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International Finance - 3

LIST OF ATTEMPTED QUESTIONS AND ANSWERS


True/False
Question
Integrated branches of Commercial banks handle forex transactions as well as options,
swaps, futures, arbitrage operations
Correct Answer
True
Your Answer
True

True/False
Question
JV means Joint venture and WOS means World of Security.
Correct Answer
False
Your Answer
False

Select The Blank


Question
The rate of interest on rupee finance for exports is not exceeding ________ less than
PLR.
Correct Answer
0.025
Your Answer
50 basis points over LIBOR

Multiple Choice Multiple Answer


Question
What does a speculator accept while dealing with an option?
Correct Answer
The exercise or strike price, the amount , The expiration date and time, the method of
payment
Your Answer
The exercise or strike price, the amount , The expiration date and time, the method of
payment

Multiple Choice Single Answer


Question
In the syndicated loan arrangement the borrower has to execute :-
Correct Answer
Single Principal loan agreement
Your Answer
Single Principal loan agreement
True/False
Question
At Least one principal Lender bank is essential for issue of the ADR or GDR.
Correct Answer
False
Your Answer
True

Multiple Choice Single Answer


Question
US financial system is the freest system because
Correct Answer
Institutions can introduce new products and instuments at the price of their choice.
Your Answer
Institutions can introduce new products and instuments at the price of their choice.

Multiple Choice Single Answer


Question
In a coupon swap who is called the buyer?
Correct Answer
One who pays the fixed rate of interest
Your Answer
One who pays the fixed rate of interest

True/False
Question
Till August 1994 India was following the Indirect Methodof Rate quotation.
Correct Answer
False
Your Answer
False

Select The Blank


Question
For setting up joint ventures abroad or equity participation abroad, EXIM bank provides
funds under ________ Scheme.
Correct Answer
Overseas investment facility
Your Answer
Overseas investment facility

Multiple Choice Single Answer


Question
Under the automatic route of Direct Investment Abroad, what is the restriction on market
purchases?
Correct Answer
50% of the net worth of the investing company
Your Answer
50% of the net worth of the investing company

Multiple Choice Single Answer


Question
What are the powers of money changers?
Correct Answer
Purchase and sell foreign currency notes and travellers cheques
Your Answer
Purchase and sell foreign currency notes and travellers cheques and also Give export
finance

Select The Blank


Question
Any company involved in foreign exchange transactions is exposed to ________ risk.
Correct Answer
Currency
Your Answer
Currency

Multiple Choice Multiple Answer


Question
What are the features of Settlement price ?
Correct Answer
Price established by the clearing house at the end of each trading session , It is used to
determine the net gain, loss, margin call and next days price limits
Your Answer
Price established by the clearing house at the end of each trading session , It is used to
determine the net gain, loss, margin call and next days price limits

Multiple Choice Multiple Answer


Question
What are the activities of ICC?
Correct Answer
Aribtration and dispute resolving , Canvass for open trade combat commercial crime
Your Answer
Aribtration and dispute resolving , Canvass for open trade combat commercial crime ,
Increased Govt regulation of Business

True/False
Question
Cause of increase in cost of public issues Underwriting fees , selling commission
Correct Answer
True
Your Answer
False

Select The Blank


Question
The currency swaps used ________.
Correct Answer
To lower the risk of currency exposure
Your Answer
To lower the risk of currency exposure

True/False
Question
The Option period in the forward contract is at the option of the Banker, hence the bank
has to be very conservative in quoting rates.
Correct Answer
False
Your Answer
True

Multiple Choice Multiple Answer


Question
Which factors affect the exchange rates in short time period?
Correct Answer
Demand and supply, interest rates, inflation, , Sentiment, Speculation
Your Answer
Demand and supply, interest rates, inflation, , Sentiment, Speculation , GDP,Balance of
trade and payment,Unemployment

Match The Following


Question
Correct Answer
Your Answer
Departure
EXW
EXW
Main carriage paid
CFR
CFR
Main carriage unpaid
FAS
FAS
Arrival
DES
DES

Multiple Choice Multiple Answer


Question
Sterling Market is attractive for an international investor because
Correct Answer
Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds
Your Answer
Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds
, Linking of issues to currency swaps

True/False
Question
In red clause credit some clauses are printed in Red ink.
Correct Answer
True
Your Answer
False

Multiple Choice Multiple Answer


Question
Which debits are permitted to EEFC accounts?
Correct Answer
Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment
to EOUs in India for services rendered by them
Your Answer
Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment
to EOUs in India for services rendered by them

Multiple Choice Single Answer


Question
Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is
the bid rate for USD?
Correct Answer
USD 1=Rs 50.5000
Your Answer
USD 1=Rs 50.5000

Multiple Choice Single Answer


Question
Why are various methods of financial analysis used for assessing a cross border project ?
Correct Answer
To weed out unviable projects and rank profitable ones
Your Answer
To weed out unviable projects and rank profitable ones

Multiple Choice Multiple Answer


Question
Criteria for investment abroad under automatic route :-
Correct Answer
Activity for investment is core activity of Indian Company. , Total Financial commitment
in JV/WOS as per prescribed ceiling
Your Answer
Activity for investment is core activity of Indian Company. , Total Financial commitment
in JV/WOS as per prescribed ceiling

Multiple Choice Multiple Answer


Question
Who can issue the Certificate of Inspection?
Correct Answer
Export Inspection Council , Person authorised by Importer.
Your Answer
Export Inspection Council , Person authorised by Importer.

