LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Select The Blank
Question An option on a future is ________.
Correct Answer Derivative on a derivative
Your Answer Derivative on a derivative
Multiple Choice Single Answer
Question Borrower from a developing country can borrow from US market
Correct Answer Only if it has high credit rating and the country's Govt gives a guarantee for the same.
Your Answer Only if it has high credit rating and the country's Govt gives a guarantee for the same.
Select The Blank
Question "Flip-Flop', 'Mini-Max', 'Capped' 'Perpetual' are the various types of ________.
Correct Answer Floating Rate Note (FRN)
Your Answer Floating Rate Note (FRN)
True/False
Question Open Insurance policy is for any amount for specific period and specific number of shipments.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations
Multiple Choice Multiple Answer
Question Which common details will be available in any bill of Lading?
Correct Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment
Your Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment
Multiple Choice Multiple Answer
Question Which of these are considered as miscellaneous documents?
Correct Answer Packing list , Weight certificate
Your Answer Packing list , Weight certificate
Select The Blank
Question The major industrial power whose economy was not affected after the II world war was ________.
Correct Answer USA
Your Answer USA
Multiple Choice Multiple Answer
Question Transaction exposures arises because of :-
Correct Answer The cost of settlement of future payment changes , Receipt denominated in a foreign currency varies due to exchange rate fluctuation
Your Answer The cost of settlement of future payment changes , Receipt denominated in a foreign currency varies due to exchange rate fluctuation
Multiple Choice Multiple Answer
Question World Bank gives loans for
Correct Answer Structural Adjustments , Infrastructure projects , BOP problems
Your Answer Structural Adjustments , Infrastructure projects , BOP problems
Match The Following
Question Correct Answer Your Answer
Maturity of future Time when actual commodity is delivered Time when actual commodity is delivered
Note issuance facility Euronotes Euronotes
Bearer security issued in currency other than that of the country of issue Eurobonds Eurobonds
Margin on future Peformance bond or security deposit Peformance bond or security deposit
Select The Blank
Question Global capital market can be understood from the study of ________.
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Select The Blank
Question The type of trade where a country sells orange juice in return for cars is known as ________.
Correct Answer Counter Trade
Your Answer Counter Trade
Multiple Choice Multiple Answer
Question Who can issue the Certificate of Inspection?
Correct Answer Export Inspection Council , Person authorised by Importer.
Your Answer Export Inspection Council , Person authorised by Importer.
True/False
Question Multimodal transport document is also known as "IntermobileTransport Document"
Correct Answer True
Your Answer True
Select The Blank
Question The currency swaps used ________.
Correct Answer To lower the risk of currency exposure
Your Answer To lower the risk of currency exposure
Select The Blank
Question Over the years ________has been the most widely accepted currency in international capital market.
Correct Answer American Dollar
Your Answer American Dollar
Multiple Choice Multiple Answer
Question The various arms of World Bank are:
Correct Answer International Development Agency , Multinational Investment Guarantee Agency
Your Answer International Development Agency , Multinational Investment Guarantee Agency
Multiple Choice Single Answer
Question In case of forward cover for repayment of foreign currency loan extending over a period of more than six months which type of contract is booked?
Correct Answer Forward sales contract on roll over basis
Your Answer Forward sales contract for the entire period of loan
Multiple Choice Single Answer
Question In the context of International economy ,the period between 1920s and 1930s is known as
Correct Answer Great Depression
Your Answer Great Depression
Multiple Choice Multiple Answer
Question What were the primary objectives of the group of seven countries?
Correct Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries
Your Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries
True/False
Question The American Dollar market comprises of the domestic segment of USD the offshore segment of USD.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Under which category of exchange rate did the Indian Rupee came from June 92?
Correct Answer Other managed Floating
Your Answer Other managed Floating
Multiple Choice Single Answer
Question How many Countries participated in the third survey on Foreign Exchange, coordinated by BIS in 1992?
Correct Answer 26
Your Answer 26
True/False
Question In a coupon swap the receiver is the one who receives fixed rate of interest.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Examples of hedge are:
Correct Answer Buy when you are having short position
Your Answer Buy when you are having short position
Match The Following
Question Correct Answer Your Answer
Intolerable risk Drop the investment project Drop the investment project
Country risk analysis Cost of evluation does not justify analysis Cost of evluation does not justify analysis
Stock market analysis Banks are ahead Banks are ahead
Weightages % Factors' values Factors' values
True/False
Question Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument.
Correct Answer False
Your Answer False
Select The Blank
Question Forward Margin makes a currency costlier then the currency is at ________.
Correct Answer Premium
Your Answer Premium
Multiple Choice Single Answer
Question What maxim is followed by the forex dealer when indirect method of exchange rate quotation is used?
Correct Answer Buy Low, sell High
Your Answer Buy High, Sell Low
Multiple Choice Multiple Answer
Question How does a company use swap to restructure debt, in its balance sheet?
Correct Answer By resorting to floating rate from fixed rate , By resorting to fixed rate from floating rate
Your Answer By resorting to fixed rate from floating rate
Multiple Choice Single Answer
Question Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
True/False
Question Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question The crisis in global capital market in 2002-04 was due to
Correct Answer Collapse of Enron , Collapse of Argentina's currency board , The war against terrorism
Your Answer Collapse of Enron , Collapse of Argentina's currency board , The war against terrorism
Multiple Choice Single Answer
Question To whom is an AD required to report the cancellation of forward contracts?
Correct Answer No one at all.
Your Answer No one at all.
Select The Blank
Question The rate of interest on rupee finance for exports is not exceeding ________ less than PLR.
Correct Answer 0.025
Your Answer 0.025
Multiple Choice Multiple Answer
Question For issuing a Documentary credit The applicant is required to provide to the issuing bank details about
Correct Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents
Your Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents
Multiple Choice Single Answer
Question The severemost problem faced by the Fixed exchange rate system was
Correct Answer Inability of US to change gold for dollars
Your Answer Inability of US to change gold for dollars
Multiple Choice Single Answer
Question Fixed, Floating or Limited flexibility are used in the context of
Correct Answer Exchange Rates
Your Answer Exchange Rates
True/False
Question An exporter expecting payment in$ next month will book a forward purchase contract.
Correct Answer False
Your Answer False
True/False
Question An Indian importing goods from USA pays dollars in India.
Correct Answer False
Your Answer False
Select The Blank
Question EUROCLEAR, CEDEL are the names of ________ related with the issue of GDR.
Correct Answer Registrars
Your Answer Registrars
Multiple Choice Multiple Answer
Question What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Single Answer
Question What is the main purpose of a commercial invoice?
Correct Answer To establish the contract of sale between the two parties.
Your Answer Contains summary of all other documents enclosed
Select The Blank
Question Value of USDollar is ________ in the world market but RBI is trying to match the Rupee value with it.
Correct Answer Depreciating
Your Answer Depreciating
Multiple Choice Multiple Answer
Question Which events can lead to materialisation of country risk?
Correct Answer Change in Government policies , Change in Government rules and laws
Your Answer Change in Government policies , Change in Government rules and laws
True/False
Question Long in futures means a commitment to sell futures at a future date.
Correct Answer False
Your Answer True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple Answer
Question What do you understand by Commercial Risk?
