211 + Mcqs in International Finance Page 2 McqOptions

51.	Spot used INR 60- and six-months forward is USD INR 61.AFM is ____________
A.	3.33%
B.	1.13%
C.	2.33%
D.	4.33%
Answer» B. 1.13%

Discussion

52.	Difference between except and import of goods and services______________.
A.	Balance of Trade
B.	Balance of Payment
C.	Capital Account
D.	Profit
Answer» B. Balance of Payment

Discussion

53.	_________ theory states that the exchange rate between currencies of two countries should be equal to the ratio of the countries price levels.
A.	IRP
B.	PPP
C.	Fisher`s
D.	T Bills
Answer» C. Fisher`s

Discussion

54.	Balance of Trade is a _________ concept.
A.	Wider
B.	Small
C.	Narrow
D.	Favorable
Answer» D. Favorable

Discussion

55.	Balance of Trade =Net earnings on exports ___________
A.	Net payment of Import
B.	Net payment of export
C.	Cost of Goods Sold
D.	Income Tax
Answer» B. Net payment of export

Discussion

56.	BOP Stands for ___________
A.	Balance of Profit
B.	Balance of Payment
C.	Balance of Positive impact
D.	Balance of Profit in Trade
Answer» C. Balance of Positive impact

Discussion

57.	balance of payment = Current Account + balancing Item _____________
A.	Saving Account
B.	Fixed Deposit Account
C.	Capital Account
D.	Reserve Account
Answer» D. Reserve Account

Discussion

58.	Balance of payment is a statement that records all __________ transactions between a country and the rest of the world.
A.	Goods
B.	Cash
C.	Credit
D.	Monetary
Answer» E.

Discussion

59.	International Monetary fund which was given the task of implementing and monitoring the__________
A.	BWS
B.	IBRD
C.	Nixon Stock
D.	BSW
Answer» B. IBRD

Discussion

60.	___________ was the first university implemented system for valuing currencies.
A.	Gold Exchange
B.	Gold Standard
C.	Silver Coin
D.	Bullions
Answer» C. Silver Coin

Discussion

61.	Balance of payment Identity equation ______________
A.	FA + RA + CA =0
B.	RA + CA+ FA = 0
C.	CA + FA+ RA = 0
D.	CA + FA = 0
Answer» D. CA + FA = 0

Discussion

62.	IIP is a subset of the national _____________
A.	Statement
B.	Profit and Loan Account
C.	Balance sheet
D.	Financial Asset and Liability
Answer» D. Financial Asset and Liability

Discussion

63.	EURO is single currency of the European Monetary Union adopted on _______________
A.	January 1,1999
B.	January 1, 2000
C.	January 1, 1997
D.	January 1 1996
Answer» B. January 1, 2000

Discussion

64.	BWS came into effect in July______________
A.	1939
B.	1945
C.	1944
D.	1970
Answer» D. 1970

Discussion

65.	__________ supports sustainable investments in the private sector in developing countries.
A.	IFC
B.	IMF
C.	World Bank
D.	RBI
Answer» B. IMF

Discussion

66.	Foreign Investment are recorded in the _________ of balance of payments.
A.	Current Account
B.	Saving Account
C.	Capital Account
D.	Fixed Deposit Account
Answer» D. Fixed Deposit Account

Discussion

67.	___________ is widely used by Government for formulating policies for economy.
A.	BOP
B.	BOT
C.	FDI
D.	SDR
Answer» B. BOT

Discussion

68.	__________ is a standardized contract to exchange one currency for another at a special date in the future at a price (exchange rate) that is fixed on the purchase date.
A.	Futures Contract
B.	Options Contract
C.	Swaps
D.	Forward contract
Answer» B. Options Contract

Discussion

69.	________ is also known as price quotation.
A.	Direct Quote
B.	Indirect Quote
C.	Spot Quote
D.	Spread Quote
Answer» B. Indirect Quote

Discussion

70.	If formula I of Fishers effect is positive, borrow and invest in .
A.	foreign, home
B.	foreign, foreign
C.	home, home
D.	home, foreign
Answer» E.

