MCQOPTIONS
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MCQOPTIONS
This section includes 195 Mcqs, each offering curated multiple-choice questions to sharpen your Bachelor of Business Administration (BBA) knowledge and support exam preparation. Choose a topic below to get started.
| 51. |
The Bretton Woods accord |
| A. | of 1879 created the gold standard as the basis of international finance |
| B. | of 1914 formulated a new international monetary system after the collapse of the gold standard |
| C. | of 1944 formulated a new international monetary system after the collapse of the gold standard |
| D. | none of the above |
| Answer» D. none of the above | |
| 52. |
A speculator in foreign exchange is a person who |
| A. | buys foreign currency, hoping to profit by selling it a a higher exchange rate at some later date |
| B. | earns illegal profit by manipulation foreign exchange |
| C. | causes differences in exchange rates in different geographic markets |
| D. | none of the above |
| Answer» B. earns illegal profit by manipulation foreign exchange | |
| 53. |
The exchange rate is the |
| A. | total yearly amount of money changed from one country’s currency to another country’s currency |
| B. | total monetary value of exports minus imports |
| C. | amount of country’s currency which can exchanged for one ounce of gold |
| D. | price of one country’s currency in terms of another country’s currency |
| Answer» E. | |
| 54. |
Which of the following examples definitely illustrates a depreciation of the U.S. dollar? |
| A. | the dollar exchanges for 1 pound and then exchanges for 1.2 pounds. |
| B. | the dollar exchanges for 250 yen and then exchanges for 275 francs. |
| C. | the dollar exchanges for 100 francs and then exchanges for 120 yen. |
| D. | the dollar exchanges for 120 francs and then exchanges for 100 francs |
| Answer» E. | |
| 55. |
Interest rate swaps are usually possible because international financial markets in different countriesare |
| A. | efficient |
| B. | perfect |
| C. | imperfect |
| D. | both a & b |
| Answer» D. both a & b | |
| 56. |
Which of the following are institutional banks that provide financial support and professional advicefor developing countries? |
| A. | multilateral development banks |
| B. | central banks |
| C. | investment banks |
| D. | barclays bank |
| Answer» B. central banks | |
| 57. |
What is the name of the international organization that fosters monetary and financial cooperationand serves as a bank for central banks? |
| A. | wto |
| B. | eu |
| C. | world bank |
| D. | bank for international settlements |
| Answer» E. | |
| 58. |
WTO stands for |
| A. | world technology association |
| B. | world time organization |
| C. | world trade organization |
| D. | world tourism organization |
| Answer» D. world tourism organization | |
| 59. |
The WTO was established to implement the final act of Uruguay Round agreement of …… |
| A. | mfa |
| B. | gatt |
| C. | trip’s |
| D. | uno |
| Answer» C. trip’s | |
| 60. |
.………is only a legal agreement and it is not an institution, but ….. is a permanent institution. |
| A. | gatt, wto |
| B. | wto, gatt |
| C. | wto, imf |
| D. | imf, gatt |
| Answer» B. wto, gatt | |
| 61. |
Which of the following is the price at which the trader is willing to sell foreign currency? |
| A. | bid |
| B. | spread |
| C. | offer |
| D. | cross rate |
| Answer» D. cross rate | |
| 62. |
The ______________ is the price at which the trader is willing to buy foreign currency. |
| A. | offer |
| B. | bid |
| C. | spread |
| D. | cross rate |
| Answer» C. spread | |
| 63. |
The biggest market for foreign exchange is which of the following? |
| A. | new york |
| B. | tokyo |
| C. | london |
| D. | china |
| Answer» D. china | |
| 64. |
Outright forward transactions involve the exchange of currency beyond three days at a fixed exchangerate, known as the: |
| A. | spot rate. |
| B. | forward rate |
| C. | fx swap rate. |
| D. | reverse transaction rate |
| Answer» C. fx swap rate. | |
| 65. |
______________ involve the exchange of currency the second day after the date on which the twoforeign exchange traders agree to the transaction. |
| A. | spot transactions |
| B. | outright forward transactions |
| C. | fx swaps |
| D. | reverse transactions |
| Answer» B. outright forward transactions | |
| 66. |
What is FEMA? |
| A. | first exchange management act |
| B. | foreign exchequer management act |
| C. | foreign exchange management act |
| D. | d)foreign evaluation management act |
| Answer» D. d)foreign evaluation management act | |
| 67. |
The swap arrangement where principal amounts are not exchanged, but periodical payments will be |
| A. | currency swap |
| B. | cross currency interest swap |
| C. | interest rate swap. |
| D. | non-financial swap. |