Correct Answer Protracted default by the buyer , Insolvency of the buyer
Your Answer Protracted default by the buyer , Insolvency of the buyer
True/False
Question In a coupon swap the principal amount is identical in the same currency.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question What are the sources of raising funds for exports?
Correct Answer Suppliers credit , Forfaiting
Your Answer Suppliers credit , Forfaiting , Buyers credit , Foreign currency or Rupee finance
True/False
Question The Negotiating bank examines the documents submitted by the seller and makes payment if they comply the terms and conditions of the LC.
Correct Answer True
Your Answer False
Match The Following
Question Correct Answer Your Answer
Issuing Bank Opening Bank Bank guarantee
Stand by credit Bank guarantee Opening Bank
Letter of credit Documentary credit Anticipatory Credit
Bill of exchange Usance Third country currency
Multiple Choice Single Answer
Question What are the powers of restricted money changers?
Correct Answer Purchase foreign currencies
Your Answer Purchase foreign currencies, foreign bills, cheques, against Indian Rupee
Multiple Choice Single Answer
Question Value date means the date on which :-
Correct Answer Delivery of both the currencies will be made
Your Answer The delivery of one of the currencies will be made
True/False
Question Resident Individuals in India can acquire foreign bonus shares on the foreign securities already held by them without prior approval of RBI
Correct Answer True
Your Answer True
Select The Blank
Question Over the years ________has been the most widely accepted currency in international capital market.
Correct Answer American Dollar
Your Answer Deutsche Mark
Select The Blank
Question QA request for additional ________ funds from a customer in a margin call.
Correct Answer Margin
Your Answer Margin
Multiple Choice Multiple Answer
Question The crisis in global capital market in 2002-04 was due to
Correct Answer Collapse of Enron , Collapse of Argentina's currency board , The war against terrorism
Your Answer Collapse of Argentina's currency board , The war against terrorism , Russian and Long term capital management crisis
Select The Blank
Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________.
Correct Answer Shelf Registration
Your Answer Advance Registration
True/False
Question Installment credit is issued for specific quantities of goods to be shipped every week or month.
Correct Answer True
Your Answer True
Select The Blank
Question Forward Margin makes a currency costlier then the currency is at ________.
Correct Answer Premium
Your Answer PAR
Multiple Choice Multiple Answer
Question As per BIS, recovery from the recent crisis in global capital market was mainly due to
Correct Answer Rapid and appropriate policy response in US and other countries , Increase in Foreign Direct Investments , free flow of credit
Your Answer Increase in Foreign Direct Investments , free flow of credit , Devaluation of currencies , Serious Problems in Argentina and Turkey
True/False
Question Sandby credis are introduced by US Banks because they were not permitted to issue on demand guarantees.
Correct Answer True
Your Answer 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
Your Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of shares , Forward contracts and options
True/False
Question In an already booked forward contract, a person may seek early delivery, extension in period, or cancellation.
Correct Answer True
Your Answer False
Select The Blank
Question Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries
Correct Answer OECD
Your Answer ECU
Multiple Choice Single Answer
Question Method of advance payment is not disadvantageous to :-
Correct Answer The seller
Your Answer The buyer
Select The Blank
Question After the second world war many countries adopted the route of ________ to give facelift to sagging economies.
Correct Answer Devaluation of their currencies
Your Answer Devaluation of their currencies
True/False
Question Head office of ICC is in Paris because of its First President Eliance Clementel.
Correct Answer True
Your Answer True
Select The Blank
Question An option on a future is ________.
Correct Answer Derivative on a derivative
Your Answer Irrelevant
True/False
Question In the forward rate quotations between two currencies, when one currency is at discount the other currency is at premium.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question What is the immediate cause for the growth of futures and options in the last two decades?
Correct Answer Increase in volatile trading conditions
Your Answer Increase in volatile trading conditions
Multiple Choice Multiple Answer
Question Which of these are considered as miscellaneous documents?
Correct Answer Packing list , Weight certificate
Your Answer Packing list , Weight certificate
Multiple Choice Single Answer
Question What is the Indian Govt's obligation of becoming member of IMF?
Correct Answer Ensure orderly exchange arrangement, promote stable exchange rate
Your Answer Introduce floating exchange rate mechanism
Select The Blank
Question A Documentary credit issued on the strength of another documentary credit is known as ________.
Correct Answer Back to Back credit
Your Answer With recourse credit
Multiple Choice Single Answer
Question What was the purpose of reviewing FERA 1973 in the year 1993?
Correct Answer Economic Liberalisation relating to Foreign trade and Foreign investments
Your Answer To pave way for Capital account convertibility of Rupee
Multiple Choice Multiple Answer
Question What are the main causes of fluctuations in Exchange rates?
Correct Answer Government regulatios, fiscal policies, political instabilities , Market demand and supply, sentiments
Your Answer Government regulatios, fiscal policies, political instabilities , Market demand and supply, sentiments , The purchasing power of currency changes every second
Multiple Choice Multiple Answer
Question The maximum period for which a forward contract can be granted by the AD depends upon which RBI directives?
Correct Answer Maximum Period of repatriation of export proceeds , Maximum Period of payment for Imports
Your Answer Maximum Period of payment for Imports
Select The Blank
Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme.
Correct Answer Overseas investment facility
Your Answer Overseas investment facility
Select The Blank
Question For importing goods in India RBI insists on ________ value.
Correct Answer CIF
Your Answer CFR
Multiple Choice Single Answer
Question In International trade, Advance payment means :-
Correct Answer Providing up front cash
Your Answer Providing up front cash
Multiple Choice Single Answer
Question In Import financing through trust receipts, with whom does the ownership of goods remain?
Correct Answer Bank releasing the import documents
Your Answer Exporter
Multiple Choice Single Answer
Question When the Indian party holding majority shares in the foreign entity which is less than two years old, intend to set up a second generation company then what formalities will it have to complete?
Correct Answer Seek specific approval from Reserve Bank of India
Your Answer Seek specific approval from Reserve Bank of India
Multiple Choice Single Answer
Question When does a bank have an absolute advantage, in respect of interest rate swaps?
Correct Answer When it has advantage under fixed interest system as well as floating interest rate system
Your Answer When it increases the cost of capital
Multiple Choice Single Answer
Question Which type of finance is available for the full value of the asset, in international trade?
Correct Answer International Leasing
Your Answer Bills sent on collection basis
Multiple Choice Multiple Answer
Question What options does the merchant have while booking a forward contract?
Correct Answer Delivery on a Fixed date, within six months , Delivery on a date between two days separated by a period of maximum one month
Your Answer Delivery on a Fixed date, within six months , Delivery on a date between two days separated by a period of maximum one month , A day within next 1 year
True/False
Question Prior approval of RBI is needed for payment of all imports.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question What are the features of Settlement price ?
Correct Answer Price established by the clearing house at the end of each trading session , It is used to determine the net gain, loss, margin call and next days price limits
Your Answer Price established by the clearing house at the end of each trading session , It is used to determine the net gain, loss, margin call and next days price limits , It is the same as strike price
True/False
Question Normally the forward contracts are booked for making huge profits.
