International Finance 3 sem scdl solved paper

International Finance - 3 LIST OF ATTEMPTED QUESTIONS AND ANSWERSTrue/FalseQuestion Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operationsCorrect Answer TrueYour Answer True

True/FalseQuestion JV means Joint venture and WOS means World of Security.Correct Answer FalseYour Answer False

Select The BlankQuestion The rate of interest on rupee finance for exports is not exceeding ________ less than PLR.Correct Answer 0.025Your Answer 50 basis points over LIBOR

Multiple Choice Multiple AnswerQuestion 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 paymentYour Answer The exercise or strike price, the amount , The expiration date and time, the method of payment

Multiple Choice Single AnswerQuestion In the syndicated loan arrangement the borrower has to execute :-Correct Answer Single Principal loan agreementYour Answer Single Principal loan agreement

True/FalseQuestion At Least one principal Lender bank is essential for issue of the ADR or GDR.Correct Answer FalseYour Answer True

Multiple Choice Single AnswerQuestion US financial system is the freest system becauseCorrect 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 AnswerQuestion In a coupon swap who is called the buyer?Correct Answer One who pays the fixed rate of interestYour Answer One who pays the fixed rate of interest

True/FalseQuestion Till August 1994 India was following the Indirect Methodof Rate quotation.Correct Answer FalseYour Answer False

Select The BlankQuestion For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme.Correct Answer Overseas investment facilityYour Answer Overseas investment facility

Multiple Choice Single AnswerQuestion 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 companyYour Answer 50% of the net worth of the investing company

Multiple Choice Single AnswerQuestion What are the powers of money changers?Correct Answer Purchase and sell foreign currency notes and travellers chequesYour Answer Purchase and sell foreign currency notes and travellers cheques and also Give export finance

Select The BlankQuestion Any company involved in foreign exchange transactions is exposed to ________ risk.Correct Answer CurrencyYour Answer Currency

Multiple Choice Multiple AnswerQuestion 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 limitsYour 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 AnswerQuestion What are the activities of ICC?Correct Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crimeYour Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime , Increased Govt regulation of Business

True/FalseQuestion Cause of increase in cost of public issues Underwriting fees , selling commissionCorrect Answer TrueYour Answer

False

Select The BlankQuestion The currency swaps used ________.Correct Answer To lower the risk of currency exposureYour Answer To lower the risk of currency exposure

True/FalseQuestion 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 FalseYour Answer True

Multiple Choice Multiple AnswerQuestion Which factors affect the exchange rates in short time period?Correct Answer Demand and supply, interest rates, inflation, , Sentiment, SpeculationYour Answer Demand and supply, interest rates, inflation, , Sentiment, Speculation , GDP,Balance of trade and payment,Unemployment

Match The FollowingQuestionCorrect AnswerYour AnswerDepartureEXWEXWMain carriage paidCFRCFRMain carriage unpaidFASFASArrivalDESDES

Multiple Choice Multiple Answer

Question Sterling Market is attractive for an international investor becauseCorrect Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bondsYour Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds , Linking of issues to currency swaps

True/FalseQuestion In red clause credit some clauses are printed in Red ink.Correct Answer TrueYour Answer False

Multiple Choice Multiple AnswerQuestion 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 themYour 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 AnswerQuestion 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 50.5000Your Answer USD 1=Rs 50.5000

Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for assessing a cross border project ?Correct Answer To weed out unviable projects and rank profitable onesYour Answer To weed out unviable projects and rank profitable ones

Multiple Choice Multiple AnswerQuestion 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 ceilingYour Answer Activity for investment is core activity of Indian Company. , Total Financial commitment in JV/WOS as per prescribed ceiling

Multiple Choice Multiple AnswerQuestion 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 AnswerQuestion Large number of exporters from which country are enjoying the privilege of receiving up front cash from importers in Russia?Correct Answer United KingdomYour Answer United Kingdom