Multiple Choice Single Answer


Question
Large number of exporters from which country are enjoying the privilege of receiving up
front cash from importers in Russia?
Correct Answer
United Kingdom
Your Answer
United Kingdom

True/False
Question
In developed markets, speculators play important role in determining the trend of
currency rates.
Correct Answer
True
Your Answer
True

Select The Blank


Question
In US Capital Market a Company prepares all the necessary documents in advance of the
public issue under the facility known as ________.
Correct Answer
Shelf Registration
Your Answer
Shelf Registration

Select The Blank


Question
In Overseas market the forward rate is generally quoted on the basis of ________.
Correct Answer
Fixed date
Your Answer
Calendar month

Select The Blank


Question
Forward Margin makes a currency costlier then the currency is at ________.
Correct Answer
Premium
Your Answer
Discount

Multiple Choice Multiple Answer


Question
These are the parties to the documentary credit :-
Correct Answer
Negotiating Bank, advising bank , Reimbursing bank, Confirming bank
Your Answer
Negotiating Bank, advising bank , Reimbursing bank, Confirming bank

Multiple Choice Multiple Answer


Question
What are the functions of Asian Development Bank?
Correct Answer
Give Softloans to poorer countries in Asia , Give project finance from resources raised in
world capital market
Your Answer
Give Softloans to poorer countries in Asia , Give project finance from resources raised in
world capital market

Multiple Choice Single Answer


Question
Fixed, Floating or Limited flexibility are used in the context of
Correct Answer
Exchange Rates
Your Answer
Exchange Rates

Select The Blank


Question
In mid 1992 ________ rejected the ratification of Maastricht treaty
Correct Answer
Denmark
Your Answer
UK
Multiple Choice Multiple Answer
Question
Under the liberalisation through FEMA, what can an AD offer to the clients, without the
prior permission of RBI or Government?
Correct Answer
Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate
agreements
Your Answer
Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate
agreements

Multiple Choice Single Answer


Question
To whom is an AD required to report the cancellation of forward contracts?
Correct Answer
No one at all.
Your Answer
To Reserve Bank of India, fortnightly

Select The Blank


Question
ECGC provides cover to an Indian contractor for construction work abroad under
________.
Correct Answer
Construction works policy
Your Answer
Export Performance Guarantee

True/False
Question
The Negotiating bank examines the documents submitted by the seller and makes
payment if they comply the terms and conditions of the LC.
Correct Answer
True
Your Answer
True

Multiple Choice Single Answer


Question
What was the official foreign currency reserve of the group of seven central Banks taken
togeather in mid 1992?
Correct Answer
USD 275 Billion
Your Answer
USD 275 Billion
Multiple Choice Multiple Answer
Question
What are the sources of raising funds for exports?
Correct Answer
Suppliers credit , Forfaiting
Your Answer
Suppliers credit , Forfaiting

Select The Blank


Question
Forward margin makes a currency cheaper then the currency is at ________.
Correct Answer
Discount
Your Answer
Discount

Multiple Choice Single Answer


Question
Name the common forex derivatives :-
Correct Answer
Options, futures
Your Answer
Options, futures

True/False
Question
Country risk analysis is a futile exercise in the background of cost of analysis.
Correct Answer
True
Your Answer
False

Select The Blank


Question
Even after liberalisation of exchange controls, the Euro sterling market remained volatile
because of uncertainties in UK and gyrations of sterling against major ________
countries
Correct Answer
OECD
Your Answer
OECD

Match The Following


Question
Correct Answer
Your Answer
Issues linked with LIBOR,LIBID,LIMEAN
FRNs
FRNs
Issue of bonds without fixed rate of interest, linked to short term interest rate in the global
market
FloatingRate Note
FloatingRate Note
Issue of loans internationally,through arranger, underwriter,co manager, for a large
amount for sharing risk of lending
Syndicated Loans
Syndicated Loans
Equity issues in the foreign markets either as direct investments or portfolio investments.
American or Global Depository Receipts
American or Global Depository Receipts

at 5:35 AM 0 comments Links to this post

Labels: International Finance

International Finance - 2
Multiple Choice Multiple Answer
Question
What schemes have been floated by RBI for facilitating Inter bank transactions?
Correct Answer
Clearing house for settlement and clearance for the operations of Ads , Set up a market
intelligence cell to study and monitor developments in Forex Market
Your Answer
Clearing house for settlement and clearance for the operations of Ads , Make additional
foreign currency available to ADs at cheaper rates

Select The Blank


Question
________ is the agency of ICC which deals with the maritime crime.
Correct Answer
International Maritime Bureau
Your Answer
International Maritime Bureau

Multiple Choice Single Answer


Question
Which of them are special funding facilities of IMF ?
Correct Answer
Buffer Stock Facility
Your Answer
Buffer Stock Facility
True/False
Question
Cross currency forward contract is not meaningful if original contract is in Rupees to
USD
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer


Question
What does a speculator accept while dealing with an option?
Correct Answer
The exercise or strike price, the amount , The expiration date and time, the method of
payment
Your Answer
The exercise or strike price, the amount , The expiration date and time, the method of
payment , The Market report of the exchange which trades the option

Multiple Choice Single Answer


Question
Which is the most actively traded currency in the international market today?
Correct Answer
US Dollar
Your Answer
US Dollar

Match The Following


Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Factors' values
Weightages %
Factors' values
100% of total

Select The Blank


Question
Global capital market can be understood from the study of ________.
Correct Answer
Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the
country
Your Answer
Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the
country

Multiple Choice Single Answer


Question
For a spot transaction carried out on Thursday, currencies will be exchanged on :-
Correct Answer
Monday
Your Answer
Monday

Multiple Choice Single Answer


Question
Under which category of exchange rate did the Indian Rupee came from June 92?
Correct Answer
Other managed Floating
Your Answer
Pegged to Single currency

Match The Following


Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity is delivered
Last date of exercising option
Note issuance facility
Euronotes
Euronotes
Bearer security issued in currency other than that of the country of issue
Eurobonds
Eurobonds
Margin on future
Peformance bond or security deposit
Peformance bond or security deposit

True/False
Question
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument.
Correct Answer
False
Your Answer
False

True/False
Question
The Prominent non banking financial institutions participating in the FOREX markets are
Pension funds, mutual funds, insurance Cos.
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer


Question
What are margins, with reference to futures market?
Correct Answer
Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency
for honouring contracts
Your Answer
Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency
for honouring contracts

Multiple Choice Single Answer


Question
What is the volume of the world's average daily transactions in foreign exchange?
Correct Answer
USD 1 trillion
Your Answer
USD 1 trillion

Multiple Choice Single Answer


Question
NIF is basically an agreement :-
Correct Answer
By underwriting bank to support funding for a certain period, against which borrowers
can issue short term papers
Your Answer
Which enables the investor to market the same in the secondary market

Multiple Choice Single Answer


Question
What was the official foreign currency reserve of the group of seven central Banks taken
togeather in mid 1992?
Correct Answer
USD 275 Billion
Your Answer
USD 275 Billion

Multiple Choice Single Answer


Question
What Preshipment facility is granted by EXIM Bank to an exporter?
Correct Answer
Preshipment credit beyond six months for construction and turnkey projects abroad
Your Answer
Preshipment credit up to six months for construction and turnkey projects abroad

Select The Blank


Question
Over the years ________has been the most widely accepted currency in international
capital market.
Correct Answer
American Dollar
Your Answer
American Dollar

Select The Blank


Question
As a result of the world wars in the 20th century the ________ of most of the countries
suffered heavily.
Correct Answer
Economies
Your Answer
Currencies

Multiple Choice Single Answer


Question
Which currency is traded in one leg of about 70% of the world's transactions?
Correct Answer
US Dollar
Your Answer
US Dollar

Select The Blank


Question
________ is the acid test for events to be included in country risk.
Correct Answer
Control by Government'
Your Answer
Recurrence

Select The Blank


Question
The Trans European Automated Real Time Gross Settlement Express Transfer is popular
in ________.
Correct Answer
Brussels
Your Answer
Brussels

Multiple Choice Single Answer


Question
What is Risk Syndication facility?
Correct Answer
Sharing of risk of non payment by supplier
Your Answer
Sharing risk of Non payment by the Syndicate of Banks giving loans

True/False
Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer


Question
The characteristics of an International documentary credit are :-
Correct Answer
It is an undertaking given by the openers bank to pay certain sum of money , It is an
undertaking given on behalf of a certain person to another person in different country
Your Answer
It is an undertaking given by the openers bank to pay certain sum of money , It is an
undertaking given on behalf of a certain person to another person in different country

Multiple Choice Multiple Answer


Question
Which debits are permitted to EEFC accounts?
Correct Answer
Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment
to EOUs in India for services rendered by them
Your Answer
Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment
to EOUs in India for services rendered by them

True/False
Question
Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer
True
Your Answer
True

True/False
Question
There is no difference between CIP and CIF contracts except the mode of transportation.
Correct Answer
True
Your Answer
True

Multiple Choice Single Answer


Question
Financial management is complex process for
Correct Answer
Companies which have international trade
Your Answer
Companies which have international trade

Select The Blank


Question
When an Indian Company earns at least 50% of its average turnover from a particular
activity then that activity is considered as ________.
Correct Answer
Core activity
Your Answer
Primary activity

Select The Blank


Question
A Credit can be a confirmed credit only if it is also ________.
Correct Answer
An Irrevocable credit
Your Answer
An Irrevocable credit

True/False
Question
The volume of trading of Derivatives in the world trade market is growing but still only
5% of the total.
Correct Answer
False
Your Answer
False

Multiple Choice Single Answer


Question
Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is
the offered rate for Rs?
Correct Answer
USD 1=Rs 50.5000
Your Answer
USD 1=Rs 50.5000

Multiple Choice Multiple Answer


Question
Export finance
Correct Answer
Preshipment credit , Post shipment credit , Duty Draw back
Your Answer
Preshipment credit , Post shipment credit , Buyers credit

