion of its travelers check, tourist, and foreign business markets from foreign bank competition. C. by maintaining foreign branches and foreign currency balances, banks may reduce transaction costs and foreign exchange risk on currency conversion

32、 if government controls can be circumvented. D. multinational banks are often not subject to the same regulations as domestic banks. There may be reduced need to publish adequate financial information, lack of required deposit insurance and reserve requirements on foreign currency deposits, and the

33、absence of territorial restrictions.19. Currently, the biggest bank in the world is A. Citigroup. B. Bank of America. C. UBS. D. The World Bank.Lecture 7 - International Banking and Money Market11-6 2012 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not

34、 authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.20. A bank may establish a multinational operation for the reason of retail defensive strategy. The underlying rationale being th

35、at A. banks follow their multinational customers abroad to prevent the erosion of their clientele to foreign banks seeking to service the multinationals foreign subsidiaries. B. multinational banking operations help a bank prevent the erosion of its travelers check, tourist, and foreign business mar

36、kets from foreign bank competition. C. by maintaining foreign branches and foreign currency balances, banks may reduce transaction costs and foreign exchange risk on currency conversion if government controls can be circumvented. D. multinational banks are often not subject to the same regulations a

37、s domestic banks. There may be reduced need to publish adequate financial information, lack of required deposit insurance and reserve requirements on foreign currency deposits, and the absence of territorial restrictions.21. A bank may establish a multinational operation for the reason of wholesale

38、defensive strategy. The underlying rationale being that A. banks follow their multinational customers abroad to prevent the erosion of their clientele to foreign banks seeking to service the multinationals foreign subsidiaries. B. multinational banking operations help a bank prevent the erosion of i

39、ts travelers check, tourist, and foreign business markets from foreign bank competition. C. by maintaining foreign branches and foreign currency balances, banks may reduce transaction costs and foreign exchange risk on currency conversion if government controls can be circumvented. D. multinational

40、banks are often not subject to the same regulations as domestic banks. There may be reduced need to publish adequate financial information, lack of required deposit insurance and reserve requirements on foreign currency deposits, and the absence of territorial restrictions.22. Which of the following

41、 are reasons why a bank may establish a multinational operation? A. Low marginal and transaction costs B. Home nation information services, and prestige C. Growth and risk reduction D. All of the aboveLecture 7 - International Banking and Money Market11-7 2012 by McGraw-Hill Education. This is propr

42、ietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.23. A bank may establish a multinational operation for the reason of tra

43、nsaction costs. The underlying rationale being that A. banks follow their multinational customers abroad to prevent the erosion of their clientele to foreign banks seeking to service the multinationals foreign subsidiaries. B. multinational banking operations help a bank prevent the erosion of its t

44、ravelers check, tourist, and foreign business markets from foreign bank competition. C. by maintaining foreign branches and foreign currency balances, banks may reduce transaction costs and foreign exchange risk on currency conversion if government controls can be circumvented. D. multinational bank

45、s are often not subject to the same regulations as domestic banks. There may be reduced need to publish adequate financial information, lack of required deposit insurance and reserve requirements on foreign currency deposits, and the absence of territorial restrictions.24. A bank may establish a mul

46、tinational operation for the reason of growth. The rationale being that A. growth prospects in a home nation may be limited by a market largely saturated with the services offered by domestic banks. B. multinational banks are often not subject to the same regulations as domestic banks. There may be

47、reduced need to publish adequate financial information, lack of required deposit insurance and reserve requirements on foreign currency deposits, and the absence of territorial restrictions. C. greater stability of earnings is possible with international diversification. Offsetting business and mone

48、tary policy cycles across nations reduces the country-specific risk of any one nation. D. by maintaining foreign branches and foreign currency balances, banks may reduce transaction costs and foreign exchange risk on currency conversion if government controls can be circumvented.Lecture 7 - Internat

49、ional Banking and Money Market11-8 2012 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.25. A bank may establish a multinational operation for the reason of home country information services. The underlying rationale being that