True/FalseQuestion In developed markets, speculators play important role in determining the trend of currency rates.Correct Answer TrueYour Answer True

Select The BlankQuestion 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 RegistrationYour Answer Shelf Registration

Select The BlankQuestion In Overseas market the forward rate is generally quoted on the basis of ________.Correct Answer

Fixed dateYour Answer Calendar month

Select The BlankQuestion Forward Margin makes a currency costlier then the currency is at ________.Correct Answer PremiumYour Answer Discount

Multiple Choice Multiple AnswerQuestion These are the parties to the documentary credit :-Correct Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bankYour Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bank

Multiple Choice Multiple AnswerQuestion 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 marketYour Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market

Multiple Choice Single AnswerQuestion Fixed, Floating or Limited flexibility are used in the context ofCorrect Answer Exchange RatesYour Answer Exchange Rates

Select The BlankQuestion In mid 1992 ________ rejected the ratification of Maastricht treatyCorrect Answer DenmarkYour Answer UK

Multiple Choice Multiple AnswerQuestion 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 agreementsYour Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements

Multiple Choice Single AnswerQuestion 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 BlankQuestion ECGC provides cover to an Indian contractor for construction work abroad under ________.Correct Answer Construction works policyYour Answer Export Performance Guarantee

True/FalseQuestion 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 TrueYour Answer True

Multiple Choice Single AnswerQuestion What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992?Correct Answer USD 275 BillionYour Answer USD 275 Billion

Multiple Choice Multiple AnswerQuestion What are the sources of raising funds for exports?Correct Answer Suppliers credit , ForfaitingYour Answer Suppliers credit , Forfaiting

Select The BlankQuestion Forward margin makes a currency cheaper then the currency is at ________.Correct Answer DiscountYour Answer Discount

Multiple Choice Single AnswerQuestion Name the common forex derivatives :-Correct Answer Options, futuresYour Answer Options, futures

True/FalseQuestion Country risk analysis is a futile exercise in the background of cost of analysis.Correct Answer TrueYour Answer False

Select The BlankQuestion Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countriesCorrect Answer OECDYour Answer OECD

Match The FollowingQuestionCorrect AnswerYour Answer

Issues linked with LIBOR,LIBID,LIMEANFRNsFRNsIssue of bonds without fixed rate of interest, linked to short term interest rate in the global marketFloatingRate NoteFloatingRate NoteIssue of loans internationally,through arranger, underwriter,co manager, for a large amount for sharing risk of lendingSyndicated LoansSyndicated LoansEquity issues in the foreign markets either as direct investments or portfolio investments.American or Global Depository ReceiptsAmerican or Global Depository Receipts

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Labels: International Finance

International Finance - 2 Multiple Choice Multiple AnswerQuestion 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 MarketYour Answer Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates

Select The BlankQuestion ________ is the agency of ICC which deals with the maritime crime.Correct Answer International Maritime BureauYour Answer International Maritime Bureau

Multiple Choice Single AnswerQuestion Which of them are special funding facilities of IMF ?Correct Answer Buffer Stock FacilityYour Answer Buffer Stock Facility

True/FalseQuestion Cross currency forward contract is not meaningful if original contract is in Rupees to USDCorrect Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion 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 paymentYour 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 AnswerQuestion Which is the most actively traded currency in the international market today?Correct Answer US DollarYour Answer US Dollar

Match The FollowingQuestionCorrect AnswerYour AnswerIntolerable riskDrop the investment projectDrop the investment projectCountry risk analysisCost of evluation does not justify analysisCost of evluation does not justify analysisStock market analysisBanks are aheadFactors' valuesWeightages %Factors' values100% 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 countryYour Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country

Multiple Choice Single AnswerQuestion For a spot transaction carried out on Thursday, currencies will be exchanged on :-Correct Answer MondayYour Answer Monday

Multiple Choice Single AnswerQuestion Under which category of exchange rate did the Indian Rupee came from June 92?Correct Answer Other managed FloatingYour Answer Pegged to Single currency