| Answer» D. non-financial swap. | |
| 68. |
Exchange rate between currency A and currency B, given the values of currencies A and B with respect toa third currency is known as |
| A. | golden standard |
| B. | flexible exchange rate |
| C. | fixed exchange rate |
| D. | cross exchange rate |
| Answer» E. | |
| 69. |
Difference between buying and selling rates in an exchange rate is known as |
| A. | strike price |
| B. | spread |
| C. | swap points |
| D. | spot rate |
| Answer» C. swap points | |
| 70. |
The __________ is especially well suited to offer hedging protection against transactions risk exposure. |
| A. | forward market |
| B. | spot market |
| C. | transactions market |
| D. | inflation-rate market |
| Answer» B. spot market | |
| 71. |
The demand for domestic currency in the foreign exchange market is indicated by the followingtransactions in balance of payment |
| A. | export of goods and services |
| B. | import of goods and services. |
| C. | export of goods and services and capital inflows. |
| D. | import of goods and services and capital outflows. |
| Answer» D. import of goods and services and capital outflows. | |
| 72. |
India is facing continuous deficit in its balance of payments. In the foreign exchange marketrupee is expected to |
| A. | depreciate. |
| B. | appreciate. |
| C. | show no specific tendency. |
| D. | depreciate against currencies of the countries with positive balance of payment and appreciate against |
| Answer» B. appreciate. | |
| 73. |
An economist will define the exchange rate between two currencies as the: |
| A. | amount of one currency that must be paid in order to obtain one unit of another currency |
| B. | difference between total exports and total imports within a country |
| C. | price at which the sales and purchases of foreign goods takes place |
| D. | ratio of import prices to export prices for a particular country |
| Answer» B. difference between total exports and total imports within a country | |
| 74. |
In a quote exchange rate, the currency that is to be purchase with another currency is called the |
| A. | liquid currency |
| B. | foreign currency |
| C. | local currency |
| D. | base currency |
| Answer» E. | |
| 75. |
A floating exchange rate |
| A. | is determined by the national governments involved |
| B. | remains extremely stable over long periods of time |
| C. | is determined by the actions of central banks |
| D. | is allowed to vary according to market forces |
| Answer» E. | |
| 76. |
If the U.S. dollar appreciates relative to the British pound, |
| A. | it will take fewer dollars to purchase a pound |
| B. | it will take more dollars to purchase a pound |
| C. | it is called a weakening of the dollar |
| D. | both a & c |
| Answer» B. it will take more dollars to purchase a pound | |
| 77. |
Exchange rates |
| A. | are always fixed |
| B. | fluctuate to equate the quantity of foreign exchange demanded with the quantity supplied |
| C. | fluctuate to equate imports and exports |
| D. | fluctuate to equate rates of interest in various countries |
| Answer» C. fluctuate to equate imports and exports | |
| 78. |
Hedging is used by companies to: |
| A. | decrease the variability of tax paid |
| B. | decrease the spread between spot and forward market quotes |
| C. | increase the variability of expected cash flows |
| D. | decrease the variability of expected cash flows |
| Answer» E. | |
| 79. |
_______ is the first step in the internationalization process. |
| A. | license |
| B. | foreign investment |
| C. | sales |
| D. | export |
| Answer» B. foreign investment | |
| 80. |
By definition, currency appreciation occurs when |
| A. | the value of all currencies falls relative to gold. |
| B. | the value of all currencies rises relative to gold. |
| C. | the value of one currency rises relative to another currency. |
| D. | the value of one currency falls relative to another currency |
| Answer» D. the value of one currency falls relative to another currency | |
| 81. |
In the foreign exchange market, the ________ of one country is traded for the ________ of anothercountry. |
| A. | currency; currency |
| B. | currency; financial instruments |
| C. | currency; goods |
| D. | goods; goods |
| Answer» B. currency; financial instruments | |
| 82. |
Ultimately ………………was replaced by the …………….on 1st Jan 1995 |
| A. | gats, wto |
| B. | wto, gatt |
| C. | gatt, wto |
| D. | imf, gatt |
| Answer» D. imf, gatt | |
| 83. |
By having business in different countries, a firm reduces |
| A. | credit risk. |
| B. | political risk. |
| C. | financial risk. |
| D. | business risk. |
| Answer» C. financial risk. | |
| 84. |
International business does not result in the following |
| A. | innovation is encouraged. |
| B. | international cooperation is encouraged. |
| C. | imports are rendered cheap. |
