International Finance New Pattern -8
1. Which factors are considered by RBI before granting permission to Foreign Company to set up a branch office in India?
• Track reco of the co, existing trade reltns, fin positin of the co
• Portfolio investment capacity,technology transfer intended
• Personnel working in the company, inward remittance
• External value of the currency of the company, company profile
2. Import finance is normally available at rates cheaper than domestic rates
• True / False
3. While transferring a share from resident to nonresident whose permission has to be taken
• Sect of inds assistance goi
• SEBI,
• RBI,
• stockexchange of nonresidents country
4.Packing credit is extended for a period of ----- days , 60 days,90 days, 120days, 180 days
5. Name the types of commercial debt markets
Domestic, offshore, bond mkt, derivative mkt
6. Export finance can be classified into :
Preshipment credit, post shipment credit, dutydrawback, buyers credit
7. EXIM bank acts as a __________ for RBI, GOvt & IDBI.
Agent, financier, AD, co banker
8. Exports on Defered payment credit are eligible for fin & refinance from EXIM bank, T /F
9. When is an invoice considered to be a consular?
Consularised by EXIM Bk , World BK, Exchange control of India, notation by consular of the importer in the exporters country
10. Agency which issue export certificates?
EXIM Bank, Export promotion council, commodity board, chamber of commerce
11. No guidelines on quality have been provided for investment under Liberalised remittance 25,000USD scheme by RBI: T/F
12. Within 30 days of receipt of money from For Investment the Indian Co. will report to the RO of RBI what details :
Name & address of the FI, Date of Receipt of funds, Identification no of FI, Details of govt. Approval
13. Indian party which has made direct investment abroad has to submit an Annual perf report in form ARP-1 to RBI : T /F
14. Date of exchange of currency : value date, delivery date, odd date, expiry date
15. Maxim for forex dealers in Indirect rate method : Buy Low, Sell High : Buy High, Sell High : Buy Low, Sell High : Buy High, Sell Low
16. Export finance terms : timely, adequate, cheap & liberal terms
17. EXIM bank give direct credit to Import of Capital Goods under :
Buyers Credit, Sellers credit, Exp promotion credit, Import abroad credit
18. Franchising & marketing cost for hotel & tourism related tech transfer is limited to : 3% of the gross room sales, 3% of annual turnover
19. What is the facility provided by ECGC to consultant who receive payments over a period of years from clients abroad?
Exchange risk coverage, turnover policy, service policy
20. A country can raise finance through bilateral aid of Line of credit from other countries : T / F
21. _________ insures risk in international trade . EXIM Bank, ECGC, RBI, ICC
22. International Bureau was renamed as -------------. FEDAI, INCOTERMS, World Chamber Federation, Uniform Customs & Practices
23. In case of import finance through Trust Receipts, with whom does the ownership of goods remain?
Exporter / Importer / Bank of Importer / Bank releasing the import documents
24. Income from interest on balances in NRE account is exempt from Income Tax . T / F
25. All transactions undertaken which do not alter his assets / Liabilities outside India are _----------- account transactions : current acct / capital account / resident account
26. Which type of account can be opened in EEFC ? SB / Current Account / Fixed deposit / Repatriable Acct
27. On which date did FEMA come in to force : 1st June 2000
28. Which are the sources of raising funds : own funds, syndicated loans, friends & relatives, banks
29. ICC’s organ of settlement of disputes is ---------.
30. ------------- is non-recourse discounting of export receivables : forfeiting, import loan, export loan
31. It is obligatory for Authorised Dealers under section 74 of FERA to comply with all general & specific directives given by RBI . T / F
32. Debt swaps & asset swaps linked to bonds are----------- : Arbritage , ECBs, equity investments, Floating rate notes
32. Line of credit in African countries is extended by ------------ : Dev Bank of India, IDBI, EXIM, RBI
33. EEFC account holder is eligible to have --------------facility: cheque book & nomination, OD facility, Credit card facility, loan against EEFC account balance
Showing posts with label International Finance. Show all posts
Showing posts with label International Finance. Show all posts
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
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
International Finance - 3
International Finance - 3
True/False
Question
Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations
Correct Answer
True
True/False
Question
JV means Joint venture and WOS means World of Security.
Correct 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
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
In the syndicated loan arrangement the borrower has to execute :-
Correct 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
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.
Multiple Choice Single Answer
Question
In a coupon swap who is called the buyer?
Correct Answer
One who pays the fixed rate of interest
True/False
Question
Till August 1994 India was following the Indirect Method of Rate quotation.
Correct 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
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
Multiple Choice Single Answer
Question
What are the powers of money changers?
Correct Answer
Purchase and sell foreign currency notes and travellers cheques
Select The Blank
Question
Any company involved in foreign exchange transactions is exposed to ________ risk.
Correct 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
Multiple Choice Multiple Answer
Question
What are the activities of ICC?
Correct Answer
Aribtration and dispute resolving , Canvass for open trade combat commercial crime
True/False
Question
Cause of increase in cost of public issues Underwriting fees , selling commission
Correct Answer
True
Select The Blank
Question
The currency swaps used ________.
Correct 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
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
Match The Followin
Question
Correct Answer
Departure
EXW
Main carriage paid
CFR
Main carriage unpaid
FAS
Arrival
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
True/False
Question
In red clause credit some clauses are printed in Red ink.
Correct Answer
True
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
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
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
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
Multiple Choice Multiple Answer
Question
Who can issue the Certificate of Inspection?
Correct 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
True/False
Question
In developed markets, speculators play important role in determining the trend of currency rates.
Correct 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
Select The Blank
Question
In Overseas market the forward rate is generally quoted on the basis of ________.
Correct Answer
Fixed date
Select The Blank
Question
Forward Margin makes a currency costlier then the currency is at ________.
Correct Answer
Premium
Multiple Choice Multiple Answer
Question
These are the parties to the documentary credit :-
Correct 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
Multiple Choice Single Answer
Question
Fixed, Floating or Limited flexibility are used in the context of
Correct Answer
Exchange Rates
Select The Blank
Question
In mid 1992 ________ rejected the ratification of Maastricht treaty
Correct Answer
Denmark
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
Multiple Choice Single Answer
Question
To whom is an AD required to report the cancellation of forward contracts?
Correct Answer
No one at all.
Select The Blank
Question
ECGC provides cover to an Indian contractor for construction work abroad under ________.
Correct Answer
Construction works policy
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
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
Multiple Choice Multiple Answer
Question
What are the sources of raising funds for exports?
Correct Answer
Suppliers credit , Forfaiting
Select The Blank
Question
Forward margin makes a currency cheaper then the currency is at ________.
Correct Answer
Discount
Multiple Choice Single Answer
Question
Name the common forex derivatives :-
Correct Answer
Options, futures
True/False
Question
Country risk analysis is a futile exercise in the background of cost of analysis.
Correct Answer
True
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
Match The Following
Question
Correct Answer
Issues linked with LIBOR,LIBID,LIMEAN
FRNs
Issue of bonds without fixed rate of interest, linked to short term interest rate in the global market
FloatingRate Note
Issue of loans internationally,through arranger, underwriter,co manager, for a large amount for sharing risk of lending
Syndicated Loans
Equity issues in the foreign markets either as direct investments or portfolio investments.
American or Global Depository Receipts
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
Select The Blank
Question
________ is the agency of ICC which deals with the maritime crime.
Correct Answer
International Maritime Bureau
Multiple Choice Single Answer
Question
Which of them are special funding facilities of IMF ?
Correct 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
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
Which is the most actively traded currency in the international market today?
Correct Answer
US Dollar
Match The Following
Question
Correct Answer
Intolerable risk
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Weightages %
Factors' values
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
Multiple Choice Single Answer
Question
For a spot transaction carried out on Thursday, currencies will be exchanged on :-
Correct 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
Match The Following
Question
Correct Answer
Maturity of future
Time when actual commodity is delivered
Note issuance facility
Euronotes
Bearer security issued in currency other than that of the country of issue
Eurobonds
Margin on future
Peformance bond or security deposit
True/False
Question
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument.
Correct 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
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
Multiple Choice Single Answer
Question
What is the volume of the world's average daily transactions in foreign exchange?
Correct 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
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
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
Select The Blank
Question
Over the years ________has been the most widely accepted currency in international capital market.
Correct 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
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
________ is the acid test for events to be included in country risk.
Correct Answer
Control by Government'
Select The Blank
Question
The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________.