Match The FollowingQuestionCorrect AnswerYour AnswerMaturity of futureTime when actual commodity is deliveredLast date of exercising optionNote issuance facilityEuronotesEuronotesBearer security issued in currency other than that of the country of issueEurobondsEurobondsMargin on futurePeformance bond or security depositPeformance bond or security deposit

True/FalseQuestion Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument.Correct Answer

FalseYour Answer False

True/FalseQuestion The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion What are margins, with reference to futures market?Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contractsYour Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts

Multiple Choice Single AnswerQuestion What is the volume of the world's average daily transactions in foreign exchange?Correct Answer USD 1 trillionYour Answer USD 1 trillion

Multiple Choice Single AnswerQuestion NIF is basically an agreement :-Correct Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papersYour Answer Which enables the investor to market the same in the secondary market

Multiple Choice Single AnswerQuestion 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 AnswerQuestion What Preshipment facility is granted by EXIM Bank to an exporter?Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroadYour Answer Preshipment credit up to six months for construction and turnkey projects abroad

Select The BlankQuestion Over the years ________has been the most widely accepted currency in international capital market.Correct Answer American DollarYour Answer American Dollar

Select The BlankQuestion As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily.Correct Answer EconomiesYour Answer Currencies

Multiple Choice Single AnswerQuestion Which currency is traded in one leg of about 70% of the world's transactions?Correct Answer US DollarYour Answer US Dollar

Select The BlankQuestion ________ 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 BrusselsYour Answer Brussels

Multiple Choice Single AnswerQuestion What is Risk Syndication facility?Correct Answer Sharing of risk of non payment by supplierYour Answer Sharing risk of Non payment by the Syndicate of Banks giving loans

True/FalseQuestion If ERD > IRD hen exporter should availa Rupee financeCorrect Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion 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 countryYour 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 AnswerQuestion 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 themYour Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them

True/FalseQuestion

Funding Options in domestic yen market are Futures, FRAs, Call and put options.Correct Answer TrueYour Answer True

True/FalseQuestion There is no difference between CIP and CIF contracts except the mode of transportation.Correct Answer TrueYour Answer True

Multiple Choice Single AnswerQuestion Financial management is complex process forCorrect Answer Companies which have international tradeYour Answer Companies which have international trade

Select The BlankQuestion 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 activityYour Answer Primary activity

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

True/FalseQuestion The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total.Correct Answer FalseYour Answer

False

Multiple Choice Single AnswerQuestion 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 50.5000Your Answer USD 1=Rs 50.5000

Multiple Choice Multiple AnswerQuestion Export financeCorrect Answer Preshipment credit , Post shipment credit , Duty Draw backYour Answer Preshipment credit , Post shipment credit , Buyers credit

Multiple Choice Multiple AnswerQuestion Internationally only those currencies are in demandCorrect Answer Which are convertible , Which have liquidity confirmed in Euro market operationsYour Answer Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value

Multiple Choice Multiple AnswerQuestion 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 marketYour Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market

Multiple Choice Multiple AnswerQuestion What does the word '"Tombstone" stand for?Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issueYour Answer

Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue

Select The BlankQuestion Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________.Correct Answer Euro Commercial PapersYour Answer Euro Commercial Papers

Multiple Choice Single AnswerQuestion Why are various methods of financial analysis used for assessing a cross border project ?Correct Answer To weed out unviable projects and rank profitable onesYour Answer To weed out unviable projects and rank profitable ones

Multiple Choice Single AnswerQuestion Examples of hedge are:Correct Answer Buy when you are having short positionYour Answer Buy when you are having short position

Multiple Choice Multiple AnswerQuestion 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 currenciesYour Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies

Select The BlankQuestion Forward margin makes a currency cheaper then the currency is at ________.Correct Answer DiscountYour Answer Discount

Multiple Choice Single AnswerQuestion 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 profitYour Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit

Multiple Choice Single AnswerQuestion The capital market is said to be volatile whenCorrect Answer Prices of capital market instruments change and are expected to change drasticallyYour Answer Prices of capital market instruments change and are expected to change drastically

True/FalseQuestion JV means Joint venture and WOS means World of Security.Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion 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 equivalentYour 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


Labels: International Finance

Friday, January 25, 2008International 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


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


Question Which contracts are used for transportation by road?

Correct Answer FCA , CPT

Your Answer FCA , CPT

Â Multiple Choice Multiple Answer

Â Â QuestionÂ ÂThe World Bank Group Consists of

Â Â Correct AnswerÂ ÂInternational Development Association , International finance Corporation , Multinational Investment Guarantee Agency

Â True/False

Â Â QuestionÂ ÂNaked position is when investor does not hedge against market risk.

Â Â Correct AnswerÂ ÂTrue

Â Â Your AnswerÂ ÂTRUE


Â Â QuestionÂ ÂIn DAF, the frontier means :-

Â Â Correct AnswerÂ ÂFrontier of exporter's country , Frontier of importer's country

Â Multiple Choice Single Answer

Â Â QuestionÂ ÂWhich type of Convertibility of Rupee launched in March 1992 ?

Â Â Correct AnswerÂ ÂLimited convertibility

Â Â Your AnswerÂ ÂConvertibility on current account


Â Â QuestionÂ ÂWhat was the reason for launching swap as an risk hedging instrument?

Â Â Correct AnswerÂ ÂTo avoid the effects of currency control imposed in UK

Â Â Your AnswerÂ ÂTo avoid the effects of currency control imposed in UK


Â Â QuestionÂ ÂEquity can be raised internationallly by a company through :-

Â Â Correct AnswerÂ ÂFund raising, underwriting, hedging , arbitration operations

Â Â Your AnswerÂ ÂFloating debt instruments

Â True/False

Â Â QuestionÂ ÂIn forward sales, the delivery refers to actual cash flows on due date.


Â Select The Blank

Â Â QuestionÂ ÂAny company involved in foreign exchange transactions is exposed to ________ risk.

Â Â Correct AnswerÂ ÂCurrency

Â Â Your AnswerÂ ÂPayment

Â

Â True/False

Â Â QuestionÂ ÂAn AD can book a forward contract for a part of the amount of Sale Contract



Â Â QuestionÂ ÂWhy does a person need protection from unfavourable movement of exchange rate?

Â Â Correct AnswerÂ ÂUnfavourable fluctuations in exchange rate can wipe out the normal business profit

Â Â Your AnswerÂ ÂHe wants to make profit

Â Match The Following

QuestionCorrect AnswerYour Answer

Merchant bankingPortfolio managementPortfolio management

SecuritizationIssue of debt in the form of tradeable securityIssue of debt in the form of tradeable security

Prime borrowerHighest credit ratingHighest credit rating

Traditional banking serviceLoans and cash credit against securityLoans and cash credit against security


Â Â QuestionÂ ÂWhat are the activities of ICC?

Â Â Correct AnswerÂ Â

Aribtration and dispute resolving , Canvass for open trade combat commercial crime

Â Â Your AnswerÂ ÂAribtration and dispute resolving , Canvass for open trade combat commercial crime


Â Â QuestionÂ ÂWhich factors influence the valuation of cash flows?

Â Â Correct AnswerÂ ÂIncomplete capital market , Availability of projkect specific concessional finance,

Â Â Your AnswerÂ ÂIncomplete capital market , Rates of inflation, , volatility of exchange rates


Â Â QuestionÂ ÂWhat is the objective of FEDAI?

Â Â Correct AnswerÂ ÂLaying down terms and conditions of exchange business between Customers and Bankers , Interbank understanding for transacting forex business and exchange rates

Â Â Your AnswerÂ ÂLaying 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

Â Â QuestionÂ ÂForward margin makes a currency cheaper then the currency is at ________.Â Â Correct AnswerÂ ÂDiscountÂ Â Your AnswerÂ ÂPAR

ÂÂ Match The Following


Intolerable riskDrop the investment projectCost of evluation does not justify analysis

Country risk analysisCost of evluation does not justify analysisContinue the project

Stock market analysisBanks are aheadBanks are ahead

Weightages %Factors' valuesFactors' values


Â Â QuestionÂ ÂA bill of exchange issued by a bank which pays specified sum of money to the holder on a specific date is called :-

Â Â Correct AnswerÂ ÂBankers' Acceptance Bond

Â Â Your AnswerÂ ÂUsance Bill of Exchange


Â Â QuestionÂ ÂIn the syndicated loan arrangement the borrower has to execute :-

Â Â Correct AnswerÂ ÂSingle Principal loan agreement

Â Â Your AnswerÂ ÂSingle Principal loan agreement

Â Select The Blank

Â Â QuestionÂ ÂRupee was liberalised on ________ account in 1993, and on current account in 1994.

Â Â Correct AnswerÂ ÂTrade

Â Â Your AnswerÂ ÂCapital

Â Select The Blank

Â Â QuestionÂ ÂIndian Co. intending to make investment under Automatic route needs to submit form ________ to RBI with enclosures.

Â Â Correct AnswerÂ ÂODA

Â Â Your AnswerÂ ÂODA


Â Â QuestionÂ ÂA Forward purchase contract was booked with an authorised dealer and subsequently cancelled .It :-

Â Â Correct AnswerÂ ÂCan be booked again with another dealer , Can be booked again with the same dealer

Â Â Your AnswerÂ ÂCan 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 AnswerQuestion 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 MMMFYour Answer Housing Loan to NRI staff of Indian Companies, , NRIs be permitted to invest in MMMFMultiple Choice Single AnswerQuestion In whose name is the straight bill of lading issued?Correct Answer The ConsigneeYour Answer The consignor

Multiple Choice Single AnswerQuestion How does ECGC promote export in India?Correct Answer By covering risk of exporting on creditYour Answer By covering risk of exporting on creditMultiple Choice Single AnswerQuestion Documents which satisfy the statutory requirements of any trade and regulatory aurhotiry are known as:-Correct Answer Regulatory DocumentsYour Answer Regulatory DocumentsSelect The BlankQuestion ________ of India has granted line of credit to African countries for financing export of Capital goods.Correct Answer EXIM BankYour Answer EXIM BankMultiple Choice Multiple AnswerQuestion Underwriters are more attracted to NIF issue because of :-Correct Answer Lesser risks , Increased returns , Easy marketability featuresYour Answer

Lesser risks , Increased returns , Easy marketability featuresMultiple Choice Single AnswerQuestion 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 rateYour Answer Unfavourable fluctuation in the exchange rateMultiple Choice Multiple AnswerQuestion Which document is used for transportation by air, rail, road, marine?Correct Answer Multimodal transport document , Combined Transport documentYour Answer Multimodal transport document , Combined Transport documentMultiple Choice Single AnswerQuestion 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 BlankQuestion Association of several scheduled commercial banks for forex business is ________.Correct Answer Foreign Exchange Dealers Association of IndiaYour Answer Foreign Exchange Dealers Association of IndiaTrue/FalseQuestion The credit rating of World Bank is high in the world Capital market because it operates at the debt equity ratio of 1:2Correct Answer FalseYour Answer TrueSelect The BlankQuestion In Overseas market the forward rate is generally quoted on the basis of ________.Correct Answer Fixed dateYour Answer Calendar fortnightMultiple Choice Single Answer

Question Proforma Invoice, Commercial Invoice, Consaular Invoice are which type of documents?Correct Answer Commercial DocumentsYour Answer Regulatory DocumentsMultiple Choice Single AnswerQuestion How many terms are there under the class " main carriage unpaid"?Correct Answer ThreeYour Answer Two

