Chapter 10 International Banking and the Eurocurre...
Exercises
1.Single-choice questions
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2.Essay questions
(1)
A Eurocurrency is any freely convertible currency, such as a dollar or a pound, deposited in a bank outside its country of origin.
(2)
Eurocurrency rates are closely related to the rates in the currency’s home market but,because of lower costs, spreads are lower.
(3)
A Eurocurrency market is a market for the borrowing and lending of Eurocurrency deposits, which is the main part of the international financial market.
(4)
The international financial markets are the markets for cross-border exchange of financial instruments.
The structure of the international financial market can be divided from different angles.
According to the traditional classification, The international financial markets can be divided into international money market, international capital market, International foreign exchange market and International gold market.
Typically, there is a distinction made between international money market and international capital market.International money markets are markets for exchange of financial instruments with maturities of less than one year, while international capital markets are markets for cross-border exchange of financial instruments with maturities of one year or more.
According to the IMF and OEDC classification method, it can be divided into international credit market, international debt security market, international stock market, international financial derivatives market, international foreign exchange market and international gold market.Among them, the international credit market can be divided into bank short-term credit market and bank medium and long-term credit market.
According to the transaction object area and trading currency division, it can be divided into onshore financial market and offshore financial market.