Correct Answer
Brussels
Multiple Choice Single Answer
Question
What is Risk Syndication facility?
Correct Answer
Sharing of risk of non payment by supplier
True/False
Question
If ERD > IRD hen exporter should availa Rupee finance
Correct 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
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
True/False
Question
Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer
True
True/False
Question
There is no difference between CIP and CIF contracts except the mode of transportation.
Correct Answer
True
Multiple Choice Single Answer
Question
Financial management is complex process for
Correct 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
Select The Blank
Question
A Credit can be a confirmed credit only if it is also ________.
Correct 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
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
Multiple Choice Multiple Answer
Question
Export finance
Correct Answer
Preshipment credit , Post shipment credit , Duty Draw back
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
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
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
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
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
Multiple Choice Single Answer
Question
Examples of hedge are:
Correct 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
Select The Blank
Question
Forward margin makes a currency cheaper then the currency is at ________.
Correct 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
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
True/False
Question
JV means Joint venture and WOS means World of Security.
Correct 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
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
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
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
Multiple Choice Single Answer
Question
What are the powers of restricted money changers?
Correct Answer
Purchase foreign currencies
Multiple Choice Multiple Answer
Question
Which contracts are used for transportation by road?
Correct 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
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
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
Multiple Choice Single Answer
Question
Equity can be raised internationallly by a company through :-
Correct Answer
Fund raising, underwriting, hedging , arbitration operations
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
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
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
Multiple Choice Multiple Answer
Question
What are the activities of ICC?
Correct 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,
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
Select The Blank
Question
Forward margin makes a currency cheaper then the currency is at ________.
Correct Answer
Discount
Match The Following
Question
Correct Answer
Intolerable risk
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Weightages %
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
Multiple Choice Single Answer
Question
In the syndicated loan arrangement the borrower has to execute :-
Correct 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
Select The Blank
Question
Indian Co. intending to make investment under Automatic route needs to submit form ________ to RBI with enclosures.
Correct 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
Select The Blank
Question
The ________is a Floating rate index for swaps.
Correct Answer
US Commercial paper rate
True/False
Question
Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations
Correct Answer
True
True/False
Question
JV means Joint venture and WOS means World of Security.
Correct 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
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
In the syndicated loan arrangement the borrower has to execute :-
Correct 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
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.
Multiple Choice Single Answer
Question
In a coupon swap who is called the buyer?
Correct Answer
One who pays the fixed rate of interest
True/False
Question
Till August 1994 India was following the Indirect Method of Rate quotation.
Correct 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
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
Multiple Choice Single Answer
Question
What are the powers of money changers?
Correct Answer
Purchase and sell foreign currency notes and travellers cheques
Select The Blank
Question
Any company involved in foreign exchange transactions is exposed to ________ risk.
Correct 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
Multiple Choice Multiple Answer
Question
What are the activities of ICC?
Correct Answer
Aribtration and dispute resolving , Canvass for open trade combat commercial crime
True/False
Question
Cause of increase in cost of public issues Underwriting fees , selling commission
Correct Answer
True
Select The Blank
Question
The currency swaps used ________.
Correct 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
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
Match The Followin
Question
Correct Answer
Departure
EXW
Main carriage paid
CFR
Main carriage unpaid
FAS
Arrival
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
True/False
Question
In red clause credit some clauses are printed in Red ink.
Correct Answer
True
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
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
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
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
Multiple Choice Multiple Answer
Question
Who can issue the Certificate of Inspection?
Correct 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
True/False
Question
In developed markets, speculators play important role in determining the trend of currency rates.
Correct 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
Select The Blank
Question
In Overseas market the forward rate is generally quoted on the basis of ________.
Correct Answer
Fixed date
Select The Blank
Question
Forward Margin makes a currency costlier then the currency is at ________.
Correct Answer
Premium
Multiple Choice Multiple Answer
Question
These are the parties to the documentary credit :-
Correct 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
Multiple Choice Single Answer
Question
Fixed, Floating or Limited flexibility are used in the context of
Correct Answer
Exchange Rates
Select The Blank
Question
In mid 1992 ________ rejected the ratification of Maastricht treaty
Correct Answer
Denmark
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
Multiple Choice Single Answer
Question
To whom is an AD required to report the cancellation of forward contracts?
Correct Answer
No one at all.
Select The Blank
Question
ECGC provides cover to an Indian contractor for construction work abroad under ________.
Correct Answer
Construction works policy
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
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
Multiple Choice Multiple Answer
Question
What are the sources of raising funds for exports?
Correct Answer
Suppliers credit , Forfaiting
Select The Blank
Question
Forward margin makes a currency cheaper then the currency is at ________.
Correct Answer
Discount
Multiple Choice Single Answer
Question
Name the common forex derivatives :-
Correct Answer
Options, futures
True/False
Question
Country risk analysis is a futile exercise in the background of cost of analysis.
Correct Answer
True
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
Match The Following
Question
Correct Answer
Issues linked with LIBOR,LIBID,LIMEAN
FRNs
Issue of bonds without fixed rate of interest, linked to short term interest rate in the global market
FloatingRate Note
Issue of loans internationally,through arranger, underwriter,co manager, for a large amount for sharing risk of lending
Syndicated Loans
Equity issues in the foreign markets either as direct investments or portfolio investments.
American or Global Depository Receipts
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
Select The Blank
Question
________ is the agency of ICC which deals with the maritime crime.
Correct Answer
International Maritime Bureau
Multiple Choice Single Answer
Question
Which of them are special funding facilities of IMF ?
Correct 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
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
Which is the most actively traded currency in the international market today?
Correct Answer
US Dollar
Match The Following
Question
Correct Answer
Intolerable risk
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Weightages %
Factors' values
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
Multiple Choice Single Answer
Question
For a spot transaction carried out on Thursday, currencies will be exchanged on :-
Correct 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
Match The Following
Question
Correct Answer
Maturity of future
Time when actual commodity is delivered
Note issuance facility
Euronotes
Bearer security issued in currency other than that of the country of issue
Eurobonds
Margin on future
Peformance bond or security deposit
True/False
Question
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument.
Correct 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
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
Multiple Choice Single Answer
Question
What is the volume of the world's average daily transactions in foreign exchange?
Correct 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
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
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
Select The Blank
Question
Over the years ________has been the most widely accepted currency in international capital market.
Correct 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
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
________ is the acid test for events to be included in country risk.
Correct Answer
Control by Government'
Select The Blank
Question
The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________.
Correct Answer
Brussels
Multiple Choice Single Answer
Question
What is Risk Syndication facility?
Correct Answer
Sharing of risk of non payment by supplier
True/False
Question
If ERD > IRD hen exporter should availa Rupee finance
Correct 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
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
True/False
Question
Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer
True
True/False
Question
There is no difference between CIP and CIF contracts except the mode of transportation.
Correct Answer
True
Multiple Choice Single Answer
Question
Financial management is complex process for
Correct 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
Select The Blank
Question
A Credit can be a confirmed credit only if it is also ________.
Correct 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
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
Multiple Choice Multiple Answer
Question
Export finance
Correct Answer
Preshipment credit , Post shipment credit , Duty Draw back
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
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
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
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
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
Multiple Choice Single Answer
Question
Examples of hedge are:
Correct 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
Select The Blank
Question
Forward margin makes a currency cheaper then the currency is at ________.
Correct 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
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
True/False
Question
JV means Joint venture and WOS means World of Security.
Correct 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
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
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
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
Multiple Choice Single Answer
Question
What are the powers of restricted money changers?
Correct Answer
Purchase foreign currencies
Multiple Choice Multiple Answer
Question
Which contracts are used for transportation by road?
Correct 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
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
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
Multiple Choice Single Answer
Question
Equity can be raised internationallly by a company through :-
Correct Answer
Fund raising, underwriting, hedging , arbitration operations
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
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
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
Multiple Choice Multiple Answer
Question
What are the activities of ICC?
Correct 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,
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
Select The Blank
Question
Forward margin makes a currency cheaper then the currency is at ________.
Correct Answer
Discount
Match The Following
Question
Correct Answer
Intolerable risk
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Weightages %
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
Multiple Choice Single Answer
Question
In the syndicated loan arrangement the borrower has to execute :-
Correct 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
Select The Blank
Question
Indian Co. intending to make investment under Automatic route needs to submit form ________ to RBI with enclosures.
Correct 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
Select The Blank
Question
The ________is a Floating rate index for swaps.
Correct Answer
US Commercial paper rate
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