| D. | consumption is minimized. |
| Answer» E. | |
| 85. |
Free international trade maximizes world output through |
| A. | countries specializing in production of goods they are best suited for. |
| B. | reduction in taxes. |
| C. | increased factor income. |
| D. | encouraging competition. |
| Answer» B. reduction in taxes. | |
| 86. |
The following factor does not differentiate international business from domestic business |
| A. | different currencies |
| B. | product quality |
| C. | product mobility |
| D. | trade policies |
| Answer» C. product mobility | |
| 87. |
Immobility of labor among nations is |
| A. | absolute. |
| B. | relatively of a higher degree than among regions in the same country. |
| C. | relatively easier than movement within the country. |
| D. | of the same degree as within the country. |
| Answer» C. relatively easier than movement within the country. | |
| 88. |
The —————-company produces, markets, invests and operates across the world |
| A. | global |
| B. | international |
| C. | transnational |
| D. | multinational |
| Answer» D. multinational | |
| 89. |
Business across several countries with some decentralization of management decision making tosubsidiaries is |
| A. | global business. |
| B. | multinational business. |
| C. | transnational business. |
| D. | multi-regional business. |
| Answer» C. transnational business. | |
| 90. |
…………………corporation produces in the home country or in a single country and focuses on marketingthese products globally or vice a versa. |
| A. | global |
| B. | international |
| C. | transnational |
| D. | none of the above |
| Answer» B. international | |
| 91. |
18. Select example of Indian Multinational Company |
| A. | hindustan unilever |
| B. | videocon |
| C. | cargill |
| D. | tesco |
| Answer» C. cargill | |
| 92. |
. Which is not an Indian Multinational Company? |
| A. | unilever |
| B. | asian paints |
| C. | piramal |
| D. | wipro |
| Answer» B. asian paints | |
| 93. |
Which is the right sequence of stages of Internationalization |
| A. | domestic, transnational, global, international, multinational |
| B. | domestic, international, multinational, global, transnational |
| C. | domestic, multinational, international, transnational, global |
| D. | domestic, international, transnational, multinational, global |
| Answer» C. domestic, multinational, international, transnational, global | |
| 94. |
Subsidiaries consider the regional environment for policy / Strategy formulation is known as |
| A. | polycentric approach |
| B. | regionocentric approach |
| C. | ethnocentric approach |
| D. | geocentric approach |
| Answer» C. ethnocentric approach | |
| 95. |
. Removing barriers or restrictions set by the government is called: |
| A. | liberalisation |
| B. | investment |
| C. | favorable trade |
| D. | free trade |
| Answer» B. investment | |
| 96. |
Which of the following was created in an effort to promote free trade? |
| A. | world trade organization |
| B. | the sarbanes-oxley act |
| C. | multilateral development banks |
| D. | the organization for economic cooperation and development |
| Answer» B. the sarbanes-oxley act | |
| 97. |
If a German manufacturer of household appliances wants to take advantage of the cheaper labor availablein the Czech Republic, which of the following actions will not serve that purpose? |
| A. | build a manufacturing subsidiary there and employ czech workers. |
| B. | build a plant in the czech republic and send all german workers to operate it. |
| C. | license a czech firm to produce its products under its own label. |
| D. | contract for a czech firm to do some of the processing for it. |
| Answer» C. license a czech firm to produce its products under its own label. | |
| 98. |
Which of the following would be an example of foreign direct investment from the United States toTaiwan? |
| A. | a u.s. bank buys bonds issued by a taiwan computer manufacturer. |
| B. | a u.s. car manufacturer enters into a contract with a taiwan firm to make and sell it spark plugs. |
| C. | microsoft hires a taiwanese computer programmer to debug some software for it. |
| D. | the state of california rents space in taipei for one of its employees to use promoting tourism in |
| Answer» C. microsoft hires a taiwanese computer programmer to debug some software for it. | |
| 99. |
According to this theory, the holdings of a country’s treasure primarily in the form of gold constituted itswealth. |
| A. | gold theory |
| B. | ricardo theory |
| C. | mercantilism |
| D. | hecksher theory |
| Answer» D. hecksher theory | |
| 100. |
The first phase of globalization started around 1870 and ended with ….. |
| A. | world war i |
| B. | world war ii |
| C. | the establishment of gatt |
| D. | in 1913 when gdp was high |
| Answer» B. world war ii | |