Multiple Choice Single AnswerQuestion Examples of hedge are:Correct Answer Buy when you are having short positionYour Answer Buy when you are having short positionMultiple Choice Single AnswerQuestion As per article IV of IMF for fixed exchange rates member countries agreed toCorrect Answer Change exchange rates only for correcting fundamental disequilibrium in external payments with IMF approvalYour Answer Change exchange rates only for correcting fundamental disequilibrium in external payments with IMF approvalMultiple Choice Single AnswerQuestion As per article IV of IMF for fixed exchange rates member countries agreed toCorrect Answer Change exchange rates only for correcting fundamental disequilibrium in external payments with IMF approvalYour Answer Change exchange rates only for correcting fundamental disequilibrium in external payments with IMF approvalMultiple Choice Single AnswerQuestion In International trade, Advance payment means :-Correct Answer Providing up front cashYour Answer Sending documentary credits

Multiple Choice Single AnswerQuestion 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 instructionsYour Answer Routing the documents of transport along with other documents and apply the proceeds as per instructionsMatch The Following


European optionOn or after maturity

Out of moneyLossOn or after maturity

In the moneyProfitBefore maturity

American optionBefore maturity

Select The Blank

Question QA request for additional ________ funds from a customer in a margin call.

Correct Answer Margin

Your Answer Liquid


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


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


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


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


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


Merchant bankingPortfolio managementHighest credit rating

SecuritizationIssue of debt in the form of tradeable securityLoans and cash credit against security

Prime borrowerHighest credit ratingNote issuing and underwrting facility

Traditional banking serviceLoans and cash credit against securityIssue 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


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


Labels: International Finance (Set - II)

International Finance - 4

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Select The BlankQuestion The currency swaps used ________.Correct Answer To lower the risk of currency exposureYour Answer To lower the risk of currency exposure

Multiple Choice Single AnswerQuestion Various exchange rate mechanisms are basically used forCorrect Answer Correcting currency disequilibriumYour Answer Correcting currency disequilibrium

True/FalseQuestion The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total.Correct Answer FalseYour Answer False

Select The BlankQuestion 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 RegistrationYour Answer Shelf Registration

Match The FollowingQuestionCorrect AnswerYour AnswerSwap priceDifference in prices of two legs of buying and sellingDifference in prices of two legs of buying and sellingEuro MarketMarket in Euro currencies

Market in Euro currenciesMaking marketQuoting rate for both buying and selling a currencyQuoting rate for both buying and selling a currencySpreadPrice difference between bid and offerPrice difference between bid and offer

True/FalseQuestion Floating rate notes are traded in secondary market also.Correct Answer TrueYour Answer True

Multiple Choice Multiple AnswerQuestion 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 schemeYour 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 AnswerQuestion 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 MarketYour 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 AnswerQuestion Why does a Transaction exposure arise?Correct Answer Trading flows , Dividend or capital flowsYour Answer

Trading flows , Valuation of assets and liabilities abroad in financial statements , Present value of future transaction abroad

Select The BlankQuestion A Documentary credit issued on the strength of another documentary credit is known as ________.Correct Answer Back to Back creditYour Answer Back to Back credit

Multiple Choice Single AnswerQuestion What is the difference in a future and a forward contract?Correct Answer Futures are tradeable on public exchange, forwards are notYour Answer Futures are tradeable on stock exchange, forwards are not

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

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

Match The FollowingQuestionCorrect AnswerYour AnswerIBRDWorld BankWorld BankCollapse of IMF administered fixed exchange ratesEarly 1970sEarly 1970s

No International control on Exchange ratesMid 80sMid 80sEuro as a currency note/coin20022002

Select The BlankQuestion After the second world war many countries adopted the route of ________ to give facelift to sagging economies.Correct Answer Devaluation of their currenciesYour Answer Devaluation of their currencies

Multiple Choice Multiple AnswerQuestion Which of these are considered as miscellaneous documents?Correct Answer Packing list , Weight certificateYour Answer Packing list , Weight certificate