Correct Answer False
Your Answer True
Match The Following
Question Correct Answer Your Answer
PP Form Export Declaration form Risk covering Document
Health Certificate Fumigation certificate Export Promotion Council
Certificate of Inspection As per importers requirement As per importers requirement
Certifiate of Origin Export Promotion Council Fumigation certificate
Multiple Choice Multiple Answer
Question Which contracts are used for transportation by road?
Correct Answer FCA , CPT
Your Answer FCA , CPT , CFR
Multiple Choice Multiple Answer
Question What is the criteria for an Indian Company for Direct Investment abroad?
Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent
Your Answer Activity proposed need to be core activity , Entity abroad is a holding co , Indian co should not have been black listed
Select The Blank
Question In ________ transaction the delivery is postponed from the agreed date.
Correct Answer Rollover
Your Answer Rollover
Multiple Choice Single Answer
Question Proforma Invoice, Commercial Invoice, Consaular Invoice are which type of documents?
Correct Answer Commercial Documents
Your Answer Regulatory Documents
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple Answer
Question Transaction exposures arises because of :-
Correct Answer The cost of settlement of future payment changes , Receipt denominated in a foreign currency varies due to exchange rate fluctuation
Your Answer The cost of settlement of future payment changes , Receipt denominated in a foreign currency varies due to exchange rate fluctuation , The party abroad may not pay
Multiple Choice Single Answer
Question Large number of exporters from which country are enjoying the privilege of receiving up front cash from importers in Russia?
Correct Answer United Kingdom
Your Answer United Kingdom
Select The Blank
Question Under the ________ standard the Country's Central Bank promised to buy back the currency at certain rate of Gold.
Correct Answer Gold
Your Answer Gold
Multiple Choice Multiple Answer
Question The various arms of World Bank are:
Correct Answer International Development Agency , Multinational Investment Guarantee Agency
Your Answer International Development Agency , Asian Development Bank , International Monetary Fund
True/False
Question Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Sterling Market is attractive for an international investor because
Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds
Your Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds
Multiple Choice Single Answer
Question Under which category of exchange rate did the Indian Rupee came from June 92?
Correct Answer Other managed Floating
Your Answer Other managed Floating
Select The Blank
Question To make the export more competitive and remunerative, the Indian Govt extends ________ facility.
Correct Answer Cash Incentives
Your Answer Cash Incentives
Select The Blank
Question The price at which a person may purchase or sell the underlying ________.
Correct Answer Exercise or strike price
Your Answer Market price
Select The Blank
Question Value of USDollar is ________ in the world market but RBI is trying to match the Rupee value with it.
Correct Answer Depreciating
Your Answer Fluctuating
Multiple Choice Single Answer
Question Who are the members of the Special committee on Indian Direct Investments abroad, for normal route?
Correct Answer Representatives of Ministry of finance, Ministry of Economic affairs, Ministry of Commerce and RBI
Your Answer Representatives of Ministry of finance, Ministry of Economic affairs, Ministry of Commerce and RBI
Multiple Choice Multiple Answer
Question The characteristics of an International documentary credit are :-
Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country
Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country
Multiple Choice Multiple Answer
Question Export finance
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Your Answer Preshipment credit , Post shipment credit , Duty Draw back
Select The Blank
Question A Credit can be a confirmed credit only if it is also ________.
Correct Answer An Irrevocable credit
Your Answer An Irrevocable credit
True/False
Question Open Insurance policy is for any amount for specific period and specific number of shipments.
Correct Answer False
Your Answer True
True/False
Question Yankee bond is issued for domestic borrowers.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question How does ECGC protect banker's against risks for export finance?
Correct Answer Issuing various guarantees covering different risks connected with exports at nominal premium
Your Answer Issuing various guarantees covering different risks connected with exports at nominal premium
Match The Following
Question Correct Answer Your Answer
LastStage Form a single currency Meet in Maastricht in Netherland
The First stage in the Europeand and Monetary Union (EMU) Free movement of capital in EC Free movement of capital in EC
Stage II in EMU Establishment of European Monetary Institute Establishment of European Monetary Institute
Stage III in EMU Members to meet the convergence criteria and fix the exchange rates Members to meet the convergence criteria and fix the exchange rates
Multiple Choice Single Answer
Question A Spot Transaction between Japanese Yen and Sterling carried out on Friday in Singapore, the settlement day will be
Correct Answer Following Tuesday if it is a working day in all the three centers
Your Answer Following Monday if it is a working day in all the three centers
Multiple Choice Single Answer
Question How many INCOTERMS are there in "Departure" Group?
Correct Answer One
Your Answer One
Match The Following
Question Correct Answer Your Answer
Treasury management Profit making Hedging instruments
Arbitraging Rate disparity Banks and multinationals
Futures, Options Hedging instruments Speculation
Exchange Rate volatility Speculation Rate disparity
True/False
Question In UK in london Market the Indirect Quote Method is still adopted.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question What is a bill of lading?
Correct Answer Transport document representing movement of goods by water.
Your Answer Transport document representing movement of goods by water.
Select The Blank
Question Exim acts as ________ for Government, RBI and IDBI .
Correct Answer An agent
Your Answer Authorised dealer
Multiple Choice Single Answer
Question How many terms are there under the class " main carriage unpaid"?
Correct Answer Three
Your Answer Four
Multiple Choice Multiple Answer
Question What do you understand by 'Foreign Exchange Risk'?
Correct Answer The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows
Your Answer The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows
Select The Blank
Question The type of trade where a country sells orange juice in return for cars is known as ________.
Correct Answer Counter Trade
Your Answer Counter Trade
True/False
Question Tranche' is a managed issue of securities in smaller denominations.
Correct Answer True
Your Answer True
True/False
Question Floating rate notes are traded in secondary market also.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question What were the primary objectives of the group of seven countries?
Correct Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries
Your Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries , Stop the process of protectionism in USA
Multiple Choice Multiple Answer
Question Which functions does the Bill of Lading serve?
Correct Answer It is a document of title to goods. , It is receipt of goods
Your Answer It is a document of title to goods. , It is receipt of goods
True/False
Question Till August 1994 India was following the Indirect Methodof Rate quotation.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question What are the functions of Export Import Bank of India?
Correct Answer Finance functions and development functions
Your Answer Finance functions and development functions
Multiple Choice Multiple Answer
Question The major cost components of NIF are :-
Correct Answer Underwriters fees , Margins of notes
Your Answer Underwriters fees , Documentation charges , Issue registration fees
Select The Blank
Question The rate of interest on rupee finance for exports is not exceeding ________ less than PLR.
Correct Answer 0.025
Your Answer 0.025
Multiple Choice Multiple Answer
Question For issuing a Documentary credit The applicant is required to provide to the issuing bank details about
Correct Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents
Your Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents
True/False
Question An AD can book a forward contract for a part of the amount of Sale Contract
Correct Answer True
Your Answer True
True/False
Question Transfer of funds for investment abroad is allowed freely.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Which causes may force a country to restrict imports or restrict transfer of payments?
Correct Answer Economic difficulties , Balance of payment problems such as non availability of exchange reserves
Your Answer Economic difficulties , Balance of payment problems such as non availability of exchange reserves , Non availability of appropriate transfer technology with banks
Select The Blank
Question The creditworthiness of the futures seller and the futures buyer is ________ because of the presence of the Futures exchange.
