Reading 68: Forward Markets and Contracts LOSe习题精选 2010, statements, following, regarding

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LOS e: Describe the characteristics of the Eurodollar time deposit market and define LIBOR and Euribor.

Which of the following statements regarding Eurodollar time deposits is FALSE?

A) Sometimes the best rates are available in New York City.

B) Rates are quoted as an add-on yield.

C) They are available in Switzerland.

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Eurodollar time deposits are U.S. dollar denominated deposits outside the United States. Rates are quoted as an annualized add-on yield, based on a 360-day year.

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Which of the following statements regarding Eurodollar time deposits is FALSE?

A) Rates are quoted as an add-on yield.

B) They are available in Switzerland.

C) Sometimes the best rates are available in New York City.

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Eurodollar time deposits are U.S. dollar denominated deposits outside the United States. Rates are quoted as an annualized add-on yield, based on a 360-day year.

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Eurodollar time deposits are:

A) priced at a discount.

B) actively traded in the secondary market.

C) denominated in U.S. dollars (USD).

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Eurodollar time deposits are USD denominated deposits with large banks outside the U.S. They are usually short term and not traded in a secondary market.

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Which of the following statements regarding Eurodollar time deposits is FALSE?

A) USD denominated deposits in large banks in Tokyo are Eurodollar accounts.

B) U.S. dollar (USD) denominated deposits at large banks in London are Eurodollar accounts.

C) Euro denominated deposits at large banks in the U.S. are Eurodollar accounts.

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Eurodollar deposits are USD denominated deposits in large banks held outside the United States. By convention, the rates are quoted as an add-on yield. Following this convention, euro-denominated deposits held outside of the euro-block countries would be “Euroeuro” deposits.

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Which of the following is least likely a characteristic of London Interbank Offered Rate (LIBOR)?

A) Set by the European Central Bank.

B) Adjusted daily.

C) Paid on loans denominated in U.S. dollars.

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LIBOR is published by the British Bankers Association based upon quotes from a number of large banks. The rate is determined on a daily basis. LIBOR can apply to loans in U.S. dollars, as well as a variety of other major currencies.

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If the U.S. discount rate is 2.5% and the London Interbank Offered Rate (LIBOR) is +7.5%, the add-on interest that must be paid on a 60-day, $250 million loan is closest to:

A) $4.17 million.

B) $3.08 million.

C) $3.13 million.

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Add-on interest = LIBOR × (60/360) × $250 million
Interest = 7.5% × (1/6) × $250 million = $3.125 million

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Euribor is:

A) the same as EuroLIBOR.

B) published by the European Central Bank.

C) the rate on U.S. dollar deposits in continental Europe.

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Euribor is the interbank lending rate for Euro denominated loans, published by the European Central Bank, and compiled in Frankfurt.

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Euribor is:

A) the same as EuroLIBOR.

B) published by the European Central Bank.

C) the rate on U.S. dollar deposits in continental Europe.

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Euribor is the interbank lending rate for Euro denominated loans, published by the European Central Bank, and compiled in Frankfurt.

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The offer rate on U.S. dollar (USD) denominated loans between large banks in London is called:

A) Eurobor.

B) London Interbank Offered Rate (LIBOR).

C) the Exchequer rate.

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The rate on USD denominated loans between large banks in London is the LIBOR.