Multiple Choice Multiple Answer


Question
Internationally only those currencies are in demand
Correct Answer
Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer
Which are convertible , Which have liquidity confirmed in Euro market operations ,
Which have greater intrinsic value

Multiple Choice Multiple Answer


Question
What are the functions of Asian Development Bank?
Correct Answer
Give Softloans to poorer countries in Asia , Give project finance from resources raised in
world capital market
Your Answer
Give Softloans to poorer countries in Asia , Give project finance from resources raised in
world capital market

Multiple Choice Multiple Answer


Question
What does the word '"Tombstone" stand for?
Correct Answer
Advertisement which lists the managers, underwriters, , List of Providers of recently
floated issue
Your Answer
Advertisement which lists the managers, underwriters, , List of Providers of recently
floated issue

Select The Blank


Question
Short term instruments normally issued by corporate borrowers, forhigh values, at a
discount to face value are known as ________.
Correct Answer
Euro Commercial Papers
Your Answer
Euro Commercial Papers

Multiple Choice Single Answer


Question
Why are various methods of financial analysis used for assessing a cross border project ?
Correct Answer
To weed out unviable projects and rank profitable ones
Your Answer
To weed out unviable projects and rank profitable ones

Multiple Choice Single Answer


Question
Examples of hedge are:
Correct Answer
Buy when you are having short position
Your Answer
Buy when you are having short position

Multiple Choice Multiple Answer


Question
What is the effect of cross currency option on the customer?
Correct Answer
He gets the flexibility to exposure , He is exposed to additional risk of movement of rates
between 3 currencies
Your Answer
He gets the flexibility to exposure , He is exposed to additional risk of movement of rates
between 3 currencies

Select The Blank


Question
Forward margin makes a currency cheaper then the currency is at ________.
Correct Answer
Discount
Your Answer
Discount
Multiple Choice Single Answer
Question
Why does a person need protection from unfavourable movement of exchange rate?
Correct Answer
Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Your Answer
Unfavourable fluctuations in exchange rate can wipe out the normal business profit

Multiple Choice Single Answer


Question
The capital market is said to be volatile when
Correct Answer
Prices of capital market instruments change and are expected to change drastically
Your Answer
Prices of capital market instruments change and are expected to change drastically

True/False
Question
JV means Joint venture and WOS means World of Security.
Correct Answer
False
Your Answer
False

Multiple Choice Multiple Answer


Question
What is the criteria for an Indian Company for Direct Investment abroad?
Correct Answer
Activity proposed need to be core activity , Financial commitment in JV/WOS maximum
$ 100 million or equivalent
Your Answer
Activity proposed need to be core activity , Financial commitment in JV/WOS maximum
$ 100 million or equivalent , Indian co should not have been black listed

at 5:33 AM 0 comments Links to this post

Labels: International Finance

Friday, January 25, 2008


International Finance - 1
Multiple Choice Multiple Answer

Question
What are the categories of exposures, a person faces in International trade?
Correct Answer
Transaction exposure , Translation exposure

Your Answer
Transaction exposure , Exchange rate fluctuation , Political changes

Multiple Choice Multiple Answer

Question
The factors which affect the performance of an option are:-

Correct Answer
Underlying asset price , Time before expiration, rate of interest

Your Answer
Underlying asset price , Time before expiration, rate of interest

Select The Blank

Question
The option which can be exercised on the maturity date and not before it is known
as________.

Correct Answer
European Option

Your Answer
European Option

Multiple Choice Single Answer

Question
What are the powers of restricted money changers?
Correct Answer
Purchase foreign currencies

Your Answer
Purchase and sell foreign currency notes and travellers cheques

Multiple Choice Multiple Answer

Question
Which contracts are used for transportation by road?
Correct Answer
FCA , CPT

Your Answer
FCA , CPT

 Multiple Choice Multiple Answer

  Question Â
The World Bank Group Consists of

  Correct Answer Â
International Development Association , International finance Corporation ,
Multinational Investment Guarantee Agency

 True/False

  Question Â
Naked position is when investor does not hedge against market risk.

  Correct Answer Â
True

  Your Answer Â
TRUE

 Multiple Choice Multiple Answer

  Question Â
In DAF, the frontier means :-

  Correct Answer Â
Frontier of exporter's country , Frontier of importer's country

 Multiple Choice Single Answer

  Question Â
Which type of Convertibility of Rupee launched in March 1992 ?

  Correct Answer Â
Limited convertibility

  Your Answer Â
Convertibility on current account
 Multiple Choice Single Answer

  Question Â
What was the reason for launching swap as an risk hedging instrument?

  Correct Answer Â
To avoid the effects of currency control imposed in UK

  Your Answer Â
To avoid the effects of currency control imposed in UK

 Multiple Choice Single Answer

  Question Â
Equity can be raised internationallly by a company through :-

  Correct Answer Â
Fund raising, underwriting, hedging , arbitration operations

  Your Answer Â
Floating debt instruments

 True/False

  Question Â
In forward sales, the delivery refers to actual cash flows on due date.

  Correct Answer Â
True

 Select The Blank

  Question Â
Any company involved in foreign exchange transactions is exposed to ________ risk.

  Correct Answer Â
Currency

  Your Answer Â
Payment

 True/False
  Question Â
An AD can book a forward contract for a part of the amount of Sale Contract

  Correct Answer Â
True

 Multiple Choice Single Answer

  Question Â
Why does a person need protection from unfavourable movement of exchange rate?

  Correct Answer Â
Unfavourable fluctuations in exchange rate can wipe out the normal business profit

  Your Answer Â
He wants to make profit

 Match The Following

Question
Correct Answer
Your Answer

Merchant banking
Portfolio management
Portfolio management

Securitization
Issue of debt in the form of tradeable security
Issue of debt in the form of tradeable security

Prime borrower
Highest credit rating
Highest credit rating

Traditional banking service


Loans and cash credit against security
Loans and cash credit against security

 Multiple Choice Multiple Answer

  Question Â
What are the activities of ICC?

  Correct Answer Â
Aribtration and dispute resolving , Canvass for open trade combat commercial crime

  Your Answer Â
Aribtration and dispute resolving , Canvass for open trade combat commercial crime

 Multiple Choice Multiple Answer

  Question Â
Which factors influence the valuation of cash flows?

  Correct Answer Â
Incomplete capital market , Availability of projkect specific concessional finance,

  Your Answer Â
Incomplete capital market , Rates of inflation, , volatility of exchange rates

 Multiple Choice Multiple Answer

  Question Â
What is the objective of FEDAI?

  Correct Answer Â
Laying down terms and conditions of exchange business between Customers and Bankers
, Interbank understanding for transacting forex business and exchange rates

  Your Answer Â
Laying down terms and conditions of exchange business between Customers and Bankers
, Growth of Indian Exports , Ensure the profitability of Forex business to the banks

Â>Select The Blank

  Question Â
Forward margin makes a currency cheaper then the currency is at ________.
  Correct Answer Â
Discount
  Your Answer Â
PAR

Â
 Match The Following

Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Cost of evluation does not justify analysis

Country risk analysis


Cost of evluation does not justify analysis
Continue the project

Stock market analysis


Banks are ahead
Banks are ahead

Weightages %
Factors' values
Factors' values

 Multiple Choice Single Answer

  Question Â
A bill of exchange issued by a bank which pays specified sum of money to the holder on
a specific date is called :-

  Correct Answer Â
Bankers' Acceptance Bond

  Your Answer Â
Usance Bill of Exchange

 Multiple Choice Single Answer

  Question Â
In the syndicated loan arrangement the borrower has to execute :-

  Correct Answer Â
Single Principal loan agreement

  Your Answer Â
Single Principal loan agreement

 Select The Blank

  Question Â
Rupee was liberalised on ________ account in 1993, and on current account in 1994.

  Correct Answer Â
Trade
  Your Answer Â
Capital

 Select The Blank

  Question Â
Indian Co. intending to make investment under Automatic route needs to submit form
________ to RBI with enclosures.

  Correct Answer Â
ODA

  Your Answer Â
ODA

 Multiple Choice Multiple Answer

  Question Â
A Forward purchase contract was booked with an authorised dealer and subsequently
cancelled .It :-

  Correct Answer Â
Can be booked again with another dealer , Can be booked again with the same dealer

  Your Answer Â
Can be booked again with another dealer , Can be booked again with the same dealer ,
Can be booked only for un booked portion of the contract.

Select The Blank

Question
The ________is a Floating rate index for swaps.

Correct Answer
US Commercial paper rate

Your Answer
US Commercial paper rate
International Finance - 5
Multiple Choice Multiple Answer
Question
What facilities are proposed by Sodhani Committee for NRIs?
Correct Answer
Housing Loan to NRI staff of Indian Companies, , NRIs be permitted to invest in MMMF
Your Answer
Housing Loan to NRI staff of Indian Companies, , NRIs be permitted to invest in MMMF
Multiple Choice Single Answer
Question
In whose name is the straight bill of lading issued?
Correct Answer
The Consignee
Your Answer
The consignor

Multiple Choice Single Answer


Question
How does ECGC promote export in India?
Correct Answer
By covering risk of exporting on credit
Your Answer
By covering risk of exporting on credit
Multiple Choice Single Answer
Question
Documents which satisfy the statutory requirements of any trade and regulatory aurhotiry
are known as:-
Correct Answer
Regulatory Documents
Your Answer
Regulatory Documents
Select The Blank
Question
________ of India has granted line of credit to African countries for financing export of
Capital goods.
Correct Answer
EXIM Bank
Your Answer
EXIM Bank
Multiple Choice Multiple Answer
Question
Underwriters are more attracted to NIF issue because of :-
Correct Answer
Lesser risks , Increased returns , Easy marketability features
Your Answer
Lesser risks , Increased returns , Easy marketability features
Multiple Choice Single Answer
Question
Name the single most important factor which may devastate the economic viability of an
operation in international trade :-
Correct Answer
Unfavourable fluctuation in the exchange rate
Your Answer
Unfavourable fluctuation in the exchange rate
Multiple Choice Multiple Answer
Question
Which document is used for transportation by air, rail, road, marine?
Correct Answer
Multimodal transport document , Combined Transport document
Your Answer
Multimodal transport document , Combined Transport document
Multiple Choice Single Answer
Question
In which of the funding facilities the repayment period is between 3 to 5 years ?
Correct Answer
C.C.F.F.
Your Answer
C.C.F.F.
Select The Blank
Question
Association of several scheduled commercial banks for forex business is ________.
Correct Answer
Foreign Exchange Dealers Association of India
Your Answer
Foreign Exchange Dealers Association of India
True/False
Question
The credit rating of World Bank is high in the world Capital market because it operates at
the debt equity ratio of 1:2
Correct Answer
False
Your Answer
True
Select The Blank
Question
In Overseas market the forward rate is generally quoted on the basis of ________.
Correct Answer
Fixed date
Your Answer
Calendar fortnight
Multiple Choice Single Answer
Question
Proforma Invoice, Commercial Invoice, Consaular Invoice are which type of documents?
Correct Answer
Commercial Documents
Your Answer
Regulatory Documents
Multiple Choice Single Answer
Question
How many terms are there under the class " main carriage unpaid"?
Correct Answer
Three
Your Answer
Two