Correct Answer Irrelevant
Your Answer Irrelevant
Multiple Choice Single Answer
Question In case the value date happens to be a holiday then the settlement is done :-
Correct Answer On the next working day
Your Answer On the next working day
Multiple Choice Single Answer
Question What is Risk Syndication facility?
Correct Answer Sharing of risk of non payment by supplier
Your Answer Sharing of risk of non payment by supplier
Multiple Choice Multiple Answer
Question What are the functions of International Finance Corporation?
Correct Answer Help private enterprise by financing projects , Provide technical assistance to private enterprise
Your Answer Help private enterprise by financing projects , Provide technical assistance to private enterprise
Multiple Choice Single Answer
Question Before abandoning the Fixed exchange rate system,the Dollar gold parity was fixed by USA at
Correct Answer USD 35 per Ounce of gold
Your Answer 1 USD , per 35 Ounce of gold
Select The Blank
Question An exchange rate for $ was48.2050, it is now 48.2075, then one says that it has moved ________ basis points
Correct Answer 25
Your Answer 0.0025
Select The Blank
Question The credit which does not constitute a legally binding undertaking between the bank and the beneficiary is ________.
Correct Answer Revocable Credit
Your Answer Revocable Credit
Multiple Choice Single Answer
Question Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
Select The Blank
Question Over the years ________has been the most widely accepted currency in international capital market.
Correct Answer American Dollar
Your Answer American Dollar
True/False
Question Bid rate is bidders buying rate and offered rate is bidders selling rate.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question What is Sovereign Risk?
Correct Answer Risk of lending to the government of a country
Your Answer Risk of lending to the government of a country
Multiple Choice Single Answer
Question Why have futures and options come into existence?
Correct Answer To avoid business risk.
Your Answer To maximise profit
Multiple Choice Single Answer
Question The regulations under FEMA are contained in which manual?
Correct Answer Exchange control Manual
Your Answer FEMA Manual
Multiple Choice Multiple Answer
Question What options does the merchant have while booking a forward contract?
Correct Answer Delivery on a Fixed date, within six months , Delivery on a date between two days separated by a period of maximum one month
Your Answer Delivery on a Fixed date, within six months , Delivery on a date between two days separated by a period of maximum one month
True/False
Question In a coupon swap the principal amount is identical in the same currency.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
True/False
Question Bridge Loans are granted for construction of large size bridges, and flyovers.
Correct Answer False
Your Answer False
Match The Following
Question Correct Answer Your Answer
Swap price Difference in prices of two legs of buying and selling Difference in prices of two legs of buying and selling
Euro Market Market in Euro currencies Market in Euro currencies
Making market Quoting rate for both buying and selling a currency Quoting rate for both buying and selling a currency
Spread Price difference between bid and offer Price difference between bid and offer
Select The Blank
Question QA request for additional ________ funds from a customer in a margin call.
Correct Answer Margin
Your Answer Margin
True/False
Question The American Dollar market comprises of the domestic segment of USD the offshore segment of USD.
Correct Answer True
Your Answer True
Select The Blank
Question Value of USDollar is ________ in the world market but RBI is trying to match the Rupee value with it.
Correct Answer Depreciating
Your Answer Depreciating
Multiple Choice Multiple Answer
Question Why does a Transaction exposure arise?
Correct Answer Trading flows , Dividend or capital flows
Your Answer Valuation of assets and liabilities abroad in financial statements , Present value of future transaction abroad
Multiple Choice Multiple Answer
Question What were the immediate causes of converting the group of 5 into group of 7 and convene their meeting in late 1985?
Correct Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased
Your Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased
Multiple Choice Single Answer
Question Under which category of exchange rate did the Indian Rupee came from June 92?
Correct Answer Other managed Floating
Your Answer Other managed Floating
Multiple Choice Multiple Answer
Question Mr A sells an option conferring the right to buy a kilogram of silver at Rs 8000/- for next six months means :-
Correct Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, in next 6 months, even if the price goes up, , The buyer of option can sell silver to Mr A at 8000/- per Kg, in next 6 months, even if the price goes down.
Your Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, in next 6 months, even if the price goes up, , The buyer of option can sell silver to Mr A at 8000/- per Kg, in next 6 months, even if the price goes down.
Select The Blank
Question Global capital market can be understood from the study of ________.
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
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
True/False
Question Floating rate notes are traded in secondary market also.
Correct Answer True
Your Answer True
True/False
Question At Least one principal Lender bank is essential for issue of the ADR or GDR.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question With whom can an exporter or importer book the forward contract?
Correct Answer Authorised dealer/Authorised person
Your Answer Exchange Brokers
Select The Blank
Question Partnership firm not eligible for Overseas Direct Investment needs to apply to RBI Approval in form ________.
Correct Answer ODI
Your Answer ODC
True/False
Question CFR = FOB plus freight paid by seller + insurance paid by seller.
Correct Answer False
Your Answer False
Select The Blank
Question In ________ contract, though seller pays the freight, seller's risk is not extended till destination.
Correct Answer CIF
Your Answer CIF
Select The Blank
Question The rate of interest on rupee finance for exports is not exceeding ________ less than PLR.
Correct Answer 0.025
Your Answer 0.025
Select The Blank
Question ________ is the agency of ICC which deals with the maritime crime.
Correct Answer International Maritime Bureau
Your Answer International Maritime Bureau
Select The Blank
Question Any company involved in foreign exchange transactions is exposed to ________ risk.
Correct Answer Currency
Your Answer Currency
Multiple Choice Multiple Answer
Question What are the main causes of fluctuations in Exchange rates?
Correct Answer Government regulatios, fiscal policies, political instabilities , Market demand and supply, sentiments
Your Answer Government regulatios, fiscal policies, political instabilities , Market demand and supply, sentiments
Select The Blank
Question Fixed interest rate Eurobond without the option to convert to equity is known as ________.
Correct Answer Straight Debt
Your Answer Straight Debt
Multiple Choice Multiple Answer
Question Sterling Market is attractive for an international investor because
Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds
Your Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds
True/False
Question Cross currency forward contract is not meaningful if original contract is in Rupees to USD
Correct Answer True
Your Answer True
True/False
Question Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations
True/False
Question Yankee bond is issued for domestic borrowers.
Correct Answer False
Your Answer True
Multiple Choice Single Answer
Question How many Countries participated in the third survey on Foreign Exchange, coordinated by BIS in 1992?
Correct Answer 26
Your Answer 26
Multiple Choice Multiple Answer
Question What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Multiple Answer
Question A Forward purchase contract was booked with an authorised dealer and subsequently cancelled .It :-
Correct Answer Can be booked again with another dealer , Can be booked again with the same dealer
Your Answer Can be booked again with another dealer , Can be booked again with the same dealer
Multiple Choice Single Answer
Question The capital market is said to be volatile when
Correct Answer Prices of capital market instruments change and are expected to change drastically
Your Answer Prices of capital market instruments change and are expected to change drastically
Multiple Choice Single Answer
Question The severemost problem faced by the Fixed exchange rate system was
Correct Answer Inability of US to change gold for dollars
Your Answer Inability of US to change gold for dollars
True/False
Question In forward sales, the delivery refers to actual cash flows on due date.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question World Bank gives loans for
Correct Answer Structural Adjustments , Infrastructure projects , BOP problems
Your Answer Structural Adjustments , Infrastructure projects , BOP problems , Long term Working capital
Multiple Choice Single Answer
Question Exchange Rate means
Correct Answer Value of one currency in terms of another
Your Answer Value of gold in terms of currency
Multiple Choice Multiple Answer
Question As regards the due date of an Option exercise which methods are in vogue?
Correct Answer American option , European Option
Your Answer American option , European Option , Exercise date , Asian Option
Multiple Choice Single Answer
Question In the syndicated loan arrangement the borrower has to execute :-
Correct Answer Single Principal loan agreement
Your Answer Single Principal loan agreement
Select The Blank
Question Forward Margin makes a currency costlier then the currency is at ________.
Correct Answer Premium
Your Answer Premium
Match The Following
Question Correct Answer Your Answer
Bond basis to money market basis Bond basisx 360/365 Bond basisx 360/365
3 months LIBOR +2 % PA Floating rate Floating for floating rate currency swap
15% P.A. Fixed rate Money market basis x 365/360
Money market basis to bond basis Money market basis x 365/360 Floating rate
Select The Blank
Question An option on a future is ________.
Correct Answer Derivative on a derivative
Your Answer Derivative on a derivative
Multiple Choice Single Answer
Question Borrower from a developing country can borrow from US market
Correct Answer Only if it has high credit rating and the country's Govt gives a guarantee for the same.
Your Answer Only if it has high credit rating and the country's Govt gives a guarantee for the same.
Select The Blank
Question "Flip-Flop', 'Mini-Max', 'Capped' 'Perpetual' are the various types of ________.
Correct Answer Floating Rate Note (FRN)
Your Answer Floating Rate Note (FRN)
True/False
Question Open Insurance policy is for any amount for specific period and specific number of shipments.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations
Multiple Choice Multiple Answer
Question Which common details will be available in any bill of Lading?
Correct Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment
Your Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment
Multiple Choice Multiple Answer
Question Which of these are considered as miscellaneous documents?
Correct Answer Packing list , Weight certificate
Your Answer Packing list , Weight certificate
Select The Blank
Question The major industrial power whose economy was not affected after the II world war was ________.
Correct Answer USA
Your Answer USA
Multiple Choice Multiple Answer
Question Transaction exposures arises because of :-
Correct Answer The cost of settlement of future payment changes , Receipt denominated in a foreign currency varies due to exchange rate fluctuation
Your Answer The cost of settlement of future payment changes , Receipt denominated in a foreign currency varies due to exchange rate fluctuation
Multiple Choice Multiple Answer
Question World Bank gives loans for
Correct Answer Structural Adjustments , Infrastructure projects , BOP problems
Your Answer Structural Adjustments , Infrastructure projects , BOP problems
Match The Following
Question Correct Answer Your Answer
Maturity of future Time when actual commodity is delivered Time when actual commodity is delivered
Note issuance facility Euronotes Euronotes
Bearer security issued in currency other than that of the country of issue Eurobonds Eurobonds
Margin on future Peformance bond or security deposit Peformance bond or security deposit
Select The Blank
Question Global capital market can be understood from the study of ________.
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Select The Blank
Question The type of trade where a country sells orange juice in return for cars is known as ________.
Correct Answer Counter Trade
Your Answer Counter Trade
Multiple Choice Multiple Answer
Question Who can issue the Certificate of Inspection?
Correct Answer Export Inspection Council , Person authorised by Importer.
Your Answer Export Inspection Council , Person authorised by Importer.
True/False
Question Multimodal transport document is also known as "IntermobileTransport Document"
Correct Answer True
Your Answer True
Select The Blank
Question The currency swaps used ________.
Correct Answer To lower the risk of currency exposure
Your Answer To lower the risk of currency exposure
Select The Blank
Question Over the years ________has been the most widely accepted currency in international capital market.
Correct Answer American Dollar
Your Answer American Dollar
Multiple Choice Multiple Answer
Question The various arms of World Bank are:
Correct Answer International Development Agency , Multinational Investment Guarantee Agency
Your Answer International Development Agency , Multinational Investment Guarantee Agency
Multiple Choice Single Answer
Question In case of forward cover for repayment of foreign currency loan extending over a period of more than six months which type of contract is booked?
Correct Answer Forward sales contract on roll over basis
Your Answer Forward sales contract for the entire period of loan
Multiple Choice Single Answer
Question In the context of International economy ,the period between 1920s and 1930s is known as
Correct Answer Great Depression
Your Answer Great Depression
Multiple Choice Multiple Answer
Question What were the primary objectives of the group of seven countries?
Correct Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries
Your Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries
True/False
Question The American Dollar market comprises of the domestic segment of USD the offshore segment of USD.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Under which category of exchange rate did the Indian Rupee came from June 92?
Correct Answer Other managed Floating
Your Answer Other managed Floating
Multiple Choice Single Answer
Question How many Countries participated in the third survey on Foreign Exchange, coordinated by BIS in 1992?
Correct Answer 26
Your Answer 26
True/False
Question In a coupon swap the receiver is the one who receives fixed rate of interest.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Examples of hedge are:
Correct Answer Buy when you are having short position
Your Answer Buy when you are having short position
Match The Following
Question Correct Answer Your Answer
Intolerable risk Drop the investment project Drop the investment project
Country risk analysis Cost of evluation does not justify analysis Cost of evluation does not justify analysis
Stock market analysis Banks are ahead Banks are ahead
Weightages % Factors' values Factors' values
True/False
Question Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument.
Correct Answer False
Your Answer False
Select The Blank
Question Forward Margin makes a currency costlier then the currency is at ________.
Correct Answer Premium
Your Answer Premium
Multiple Choice Single Answer
Question What maxim is followed by the forex dealer when indirect method of exchange rate quotation is used?
Correct Answer Buy Low, sell High
Your Answer Buy High, Sell Low
Multiple Choice Multiple Answer
Question How does a company use swap to restructure debt, in its balance sheet?
Correct Answer By resorting to floating rate from fixed rate , By resorting to fixed rate from floating rate
Your Answer By resorting to fixed rate from floating rate
Multiple Choice Single Answer
Question Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
True/False
Question Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question The crisis in global capital market in 2002-04 was due to
Correct Answer Collapse of Enron , Collapse of Argentina's currency board , The war against terrorism
Your Answer Collapse of Enron , Collapse of Argentina's currency board , The war against terrorism
Multiple Choice Single Answer
Question To whom is an AD required to report the cancellation of forward contracts?
Correct Answer No one at all.
Your Answer No one at all.
Select The Blank
Question The rate of interest on rupee finance for exports is not exceeding ________ less than PLR.
Correct Answer 0.025
Your Answer 0.025
Multiple Choice Multiple Answer
Question For issuing a Documentary credit The applicant is required to provide to the issuing bank details about
Correct Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents
Your Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents
Multiple Choice Single Answer
Question The severemost problem faced by the Fixed exchange rate system was
Correct Answer Inability of US to change gold for dollars
Your Answer Inability of US to change gold for dollars
Multiple Choice Single Answer
Question Fixed, Floating or Limited flexibility are used in the context of
Correct Answer Exchange Rates
Your Answer Exchange Rates
True/False
Question An exporter expecting payment in$ next month will book a forward purchase contract.