Discussion

71.	_________ is also known as price Quantity Quote.
A.	Forward Quote
B.	Indirect Quote
C.	Spot Quote
D.	Spread Quote
Answer» C. Spot Quote

Discussion

72.	_____ is todays quote.
A.	Spot Quote
B.	Forward Quote
C.	Inter Bank Quote
D.	Mid Quote
Answer» B. Forward Quote

Discussion

73.	Under gold standard system, countries gold reserves were required to be in custody of _________
A.	Swiss Bank
B.	Central Bank
C.	Foreign Bank
D.	Reserve Bank
Answer» C. Foreign Bank

Discussion

74.	___________ is also known as Bid office spread.
A.	Direct Quote
B.	Mid Quote
C.	Spread Quote
D.	Cross Currency Quote
Answer» D. Cross Currency Quote

Discussion

75.	___________ is also known as reference rate.
A.	Interbank Quote
B.	Cross Currency Quote
C.	Mid Quote
D.	Bid and Ask Quote
Answer» D. Bid and Ask Quote

Discussion

76.	Price of _________-- currency in terms of national currency.
A.	Home
B.	Foreign
C.	National
D.	Direct Rate
Answer» C. National

Discussion

77.	US Dollar serves as a _________ Currency.
A.	Vehicle
B.	Foreign
C.	National
D.	Forex Market
Answer» B. Foreign

Discussion

78.	If two banks are quoting the following GBP rates: Bank A: Rs.78.9810-79.1110 and Bank B: Rs.79.0110-19.2350. The arbitrage opportunity will be _________________
A.	100
B.	0
C.	124
D.	142
Answer» C. 124

Discussion

79.	Money market instruments include all the following, except _____________
A.	Commercial papers
B.	T -Bills
C.	Certificate of Deposit
D.	Equity shares
Answer» E.

Discussion

80.	Bid rate is lesser than _____________ rate.
A.	Inverse
B.	Ask
C.	Cross
D.	Foreign
Answer» C. Cross

Discussion

81.	If USD /CAD 1.1630, 3 months forward 1. 1675.Annualized interest rate CAD 6%, USD 4%. Arbitrage gain will be_____________
A.	0
B.	1078
C.	1087
D.	1870
Answer» D. 1870

Discussion

82.	________ theory states that exchange rate between two currencies is directly affected by their interest rates.
A.	IRP
B.	PPP
C.	Fisher`s
D.	Home Foreign
Answer» D. Home Foreign

Discussion

83.	PPP theory ____________government intervention.
A.	Ignores
B.	Includes
C.	Requires
D.	Fishers
Answer» B. Includes

Discussion

84.	In Quote of 1$ = Rs.61, __________ is a home country.
A.	India
B.	US
C.	France
D.	Australia
Answer» B. US

Discussion

85.	If formula I of Fishers effect is positive, Borrow ___________ , invest __________.
A.	Foreign, Home
B.	Foreign, Foreign
C.	Home, Home
D.	Home Foreign
Answer» E.

Discussion

86.	The _______ requires that an upfront margin to trade on an exchange.
A.	Currency forwards
B.	Currency options
C.	Currency FTF`s
D.	Currency Futures
Answer» E.

Discussion

87.	Which of the following does the most to reduce default risk for futures contracts_________
A.	High liquidity
B.	Flexible delivery arrangements
C.	Marking to market
D.	Credit checks for both buyers and sellers
Answer» D. Credit checks for both buyers and sellers

Discussion

88.	Which of the following is false ________
A.	Futures contracts trade on a financial exchange
B.	Futures contracts are more liquid than forward contracts
C.	Futures contracts are marked to market
D.	Futures contracts allow fewer delivery options than forward contracts
Answer» C. Futures contracts are marked to market

Discussion

89.	Foreign currency forward market is ___________
A.	An over the counter unorganized market
B.	Organized market without trading
C.	Organized listed market
D.	Unauthorized listed market
Answer» B. Organized market without trading

Discussion

90.	An option giving the buyer of the option the right but not the obligation to buy a currency is _____________
A.	Call option
B.	Put option
C.	Forward option
D.	Future option
Answer» B. Put option

Discussion

91.	Which of the following financial instruments is primarily used to transfer risk _____________
A.	Bonds
B.	Home Mortgages
C.	Futures Contract
D.	Stocks
Answer» D. Stocks

Discussion

92.	Regulation _________ of federal Reserve Act imposed a ceiling on interest rates that could be paid on deposits by Banks in the US.
A.	P
B.	Q
C.	R
D.	M
Answer» C. R

Discussion

93.	__________ bond is issued in a local market by a foreign borrower, denominated in local currency.
A.	Foreign
B.	Euro
C.	Domestic
D.	Euro Credit
Answer» B. Euro

Discussion

94.	___________ once issued bonds with coupon rates tied to its financial performance.
A.	Electrolux
B.	Wait Disney
C.	Japan
D.	Infosys
Answer» C. Japan

Discussion

95.	______________ is type of security listed on Luxembourg.
A.	ADR
B.	GDR
C.	IDR
D.	CDR
Answer» C. IDR

Discussion

96.	ADR `s are dominated in _______ currency.
A.	US $
B.	Euro
C.	GBP
D.	INR
Answer» B. Euro

Discussion

97.	In ADR and GDR process, _______ issues the depository Receipts in Foreign Markets.
A.	Custodian bank
B.	Depository Bank
C.	Issuing Company
D.	Lead manager
Answer» C. Issuing Company

Discussion

98.	Level _________ ADR `s must comply with various SEC rule, including full registration and reporting requirements of SEC.
A.	I
B.	II
C.	III
D.	IV
Answer» D. IV

Discussion

99.	____________ is also known as secrecy jurisdiction.
A.	Tax haven
B.	Transfer Pricing
C.	Foreign affiliate
D.	Tax
Answer» B. Transfer Pricing

Discussion

100.	____________ is a Tax avoidance technique whereby multinational subsidiaries are financed primarily by debt from the parent company instead of equity capital.
A.	Thin Capitalization
B.	Repatriating Profits
C.	Transfer Pricing
D.	Tax haven
Answer» B. Repatriating Profits

Discussion

Explore topic-wise MCQs in Bachelor of Management Studies (BMS).

Spot used INR 60- and six-months forward is USD INR 61.AFM is ____________

Difference between except and import of goods and services______________.

_________ theory states that the exchange rate between currencies of two countries should be equal to the ratio of the countries price levels.

Balance of Trade is a _________ concept.

Balance of Trade =Net earnings on exports ___________

BOP Stands for ___________

balance of payment = Current Account + balancing Item _____________

Balance of payment is a statement that records all __________ transactions between a country and the rest of the world.

International Monetary fund which was given the task of implementing and monitoring the__________

___________ was the first university implemented system for valuing currencies.

Balance of payment Identity equation ______________

IIP is a subset of the national _____________

EURO is single currency of the European Monetary Union adopted on _______________

BWS came into effect in July______________

__________ supports sustainable investments in the private sector in developing countries.

Foreign Investment are recorded in the _________ of balance of payments.

___________ is widely used by Government for formulating policies for economy.

__________ is a standardized contract to exchange one currency for another at a special date in the future at a price (exchange rate) that is fixed on the purchase date.

________ is also known as price quotation.

If formula I of Fishers effect is positive, borrow and invest in .

_________ is also known as price Quantity Quote.

_____ is todays quote.

Under gold standard system, countries gold reserves were required to be in custody of _________

___________ is also known as Bid office spread.

___________ is also known as reference rate.

Price of _________-- currency in terms of national currency.

US Dollar serves as a _________ Currency.

If two banks are quoting the following GBP rates: Bank A: Rs.78.9810-79.1110 and Bank B: Rs.79.0110-19.2350. The arbitrage opportunity will be _________________

Money market instruments include all the following, except _____________

Bid rate is lesser than _____________ rate.

If USD /CAD 1.1630, 3 months forward 1. 1675.Annualized interest rate CAD 6%, USD 4%. Arbitrage gain will be_____________

________ theory states that exchange rate between two currencies is directly affected by their interest rates.

PPP theory ____________government intervention.

In Quote of 1$ = Rs.61, __________ is a home country.

If formula I of Fishers effect is positive, Borrow ___________ , invest __________.

The _______ requires that an upfront margin to trade on an exchange.

Which of the following does the most to reduce default risk for futures contracts_________

Which of the following is false ________

Foreign currency forward market is ___________

An option giving the buyer of the option the right but not the obligation to buy a currency is _____________

Which of the following financial instruments is primarily used to transfer risk _____________

Regulation _________ of federal Reserve Act imposed a ceiling on interest rates that could be paid on deposits by Banks in the US.

__________ bond is issued in a local market by a foreign borrower, denominated in local currency.

___________ once issued bonds with coupon rates tied to its financial performance.

______________ is type of security listed on Luxembourg.

ADR `s are dominated in _______ currency.

In ADR and GDR process, _______ issues the depository Receipts in Foreign Markets.

Level _________ ADR `s must comply with various SEC rule, including full registration and reporting requirements of SEC.

____________ is also known as secrecy jurisdiction.

____________ is a Tax avoidance technique whereby multinational subsidiaries are financed primarily by debt from the parent company instead of equity capital.

If formula I of Fishers effect is positive, Borrow _ , invest .