Multiple Choice Single Answer


Question
Examples of hedge are:
Correct Answer
Buy when you are having short position
Your Answer
Buy when you are having short position
Multiple Choice Single Answer
Question
As per article IV of IMF for fixed exchange rates member countries agreed to
Correct Answer
Change exchange rates only for correcting fundamental disequilibrium in external
payments with IMF approval
Your Answer
Change exchange rates only for correcting fundamental disequilibrium in external
payments with IMF approval
Multiple Choice Single Answer
Question
As per article IV of IMF for fixed exchange rates member countries agreed to
Correct Answer
Change exchange rates only for correcting fundamental disequilibrium in external
payments with IMF approval
Your Answer
Change exchange rates only for correcting fundamental disequilibrium in external
payments with IMF approval
Multiple Choice Single Answer
Question
In International trade, Advance payment means :-
Correct Answer
Providing up front cash
Your Answer
Sending documentary credits
Multiple Choice Single Answer
Question
In case of International trade, the role of a banker in case of a bill for collection is that
of :-
Correct Answer
Routing the documents of transport along with other documents and apply the proceeds
as per instructions
Your Answer
Routing the documents of transport along with other documents and apply the proceeds
as per instructions
Match The Following

Question
Correct Answer
Your Answer

European option
On or after maturity

Out of money
Loss
On or after maturity

In the money
Profit
Before maturity

American option
Before maturity

Select The Blank

Question
QA request for additional ________ funds from a customer in a margin call.

Correct Answer
Margin

Your Answer
Liquid

Multiple Choice Multiple Answer

Question
How does RBI control Exports?

Correct Answer
Through Rule like "Full value of Export bills must be realised in 180 days," , Through
Rule like " Export must be denominated In a currency of the Importing country or a
freely convertible currency"

Your Answer
Through Rule like "Full value of Export bills must be realised in 180 days," , Through
Rule like " Export must be denominated In a currency of the Importing country or a
freely convertible currency"

Select The Blank

Question
A Bill of exchange payable 45 days from date of shipment, is a means of ________ from
seller to the buyer.

Correct Answer
Credit

Your Answer
Credit

Question
The large flow of money internationally was caused primarily by the oil price hikes
engineered by ________.

Correct Answer
OPEC countries

Your Answer
OPEC countries

Multiple Choice Single Answer

Question
Who books an option forward contract?

Correct Answer
Party who is not definite about crystallisation of delivery date

Your Answer
Party who is not definite about crystallisation of delivery date

Multiple Choice Multiple Answer


Question
What is a 'speculator'?

Correct Answer
Trader who is neither hedger nor arbitragor , He takes risks for profit

Your Answer
Trader who is neither hedger nor arbitragor , He takes risks for profit

Multiple Choice Single Answer

Question
Who arranges for Insurance and transportation under EXW contract?

Correct Answer
Buyer arranges and pays

Your Answer
Buyer arranges and pays

True/False

Question
Phytosanitary/ Radiation/Fumigation certificates are in the category of Health Certificates

Correct Answer
True

Your Answer
True

True/False

Question
If ERD > IRD hen exporter should availa Rupee finance

Correct Answer
True

Your Answer
False

Select The Blank

Question
In ________ transaction the delivery is postponed from the agreed date.

Correct Answer
Rollover

Your Answer
Forward

Multiple Choice Single Answer

Question
Exchange Rate means

Correct Answer
Value of one currency in terms of another

Your Answer
Value of one currency in terms of another

Match The Following

Question
Correct Answer
Your Answer

Merchant banking
Portfolio management
Highest credit rating

Securitization
Issue of debt in the form of tradeable security
Loans and cash credit against security

Prime borrower
Highest credit rating
Note issuing and underwrting facility

Traditional banking service


Loans and cash credit against security
Issue of debt in the form of tradeable security

Select The Blank

Question
The price at which a person may purchase or sell the underlying ________.
Correct Answer
Exercise or strike price

Your Answer
Coupon

Multiple Choice Single Answer

Question
Who introduced the worlds first exchange traded currency futures?