Correct Answer False
Your Answer False
True/False
Question An Indian importing goods from USA pays dollars in India.
Correct Answer False
Your Answer False
Select The Blank
Question EUROCLEAR, CEDEL are the names of ________ related with the issue of GDR.
Correct Answer Registrars
Your Answer Registrars
Multiple Choice Multiple Answer
Question What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Single Answer
Question What is the main purpose of a commercial invoice?
Correct Answer To establish the contract of sale between the two parties.
Your Answer Contains summary of all other documents enclosed
Select The Blank
Question Value of USDollar is ________ in the world market but RBI is trying to match the Rupee value with it.
Correct Answer Depreciating
Your Answer Depreciating
Multiple Choice Multiple Answer
Question Which events can lead to materialisation of country risk?
Correct Answer Change in Government policies , Change in Government rules and laws
Your Answer Change in Government policies , Change in Government rules and laws
True/False
Question Long in futures means a commitment to sell futures at a future date.
Correct Answer False
Your Answer True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple Answer
Question What do you understand by Commercial Risk?
Correct Answer Protracted default by the buyer , Insolvency of the buyer
Your Answer Protracted default by the buyer , Insolvency of the buyer
True/False
Question In a coupon swap the principal amount is identical in the same currency.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question What are the sources of raising funds for exports?
Correct Answer Suppliers credit , Forfaiting
Your Answer Suppliers credit , Forfaiting , Buyers credit , Foreign currency or Rupee finance
True/False
Question The Negotiating bank examines the documents submitted by the seller and makes payment if they comply the terms and conditions of the LC.
Correct Answer True
Your Answer False
Match The Following
Question Correct Answer Your Answer
Issuing Bank Opening Bank Bank guarantee
Stand by credit Bank guarantee Opening Bank
Letter of credit Documentary credit Anticipatory Credit
Bill of exchange Usance Third country currency
Multiple Choice Single Answer
Question What are the powers of restricted money changers?
Correct Answer Purchase foreign currencies
Your Answer Purchase foreign currencies, foreign bills, cheques, against Indian Rupee
Multiple Choice Single Answer
Question Value date means the date on which :-
Correct Answer Delivery of both the currencies will be made
Your Answer The delivery of one of the currencies will be made
True/False
Question Resident Individuals in India can acquire foreign bonus shares on the foreign securities already held by them without prior approval of RBI
Correct Answer True
Your Answer True
Select The Blank
Question Over the years ________has been the most widely accepted currency in international capital market.
Correct Answer American Dollar
Your Answer Deutsche Mark
Select The Blank
Question QA request for additional ________ funds from a customer in a margin call.
Correct Answer Margin
Your Answer Margin
Multiple Choice Multiple Answer
Question The crisis in global capital market in 2002-04 was due to
Correct Answer Collapse of Enron , Collapse of Argentina's currency board , The war against terrorism
Your Answer Collapse of Argentina's currency board , The war against terrorism , Russian and Long term capital management crisis
Select The Blank
Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________.
Correct Answer Shelf Registration
Your Answer Advance Registration
True/False
Question Installment credit is issued for specific quantities of goods to be shipped every week or month.
Correct Answer True
Your Answer True
Select The Blank
Question Forward Margin makes a currency costlier then the currency is at ________.
Correct Answer Premium
Your Answer PAR
Multiple Choice Multiple Answer
Question As per BIS, recovery from the recent crisis in global capital market was mainly due to
Correct Answer Rapid and appropriate policy response in US and other countries , Increase in Foreign Direct Investments , free flow of credit
Your Answer Increase in Foreign Direct Investments , free flow of credit , Devaluation of currencies , Serious Problems in Argentina and Turkey
True/False
Question Sandby credis are introduced by US Banks because they were not permitted to issue on demand guarantees.
Correct Answer True
Your Answer 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
Your Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of shares , Forward contracts and options
True/False
Question In an already booked forward contract, a person may seek early delivery, extension in period, or cancellation.
Correct Answer True
Your Answer False
Select The Blank
Question Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries
Correct Answer OECD
Your Answer ECU
Multiple Choice Single Answer
Question Method of advance payment is not disadvantageous to :-
Correct Answer The seller
Your Answer The buyer
Select The Blank
Question After the second world war many countries adopted the route of ________ to give facelift to sagging economies.
Correct Answer Devaluation of their currencies
Your Answer Devaluation of their currencies
True/False
Question Head office of ICC is in Paris because of its First President Eliance Clementel.
Correct Answer True
Your Answer True
Select The Blank
Question An option on a future is ________.
Correct Answer Derivative on a derivative
Your Answer Irrelevant
True/False
Question In the forward rate quotations between two currencies, when one currency is at discount the other currency is at premium.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question What is the immediate cause for the growth of futures and options in the last two decades?
Correct Answer Increase in volatile trading conditions
Your Answer Increase in volatile trading conditions
Multiple Choice Multiple Answer
Question Which of these are considered as miscellaneous documents?
Correct Answer Packing list , Weight certificate
Your Answer Packing list , Weight certificate
Multiple Choice Single Answer
Question What is the Indian Govt's obligation of becoming member of IMF?
Correct Answer Ensure orderly exchange arrangement, promote stable exchange rate
Your Answer Introduce floating exchange rate mechanism
Select The Blank
Question A Documentary credit issued on the strength of another documentary credit is known as ________.
Correct Answer Back to Back credit
Your Answer With recourse credit
Multiple Choice Single Answer
Question What was the purpose of reviewing FERA 1973 in the year 1993?
Correct Answer Economic Liberalisation relating to Foreign trade and Foreign investments
Your Answer To pave way for Capital account convertibility of Rupee
Multiple Choice Multiple Answer
Question What are the main causes of fluctuations in Exchange rates?
Correct Answer Government regulatios, fiscal policies, political instabilities , Market demand and supply, sentiments
Your Answer Government regulatios, fiscal policies, political instabilities , Market demand and supply, sentiments , The purchasing power of currency changes every second
Multiple Choice Multiple Answer
Question The maximum period for which a forward contract can be granted by the AD depends upon which RBI directives?
Correct Answer Maximum Period of repatriation of export proceeds , Maximum Period of payment for Imports
Your Answer Maximum Period of payment for Imports
Select The Blank
Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme.
Correct Answer Overseas investment facility
Your Answer Overseas investment facility
Select The Blank
Question For importing goods in India RBI insists on ________ value.
Correct Answer CIF
Your Answer CFR
Multiple Choice Single Answer
Question In International trade, Advance payment means :-
Correct Answer Providing up front cash
Your Answer Providing up front cash
Multiple Choice Single Answer
Question In Import financing through trust receipts, with whom does the ownership of goods remain?
Correct Answer Bank releasing the import documents
Your Answer Exporter
Multiple Choice Single Answer
Question When the Indian party holding majority shares in the foreign entity which is less than two years old, intend to set up a second generation company then what formalities will it have to complete?
Correct Answer Seek specific approval from Reserve Bank of India
Your Answer Seek specific approval from Reserve Bank of India
Multiple Choice Single Answer
Question When does a bank have an absolute advantage, in respect of interest rate swaps?
Correct Answer When it has advantage under fixed interest system as well as floating interest rate system
Your Answer When it increases the cost of capital
Multiple Choice Single Answer
Question Which type of finance is available for the full value of the asset, in international trade?
Correct Answer International Leasing
Your Answer Bills sent on collection basis
Multiple Choice Multiple Answer
Question What options does the merchant have while booking a forward contract?
Correct Answer Delivery on a Fixed date, within six months , Delivery on a date between two days separated by a period of maximum one month
Your Answer Delivery on a Fixed date, within six months , Delivery on a date between two days separated by a period of maximum one month , A day within next 1 year
True/False
Question Prior approval of RBI is needed for payment of all imports.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question What are the features of Settlement price ?
Correct Answer Price established by the clearing house at the end of each trading session , It is used to determine the net gain, loss, margin call and next days price limits
Your Answer Price established by the clearing house at the end of each trading session , It is used to determine the net gain, loss, margin call and next days price limits , It is the same as strike price
True/False
Question Normally the forward contracts are booked for making huge profits.
Correct Answer False
Your Answer True
Match The Following
Question Correct Answer Your Answer
PP Form Export Declaration form Risk covering Document
Health Certificate Fumigation certificate Export Promotion Council
Certificate of Inspection As per importers requirement As per importers requirement
Certifiate of Origin Export Promotion Council Fumigation certificate
Multiple Choice Multiple Answer
Question Which contracts are used for transportation by road?
Correct Answer FCA , CPT
Your Answer FCA , CPT , CFR
Multiple Choice Multiple Answer
Question What is the criteria for an Indian Company for Direct Investment abroad?
Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent
Your Answer Activity proposed need to be core activity , Entity abroad is a holding co , Indian co should not have been black listed
Select The Blank
Question In ________ transaction the delivery is postponed from the agreed date.
Correct Answer Rollover
Your Answer Rollover
Multiple Choice Single Answer
Question Proforma Invoice, Commercial Invoice, Consaular Invoice are which type of documents?
Correct Answer Commercial Documents
Your Answer Regulatory Documents
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple Answer
Question Transaction exposures arises because of :-
Correct Answer The cost of settlement of future payment changes , Receipt denominated in a foreign currency varies due to exchange rate fluctuation
Your Answer The cost of settlement of future payment changes , Receipt denominated in a foreign currency varies due to exchange rate fluctuation , The party abroad may not pay
Multiple Choice Single Answer
Question Large number of exporters from which country are enjoying the privilege of receiving up front cash from importers in Russia?
Correct Answer United Kingdom
Your Answer United Kingdom
Select The Blank
Question Under the ________ standard the Country's Central Bank promised to buy back the currency at certain rate of Gold.
Correct Answer Gold
Your Answer Gold
Multiple Choice Multiple Answer
Question The various arms of World Bank are:
Correct Answer International Development Agency , Multinational Investment Guarantee Agency
Your Answer International Development Agency , Asian Development Bank , International Monetary Fund
True/False
Question Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Sterling Market is attractive for an international investor because
Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds
Your Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds
Multiple Choice Single Answer
Question Under which category of exchange rate did the Indian Rupee came from June 92?
Correct Answer Other managed Floating
Your Answer Other managed Floating
Select The Blank
Question To make the export more competitive and remunerative, the Indian Govt extends ________ facility.
Correct Answer Cash Incentives
Your Answer Cash Incentives
Select The Blank
Question The price at which a person may purchase or sell the underlying ________.
Correct Answer Exercise or strike price
Your Answer Market price
Select The Blank
Question Value of USDollar is ________ in the world market but RBI is trying to match the Rupee value with it.
Correct Answer Depreciating
Your Answer Fluctuating
Multiple Choice Single Answer
Question Who are the members of the Special committee on Indian Direct Investments abroad, for normal route?
Correct Answer Representatives of Ministry of finance, Ministry of Economic affairs, Ministry of Commerce and RBI
Your Answer Representatives of Ministry of finance, Ministry of Economic affairs, Ministry of Commerce and RBI
Multiple Choice Multiple Answer
Question The characteristics of an International documentary credit are :-
Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country
Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country
Multiple Choice Multiple Answer
Question Export finance
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Your Answer Preshipment credit , Post shipment credit , Duty Draw back
Select The Blank
Question A Credit can be a confirmed credit only if it is also ________.
Correct Answer An Irrevocable credit
Your Answer An Irrevocable credit
True/False
Question Open Insurance policy is for any amount for specific period and specific number of shipments.
Correct Answer False
Your Answer True
True/False
Question Yankee bond is issued for domestic borrowers.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question How does ECGC protect banker's against risks for export finance?
Correct Answer Issuing various guarantees covering different risks connected with exports at nominal premium
Your Answer Issuing various guarantees covering different risks connected with exports at nominal premium
Match The Following
Question Correct Answer Your Answer
LastStage Form a single currency Meet in Maastricht in Netherland
The First stage in the Europeand and Monetary Union (EMU) Free movement of capital in EC Free movement of capital in EC
Stage II in EMU Establishment of European Monetary Institute Establishment of European Monetary Institute
Stage III in EMU Members to meet the convergence criteria and fix the exchange rates Members to meet the convergence criteria and fix the exchange rates
Multiple Choice Single Answer
Question A Spot Transaction between Japanese Yen and Sterling carried out on Friday in Singapore, the settlement day will be
Correct Answer Following Tuesday if it is a working day in all the three centers
Your Answer Following Monday if it is a working day in all the three centers
Multiple Choice Single Answer
Question How many INCOTERMS are there in "Departure" Group?
Correct Answer One
Your Answer One
Match The Following
Question Correct Answer Your Answer
Treasury management Profit making Hedging instruments
Arbitraging Rate disparity Banks and multinationals
Futures, Options Hedging instruments Speculation
Exchange Rate volatility Speculation Rate disparity
True/False
Question In UK in london Market the Indirect Quote Method is still adopted.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question What is a bill of lading?
Correct Answer Transport document representing movement of goods by water.
Your Answer Transport document representing movement of goods by water.
Select The Blank
Question Exim acts as ________ for Government, RBI and IDBI .
Correct Answer An agent
Your Answer Authorised dealer
Multiple Choice Single Answer
Question How many terms are there under the class " main carriage unpaid"?
Correct Answer Three
Your Answer Four
Multiple Choice Multiple Answer
Question What do you understand by 'Foreign Exchange Risk'?
Correct Answer The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows
Your Answer The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows
Select The Blank
Question The type of trade where a country sells orange juice in return for cars is known as ________.
Correct Answer Counter Trade
Your Answer Counter Trade
True/False
Question Tranche' is a managed issue of securities in smaller denominations.
Correct Answer True
Your Answer True
True/False
Question Floating rate notes are traded in secondary market also.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question What were the primary objectives of the group of seven countries?
Correct Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries
Your Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries , Stop the process of protectionism in USA
Multiple Choice Multiple Answer
Question Which functions does the Bill of Lading serve?
Correct Answer It is a document of title to goods. , It is receipt of goods
Your Answer It is a document of title to goods. , It is receipt of goods
True/False
Question Till August 1994 India was following the Indirect Methodof Rate quotation.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question What are the functions of Export Import Bank of India?
