Saturday, February 26, 2011

International Finance - 5

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

Multiple Choice Single Answer
Question
In whose name is the straight bill of lading issued?
Correct Answer
The Consignee


Multiple Choice Single Answer
Question
How does ECGC promote export in India?
Correct 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

Select The Blank
Question
________ of India has granted line of credit to African countries for financing export of Capital goods.
Correct 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

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

Multiple Choice Multiple Answer
Question
Which document is used for transportation by air, rail, road, marine?
Correct 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.

Select The Blank
Question
Association of several scheduled commercial banks for forex business is ________.
Correct 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

Select The Blank
Question
In Overseas market the forward rate is generally quoted on the basis of ________.
Correct Answer
Fixed date

Multiple Choice Single Answer
Question
Proforma Invoice, Commercial Invoice, Consaular Invoice are which type of documents?
Correct Answer
Commercial Documents

Multiple Choice Single Answer
Question
How many terms are there under the class " main carriage unpaid"?
Correct Answer
Three


Multiple Choice Single Answer
Question
Examples of hedge are:
Correct 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


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


Multiple Choice Single Answer
Question
In International trade, Advance payment means :-
Correct Answer
Providing up front cash

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
Match The Following
Question
Correct 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



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"


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


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

Correct 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

Multiple Choice Multiple Answer
Question
What is a 'speculator'?
Correct 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


True/False
Question
Phytosanitary/ Radiation/Fumigation certificates are in the category of Health Certificates
Correct Answer
True



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



Select The Blank

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



Multiple Choice Single Answer
Question
Exchange Rate means
Correct Answer
Value of one currency in terms of another



Match The Following
Question
Correct Answer

Merchant banking
Portfolio management

Securitization
Issue of debt in the form of tradeable security

Prime borrower
Highest credit rating


Traditional banking service
Loans and cash credit against security

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




Multiple Choice Single Answer
Question
Who introduced the worlds first exchange traded currency futures?
Correct Answer
Chicago Mercantile Exchange



True/False
Question
In UK in london Market the Indirect Quote Method is still adopted.
Correct 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


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


Multiple Choice Single Answer
Question
Various exchange rate mechanisms are basically used for
Correct 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

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

Match The Following
Question
Correct Answer

Swap price
Difference in prices of two legs of buying and selling

Euro Market
Market in Euro currencies

Making market
Quoting rate for both buying and selling a currency

Spread
Price difference between bid and offer

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

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


Multiple Choice Multiple Answer
Question
Why does a Transaction exposure arise?
Correct Answer
Trading flows , Dividend or capital flows


Select The Blank
Question
A Documentary credit issued on the strength of another documentary credit is known as ________.
Correct 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

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


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

Match The Following
Question
Correct Answer

IBRD
World Bank

Collapse of IMF administered fixed exchange rates
Early 1970s


No International control on Exchange rates
Mid 80s


Euro as a currency note/coin
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


Multiple Choice Multiple Answer
Question
Which of these are considered as miscellaneous documents?
Correct 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


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


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


Multiple Choice Single Answer
Question
What is the meaning of right to buy or sell the future contract?
Correct Answer
An Option


Multiple Choice Multiple Answer
Question
World Bank gives loans for
Correct 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


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

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



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


Select The Blank
Question
An option on a future is ________.
Correct 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


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



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


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


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

Multiple Choice Single Answer
Question
Where does the word derivative originate from?
Correct 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


Multiple Choice Single Answer
Question
With whom can an exporter or importer book the forward contract?
Correct Answer
Authorised dealer/Authorised person


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



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



Multiple Choice Single Answer
Question
Why have futures and options come into existence?
Correct 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


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


Multiple Choice Single Answer
Question
Which currency is traded in one leg of about 70% of the world's transactions?
Correct 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
True/False
Question
Sandby credis are introduced by US Banks because they were not permitted to issue on demand guarantees.
Correct Answer
True


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


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



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

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