Correct Answer
Chicago Mercantile Exchange

Your Answer
Bretton woods Agreement

True/False

Question
In UK in london Market the Indirect Quote Method is still adopted.

Correct Answer
True

Your Answer
True

True/False

Question
The Euro Commercial paper is supported by a team-syndicated credit with both sides of
the transaction combined into one operation.

Correct Answer
True

Your Answer
False

at 5:54 AM 0 comments Links to this post

Labels: International Finance (Set - II)

International Finance - 4
LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Select The Blank


Question
The currency swaps used ________.
Correct Answer
To lower the risk of currency exposure
Your Answer
To lower the risk of currency exposure

Multiple Choice Single Answer


Question
Various exchange rate mechanisms are basically used for
Correct Answer
Correcting currency disequilibrium
Your Answer
Correcting currency disequilibrium

True/False
Question
The volume of trading of Derivatives in the world trade market is growing but still only
5% of the total.
Correct Answer
False
Your Answer
False

Select The Blank


Question
In US Capital Market a Company prepares all the necessary documents in advance of the
public issue under the facility known as ________.
Correct Answer
Shelf Registration
Your Answer
Shelf Registration

Match The Following


Question
Correct Answer
Your Answer
Swap price
Difference in prices of two legs of buying and selling
Difference in prices of two legs of buying and selling
Euro Market
Market in Euro currencies
Market in Euro currencies
Making market
Quoting rate for both buying and selling a currency
Quoting rate for both buying and selling a currency
Spread
Price difference between bid and offer
Price difference between bid and offer

True/False
Question
Floating rate notes are traded in secondary market also.
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer


Question
In which cases can a Resident Individual in India acquire foreign securities without prior
approval?
Correct Answer
Gift from a person outside India, or Inheritance from a person resident in or outside
India , Security issued under Cashless employees stock option scheme
Your Answer
Gift from a person outside India, or Inheritance from a person resident in or outside
India , Security issued under Cashless employees stock option scheme , Purchase from
borrowings from Authorised dealers

Multiple Choice Multiple Answer


Question
What schemes have been floated by RBI for facilitating Inter bank transactions?
Correct Answer
Clearing house for settlement and clearance for the operations of Ads , Set up a market
intelligence cell to study and monitor developments in Forex Market
Your Answer
Clearing house for settlement and clearance for the operations of Ads , Set up a market
intelligence cell to study and monitor developments in Forex Market , Purchase excess
foreign curency from Ads at higher rates

Multiple Choice Multiple Answer


Question
Why does a Transaction exposure arise?
Correct Answer
Trading flows , Dividend or capital flows
Your Answer
Trading flows , Valuation of assets and liabilities abroad in financial statements , Present
value of future transaction abroad

Select The Blank


Question
A Documentary credit issued on the strength of another documentary credit is known as
________.
Correct Answer
Back to Back credit
Your Answer
Back to Back credit

Multiple Choice Single Answer


Question
What is the difference in a future and a forward contract?
Correct Answer
Futures are tradeable on public exchange, forwards are not
Your Answer
Futures are tradeable on stock exchange, forwards are not

Select The Blank


Question
Position in a currency is said to be ________, when sales equal purchases.
Correct Answer
Square
Your Answer
Square

Select The Blank


Question
EEFC account holder is allowed to have ________ facility.
Correct Answer
Cheque book and nomination
Your Answer
Cheque book and nomination

Match The Following


Question
Correct Answer
Your Answer
IBRD
World Bank
World Bank
Collapse of IMF administered fixed exchange rates
Early 1970s
Early 1970s
No International control on Exchange rates
Mid 80s
Mid 80s
Euro as a currency note/coin
2002
2002

Select The Blank


Question
After the second world war many countries adopted the route of ________ to give facelift
to sagging economies.
Correct Answer
Devaluation of their currencies
Your Answer
Devaluation of their currencies

Multiple Choice Multiple Answer


Question
Which of these are considered as miscellaneous documents?
Correct Answer
Packing list , Weight certificate
Your Answer
Packing list , Weight certificate

Select The Blank


Question
________ enables bankers to extend purchase, negotiation or discount of export bills.
Correct Answer
Post shipment credit guarantee
Your Answer
Post shipment credit guarantee

True/False
Question
The amount in EEFC account can be deposited in FCNR account to get interest.
Correct Answer
False
Your Answer
False

Multiple Choice Multiple Answer


Question
In a documentary credit the word document means :-
Correct Answer
Specified documents of title, transportation, insurance , Specified certificates, and other
papers required as per the regulations in the buyers country
Your Answer
Specified documents of title, transportation, insurance , Cheques, drafts, postal orders, ,
Credit is documented as an evidence

Multiple Choice Multiple Answer


Question
At the request of M/s Universal Traders Calcutta, State Bank of India opened a
documentary credit in Favour of M/s Star Trading Co Dubai, for USD 25000/-.Here State
Bank of India Calcutta is known as
Correct Answer
Issuing Bank , Opening Bank
Your Answer
Issuing Bank , Exporters Bank , Confirming Bank

Multiple Choice Single Answer


Question
What is the meaning of right to buy or sell the future contract?
Correct Answer
An Option
Your Answer
A forward contract

Multiple Choice Multiple Answer


Question
World Bank gives loans for
Correct Answer
Structural Adjustments , Infrastructure projects , BOP problems
Your Answer
Structural Adjustments , Infrastructure projects , BOP problems

Multiple Choice Multiple Answer


Question
The maximum period for which a forward contract can be granted by the AD depends
upon which RBI directives?
Correct Answer
Maximum Period of repatriation of export proceeds , Maximum Period of payment for
Imports
Your Answer
Maximum Period of repatriation of export proceeds , Maximum Period of payment for
Imports , The need of the exporter

Multiple Choice Single Answer


Question
If a dealer of securities is quoting rate as 200-250 then the rate 200 signifies which rate
with reference to him?
Correct Answer
Bid rate
Your Answer
Bid rate

Multiple Choice Multiple Answer


Question
How does a company use swap to restructure debt, in its balance sheet?
Correct Answer
By resorting to floating rate from fixed rate , By resorting to fixed rate from floating rate
Your Answer
By resorting to floating rate from fixed rate , By resorting to fixed rate from floating rate ,
Prepayment of existing debts

Multiple Choice Multiple Answer


Question
The characteristics of an International documentary credit are :-
Correct Answer
It is an undertaking given by the openers bank to pay certain sum of money , It is an
undertaking given on behalf of a certain person to another person in different country
Your Answer
It is an undertaking given by the openers bank to pay certain sum of money , It is an
undertaking given on behalf of a certain person to another person in different country , It
is a stamped agreement and is not valid unless it is signed by the issuer

Select The Blank


Question
An option on a future is ________.
Correct Answer
Derivative on a derivative
Your Answer
Derivative on a derivative

Multiple Choice Single Answer


Question
Which invoice is drawn in specific form to be supplied by the consular office of the
importer's country, for treatment of preferential tariff rates?
Correct Answer
Customs invoice
Your Answer
Consular Invoice

True/False
Question
Indian companies are now allowed to freely invest abroad up to $1.5 million, raised
through GDE or EEFC without prior permission from RBI.
Correct Answer
False
Your Answer
True

Multiple Choice Multiple Answer


Question
With reference to ECB, fund raising activity includes :-
Correct Answer
Floating rate notes, bonds, debentures , Syndicate loans, issue of shares
Your Answer
Floating rate notes, bonds, debentures , Syndicate loans, issue of shares

True/False
Question
In an interest rate swap if the payment schedules are identical, only diffrence between the
two payments is delivered.
Correct Answer
True
Your Answer
False

Select The Blank


Question
A Credit can be a confirmed credit only if it is also ________.
Correct Answer
An Irrevocable credit
Your Answer
An Irrevocable credit

Multiple Choice Single Answer


Question
Where does the word derivative originate from?
Correct Answer
Mathematics
Your Answer
Mathematics

True/False
Question
An Indian party which has made direct investment abroad has to submit a annual
performance report in form ARP-1 to RBI.
Correct Answer
False
Your Answer
False
Multiple Choice Single Answer
Question
With whom can an exporter or importer book the forward contract?
Correct Answer
Authorised dealer/Authorised person
Your Answer
Exchange Brokers

Multiple Choice Single Answer


Question
What is the Indian Govt's obligation of becoming member of IMF?
Correct Answer
Ensure orderly exchange arrangement, promote stable exchange rate
Your Answer
Ensure orderly exchange arrangement, promote stable exchange rate

Select The Blank


Question
When a credit is made to available to additional beneficiary wholly or partly it is called as
________.
Correct Answer
Transferable credit
Your Answer
Revolving Credit

Multiple Choice Single Answer


Question
Why have futures and options come into existence?
Correct Answer
To avoid business risk.
Your Answer
To avoid business risk.

True/False
Question
With the advent of futures and Options there is no need for additional instruments of risk
hedging.
Correct Answer
False
Your Answer
False

True/False
Question
Services of a Paying bank are taken when currencies of exporters country or the
importers country is not involved in the transaction.
Correct Answer
False
Your Answer
False

Multiple Choice Single Answer


Question
Which currency is traded in one leg of about 70% of the world's transactions?
Correct Answer
US Dollar
Your Answer
US Dollar

Select The Blank


Question
Global capital market can be understood from the study of ________.
Correct Answer
Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the
country
Your Answer
IMF, World Bank and local markets

True/False
Question
Sandby credis are introduced by US Banks because they were not permitted to issue on
demand guarantees.
Correct Answer
True
Your Answer
True

True/False
Question
Installment credit is issued for specific quantities of goods to be shipped every week or
month.
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer


Question
What does a speculator accept while dealing with an option?
Correct Answer
The exercise or strike price, the amount , The expiration date and time, the method of
payment
Your Answer
The exercise or strike price, the amount , The expiration date and time, the method of
payment , The Market report of the exchange which trades the option

Multiple Choice Single Answer


Question
Before abandoning the Fixed exchange rate system,the Dollar gold parity was fixed by
USA at
Correct Answer
USD 35 per Ounce of gold
Your Answer
USD 35 per Ounce of gold

Multiple Choice Single Answer


Question
Mr M has imported some goods from Greece. What is the maximum period within which
he must make the payment?
Correct Answer
Six months from date of shipment
Your Answer
Six months from date of shipment