Question : Which of the following is not a type of financial instrument used in international trade?
Option 1: Letters of credit
Option 2: Bills of exchange
Option 3: Credit default swaps
Option 4: Bank guarantees
Correct Answer: Credit default swaps
Solution : The correct answer is (c) Credit default swaps
Credit default swaps (CDS) are not typically considered a financial instrument used in international trade. CDS are financial derivatives that allow investors to protect themselves against the risk of default on debt obligations. They are primarily used in financial markets for hedging and speculation purposes, rather than in the context of international trade.
Question : Which of the following is not a type of financial intermediary?
Option 1: Commercial bank
Option 2: Investment bank
Option 3: Stock exchange
Option 4: Central bank
Question : A credit default swap (CDS) is a financial instrument used for:
Option 1: Hedging foreign currency risk
Option 2: Trading commodities futures
Option 3: Insuring against the default of a bond issuer
Option 4: Investing in real estate properties
Question : Which of the following is not a type of international trade?
Option 1: Merchandise trade
Option 2: Services trade
Option 3: Investment trade
Option 4: Capital trade
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile