International Finance Scdl Solved Paper

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  The World Bank Group Consists of   Correct Answer  International Development Association , International finance Corporation , Multinational Investment Guarantee Agency  True/False   Question  Naked position is when investor does not hedge against market risk.   Correct Answer  True   Your Answer  TRUE  Multiple Choice Multiple Answer   Question  In DAF, the frontier means :  Correct Answer  Frontier of exporter's country , Frontier of importer's country  Multiple Choice Single Answer   Question  Which type of Convertibility of Rupee launched in March 1992 ?   Correct Answer  Limited convertibility   Your Answer  Convertibility on current account

 Multiple Choice Single Answer   Question  What was the reason for launching swap as an risk hedging instrument?   Correct Answer  To avoid the effects of currency control imposed in UK   Your Answer  To avoid the effects of currency control imposed in UK  Multiple Choice Single Answer   Question  Equity can be raised internationallly by a company through :  Correct Answer  Fund raising, underwriting, hedging , arbitration operations   Your Answer  Floating debt instruments  True/False   Question  In forward sales, the delivery refers to actual cash flows on due date.   Correct Answer  True  Select The Blank   Question  Any company involved in foreign exchange transactions is exposed to ________ risk.   Correct Answer  Currency   Your Answer  Payment   True/False

  Question  An AD can book a forward contract for a part of the amount of Sale Contract   Correct Answer  True  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  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  What are the activities of ICC?   Correct Answer Â

Aribtration and dispute resolving , Canvass for open trade combat commercial crime   Your Answer  Aribtration and dispute resolving , Canvass for open trade combat commercial crime  Multiple Choice Multiple Answer   Question  Which factors influence the valuation of cash flows?   Correct Answer  Incomplete capital market , Availability of projkect specific concessional finance,   Your Answer  Incomplete capital market , Rates of inflation, , volatility of exchange rates  Multiple Choice Multiple Answer   Question  What is the objective of FEDAI?   Correct Answer  Laying down terms and conditions of exchange business between Customers and Bankers , Interbank understanding for transacting forex business and exchange rates   Your Answer  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  Forward margin makes a currency cheaper then the currency is at ________.   Correct Answer  Discount   Your Answer  PAR   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  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  Bankers' Acceptance Bond   Your Answer  Usance Bill of Exchange  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  Select The Blank   Question  Rupee was liberalised on ________ account in 1993, and on current account in 1994.   Correct Answer  Trade

  Your Answer  Capital  Select The Blank   Question  Indian Co. intending to make investment under Automatic route needs to submit form ________ to RBI with enclosures.   Correct Answer  ODA   Your Answer  ODA  Multiple Choice Multiple Answer   Question  A Forward purchase contract was booked with an authorised dealer and subsequently cancelled .It :  Correct Answer  Can be booked again with another dealer , Can be booked again with the same dealer   Your Answer  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