SATISH PRADHAN DNYANASADHANA COLLEGE

Department of BMS SAMPLE MCQ QUESTIONS Subject: International Finance

Cor
rect
Sr. Ans
No Question (a) (b) (c) (d) wer
In quote of 1 USD = INR 60, _______ is a
1 home country India USA France Russia (a)
The world’s major trading currencies, which are
free to float against each other, include all of the
2 following except British Pound Japanese Yen US Dollar Spanish Peso (d)
Systematic record of economic transactions of a
country during given period of time is known as
3 _______. ADR BOP GDR IFRS (b)
Fund based services includes all of the
4 following except ________. Bill discounting Factoring Lease Financing M&A Services (d)
Opportunity cost Balance of Price of one country's Amount of
at which goods trade ratio of currency expressed in currency that can be
are produced one country to terms of another purchased with one
5 The Exchange rate is the ____________ domestically another country's currency ounce of Gold (c)
Nations that have major economic expansion
6 attract Imports Exports FDI Privatization (c)
Fee Based services includes all of the following Merchant
7 except_______. Banking Factoring M&A services Custodian services (b)
Current account includes all of the following, Merchandise Services
8 except __________. balance Balance FDI Unilateral transfers (c)
Reserves are held in the following forms, except
9 ________. Foreign Currency Gold SDR Silver (d)
Errors & Current
10 Statistical residue is a part of _________. omissions account Capital account Reserve account (a)
SDR is an international reserve asset created by
11 _________. IMF WTO World Bank IBRD (a)

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 Official reserve Current
12 FDI in BOP is covered under ___________. account account Capital account Balancing items (c)
Under __________Exchange rate system, there
is no interference of monetary authorities to
13 decide exchange rate. Fixed Floating Mixed Pegged (b)
Under___________ Exchange rate system,
value of currency is decided by the market
14 forces of demand and supply. Fixed Floating Mixed Pegged (b)
In Spot market, exchange of currencies take
15 place on _______ basis. T+1 T+0 T+2 T+3 (b)
An account which is held within a domestic
country by a foreign bank, in a currency of
16 domestic country is known as _______ account LORO NOSTRO VOSTRO SWIFT (c)
17 SBI A/c with HSBC in UK is an example of LORO NOSTRO VOSTRO SWIFT (b)
USD/DKK
Inverse quote for USD/DKK 5.7935 - 5.8085 is DKK/USD 0.1722 - DKK/USD 0.1726 - USD/DKK 0.1726 -
18 _________ 0.1722 - 0.1726 0.1726 0.1722 0.1722 (a)
19 100 INR/JPY is an indirect quote for ________ India Japan US China (a)
The quote 1 GBP = INR 99.85 is a direct quote
20 for ________. India Britain US China (a)
In Holgate’s principle, if Bid > Ask, Swap
21 points of forward rate are to be added subtracted multiplied divided (b)
____ is the smallest unit by which a currency
22 quotation can change. pip bid ask spread (a)
If spot USD/INR is 50, and six months forward
23 rate is 51 then AFM is _____ 1% 4% 2% 3% (b)
_______ is a market where foreign currencies
24 are bought & sold. Stock Market Forex Market Capital Market Debt Market (b)
_______ Theory states that the exchange rate
between currencies of two countries should be
25 equal to the ratio of the countries price levels. IRP PPP Fishers Marshalls (b)
If formula I of Fishers effect is positive, borrow Foreign,
26 _______ and invest in ________. Foreign, Home Foreign Home, Home Home, Foreign (d)
__________ is a standardized contract to Options
27 exchange one currency for another at a Futures contract Contract SWAPS Forward Contract (a)

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 specified date in the future at an exchange rate
which is fixed on the purchase date
organised
Over the counter market
Foreign currency forward market is Unorganized without Organised, listed Unorganised Listed
28 ___________ market trading market market (a)
An option giving the buyer of the option the
right to buy but not an obligation to buy a
29 currency is called ________ Call Option Put Option Forward Option Futures Option (a)
30 _________ contacts are bilateral contracts. Forward Futures Options Swaps (a)
_________ bond is issued in a local market by a
foreign borrower, denominated in local
31 currency Foreign Bond Euro Bond Domestic Bond Euro credit (a)
_________ bond is issued in a local market by a
domestic borrower, usually denominated in
32 local currency Foreign Bond Euro Bond Domestic Bond Euro credit (a)
______ is a negotiable instrument issued by a
US bank, representing non-US company stock,
33 trading on the US stock Exchange. ADR GDR IDR Euro Bonds (a)
______ is a negotiable instrument issued by an
international depository bank, representing a
foreign company stock, trading on global stock
34 Exchanges. ADR GDR IDR Euro Bonds (b)
In ADR/GDR process, __________ issues Depository
35 depository receipts in foreign markets. Custodian Bank Bank Issuing Company Lead Manager (b)
Investment &
Indian Profit Public Initial Prospectus Initial Public
36 IPO stands for _____________. Organisation Offerings offering Offering (d)
_______ was introduced at a time when forex
37 reserves of the country were low. FERA FEMA GATT EXIM (a)
_______ can authorize a person/company to
38 deal in foreign exchange. SEBI RBI IRDA Parliament (b)
______ frames rules and guidelines for Forex
39 Business in India RBI SEBI IRDA FEDAI (d)
If IRR > WACC, then the Project must be
40 __________ Accepted Rejected Discarded Reviewed (a)
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 Profitability Pay Back
41 ___________ is known as Benefit/cost ratio Index period NPV IRR (a)
Lower the better applies to ________method of Pay Back
42 Capital budgeting NPV period IRR Profitability Index (b)
__________ is not a type of foreign exchange Translation
43 risk. Transaction risk Risk Economic Risk Natural Risk (d)
All are methods of Internally managing foreign Leading & Denomination in local
44 exchange risk except,______________. Exposure Netting lagging Currency Forward Contract (d)
If two banks are quoting the following GBP
rates: Bank A : Rs 78.9810 - 79.1110 and Bank
B : Rs 79. 0110 - 79.2350. The arbitrage
45 opportunity will be ________. 100 0 124 142 (b)
When a company has receipts & payments in
the same foreign currency due at the same time,
it can use __________technique of managing Risk Sharing Exposure Netting
46 foreign exchange risk. agreement Leading Lagging (Matching) (d)
An investor looking at reducing his risk is
47 known as ______. Speculator Hedger Arbitrageur Trader (b)
___________ analyses if the benefits will Economic Technical
48 justify the project cost/investment done. analysis analysis Managerial analysis Market analysis (a)
Spot USD/INR is 60.5600/60.5700 and one
month SWAP points are 600/700 then outright 60.6400/60.62
49 forward rate will be ________. 60.6200/60.6400 00 61.1600/61.2700 61.2700/61.1600 (a)
Spot CHF/DEM rate is 0.7865/78 and one
month forward points are 25-20 then what will 0.7890 -
50 be the one month forward CHF/DEM quote 1.0365 - 0.9878 0.7898 0.5365 - 0.5878 0.7840 - 0.7858 (d)