Select The BlankQuestion ________ enables bankers to extend purchase, negotiation or discount of export bills.Correct Answer Post shipment credit guaranteeYour Answer Post shipment credit guarantee

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

Multiple Choice Multiple AnswerQuestion 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 AnswerQuestion 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 asCorrect Answer Issuing Bank , Opening BankYour Answer Issuing Bank , Exporters Bank , Confirming Bank

Multiple Choice Single AnswerQuestion What is the meaning of right to buy or sell the future contract?Correct Answer An OptionYour Answer A forward contract

Multiple Choice Multiple AnswerQuestion World Bank gives loans forCorrect Answer Structural Adjustments , Infrastructure projects , BOP problemsYour Answer Structural Adjustments , Infrastructure projects , BOP problems

Multiple Choice Multiple AnswerQuestion 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 ImportsYour Answer Maximum Period of repatriation of export proceeds , Maximum Period of payment for Imports , The need of the exporter

Multiple Choice Single AnswerQuestion 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 rateYour Answer Bid rate

Multiple Choice Multiple AnswerQuestion 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 rateYour Answer By resorting to floating rate from fixed rate , By resorting to fixed rate from floating rate , Prepayment of existing debts

Multiple Choice Multiple AnswerQuestion 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 countryYour 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 BlankQuestion An option on a future is ________.Correct Answer Derivative on a derivativeYour Answer Derivative on a derivative

Multiple Choice Single AnswerQuestion 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 invoiceYour Answer Consular Invoice

True/FalseQuestion 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

FalseYour Answer True

Multiple Choice Multiple AnswerQuestion With reference to ECB, fund raising activity includes :-Correct Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of sharesYour Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of shares

True/FalseQuestion In an interest rate swap if the payment schedules are identical, only diffrence between the two payments is delivered.Correct Answer TrueYour Answer False

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

Multiple Choice Single AnswerQuestion Where does the word derivative originate from?Correct Answer MathematicsYour Answer Mathematics

True/FalseQuestion An Indian party which has made direct investment abroad has to submit a annual performance report in form ARP-1 to RBI.Correct Answer FalseYour Answer False

Multiple Choice Single AnswerQuestion With whom can an exporter or importer book the forward contract?Correct Answer Authorised dealer/Authorised personYour Answer Exchange Brokers

Multiple Choice Single AnswerQuestion What is the Indian Govt's obligation of becoming member of IMF?Correct Answer Ensure orderly exchange arrangement, promote stable exchange rateYour Answer Ensure orderly exchange arrangement, promote stable exchange rate

Select The BlankQuestion When a credit is made to available to additional beneficiary wholly or partly it is called as ________.Correct Answer Transferable creditYour Answer Revolving Credit

Multiple Choice Single AnswerQuestion Why have futures and options come into existence?Correct Answer To avoid business risk.Your Answer To avoid business risk.

True/FalseQuestion With the advent of futures and Options there is no need for additional instruments of risk hedging.Correct Answer FalseYour Answer False

True/FalseQuestion Services of a Paying bank are taken when currencies of exporters country or the importers country is not involved in the transaction.

Correct Answer FalseYour Answer False

Multiple Choice Single AnswerQuestion Which currency is traded in one leg of about 70% of the world's transactions?Correct Answer US DollarYour Answer US Dollar

Select The BlankQuestion 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 countryYour Answer IMF, World Bank and local markets

True/FalseQuestion Sandby credis are introduced by US Banks because they were not permitted to issue on demand guarantees.Correct Answer TrueYour Answer True

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

Multiple Choice Multiple AnswerQuestion 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 AnswerQuestion Before abandoning the Fixed exchange rate system,the Dollar gold parity was fixed by USA atCorrect Answer USD 35 per Ounce of goldYour Answer USD 35 per Ounce of gold

Multiple Choice Single AnswerQuestion 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 shipmentYour Answer Six months from date of shipment

International Finance 3 sem scdl solved paper

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