Correct Answer Finance functions and development functions
Your Answer Finance functions and development functions
Multiple Choice Multiple Answer
Question The major cost components of NIF are :-
Correct Answer Underwriters fees , Margins of notes
Your Answer Underwriters fees , Documentation charges , Issue registration fees
Select The Blank
Question The rate of interest on rupee finance for exports is not exceeding ________ less than PLR.
Correct Answer 0.025
Your Answer 0.025
Multiple Choice Multiple Answer
Question For issuing a Documentary credit The applicant is required to provide to the issuing bank details about
Correct Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents
Your Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents
True/False
Question An AD can book a forward contract for a part of the amount of Sale Contract
Correct Answer True
Your Answer True
True/False
Question Transfer of funds for investment abroad is allowed freely.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Which causes may force a country to restrict imports or restrict transfer of payments?
Correct Answer Economic difficulties , Balance of payment problems such as non availability of exchange reserves
Your Answer Economic difficulties , Balance of payment problems such as non availability of exchange reserves , Non availability of appropriate transfer technology with banks
Select The Blank
Question The creditworthiness of the futures seller and the futures buyer is ________ because of the presence of the Futures exchange.
Correct Answer Irrelevant
Your Answer Irrelevant
Multiple Choice Single Answer
Question In case the value date happens to be a holiday then the settlement is done :-
Correct Answer On the next working day
Your Answer On the next working day
Multiple Choice Single Answer
Question What is Risk Syndication facility?
Correct Answer Sharing of risk of non payment by supplier
Your Answer Sharing of risk of non payment by supplier
Multiple Choice Multiple Answer
Question What are the functions of International Finance Corporation?
Correct Answer Help private enterprise by financing projects , Provide technical assistance to private enterprise
Your Answer Help private enterprise by financing projects , Provide technical assistance to private enterprise
Multiple Choice Single Answer
Question Before abandoning the Fixed exchange rate system,the Dollar gold parity was fixed by USA at
Correct Answer USD 35 per Ounce of gold
Your Answer 1 USD , per 35 Ounce of gold
Select The Blank
Question An exchange rate for $ was48.2050, it is now 48.2075, then one says that it has moved ________ basis points
Correct Answer 25
Your Answer 0.0025
Select The Blank
Question The credit which does not constitute a legally binding undertaking between the bank and the beneficiary is ________.
Correct Answer Revocable Credit
Your Answer Revocable Credit
Multiple Choice Single Answer
Question Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
Select The Blank
Question Over the years ________has been the most widely accepted currency in international capital market.
Correct Answer American Dollar
Your Answer American Dollar
True/False
Question Bid rate is bidders buying rate and offered rate is bidders selling rate.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question What is Sovereign Risk?
Correct Answer Risk of lending to the government of a country
Your Answer Risk of lending to the government of a country
Multiple Choice Single Answer
Question Why have futures and options come into existence?
Correct Answer To avoid business risk.
Your Answer To maximise profit
Multiple Choice Single Answer
Question The regulations under FEMA are contained in which manual?
Correct Answer Exchange control Manual
Your Answer FEMA Manual
Multiple Choice Multiple Answer
Question What options does the merchant have while booking a forward contract?
Correct Answer Delivery on a Fixed date, within six months , Delivery on a date between two days separated by a period of maximum one month
Your Answer Delivery on a Fixed date, within six months , Delivery on a date between two days separated by a period of maximum one month
True/False
Question In a coupon swap the principal amount is identical in the same currency.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
True/False
Question Bridge Loans are granted for construction of large size bridges, and flyovers.
Correct Answer False
Your Answer False
Match The Following
Question Correct Answer Your Answer
Swap price Difference in prices of two legs of buying and selling Difference in prices of two legs of buying and selling
Euro Market Market in Euro currencies Market in Euro currencies
Making market Quoting rate for both buying and selling a currency Quoting rate for both buying and selling a currency
Spread Price difference between bid and offer Price difference between bid and offer
Select The Blank
Question QA request for additional ________ funds from a customer in a margin call.
Correct Answer Margin
Your Answer Margin
True/False
Question The American Dollar market comprises of the domestic segment of USD the offshore segment of USD.
Correct Answer True
Your Answer True
Select The Blank
Question Value of USDollar is ________ in the world market but RBI is trying to match the Rupee value with it.
Correct Answer Depreciating
Your Answer Depreciating
Multiple Choice Multiple Answer
Question Why does a Transaction exposure arise?
Correct Answer Trading flows , Dividend or capital flows
Your Answer Valuation of assets and liabilities abroad in financial statements , Present value of future transaction abroad
Multiple Choice Multiple Answer
Question What were the immediate causes of converting the group of 5 into group of 7 and convene their meeting in late 1985?
Correct Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased
Your Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased
Multiple Choice Single Answer
Question Under which category of exchange rate did the Indian Rupee came from June 92?
Correct Answer Other managed Floating
Your Answer Other managed Floating
Multiple Choice Multiple Answer
Question Mr A sells an option conferring the right to buy a kilogram of silver at Rs 8000/- for next six months means :-
Correct Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, in next 6 months, even if the price goes up, , The buyer of option can sell silver to Mr A at 8000/- per Kg, in next 6 months, even if the price goes down.
Your Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, in next 6 months, even if the price goes up, , The buyer of option can sell silver to Mr A at 8000/- per Kg, in next 6 months, even if the price goes down.
Select The Blank
Question Global capital market can be understood from the study of ________.
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
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
True/False
Question Floating rate notes are traded in secondary market also.
Correct Answer True
Your Answer True
True/False
Question At Least one principal Lender bank is essential for issue of the ADR or GDR.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question With whom can an exporter or importer book the forward contract?
Correct Answer Authorised dealer/Authorised person
Your Answer Exchange Brokers
Select The Blank
Question Partnership firm not eligible for Overseas Direct Investment needs to apply to RBI Approval in form ________.
Correct Answer ODI
Your Answer ODC
True/False
Question CFR = FOB plus freight paid by seller + insurance paid by seller.
Correct Answer False
Your Answer False
Select The Blank
Question In ________ contract, though seller pays the freight, seller's risk is not extended till destination.
Correct Answer CIF
Your Answer CIF
Select The Blank
Question The rate of interest on rupee finance for exports is not exceeding ________ less than PLR.
Correct Answer 0.025
Your Answer 0.025
Select The Blank
Question ________ is the agency of ICC which deals with the maritime crime.
Correct Answer International Maritime Bureau
Your Answer International Maritime Bureau
Select The Blank
Question Any company involved in foreign exchange transactions is exposed to ________ risk.
Correct Answer Currency
Your Answer Currency
Multiple Choice Multiple Answer
Question What are the main causes of fluctuations in Exchange rates?
Correct Answer Government regulatios, fiscal policies, political instabilities , Market demand and supply, sentiments
Your Answer Government regulatios, fiscal policies, political instabilities , Market demand and supply, sentiments
Select The Blank
Question Fixed interest rate Eurobond without the option to convert to equity is known as ________.
Correct Answer Straight Debt
Your Answer Straight Debt
Multiple Choice Multiple Answer
Question Sterling Market is attractive for an international investor because
Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds
Your Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds
True/False
Question Cross currency forward contract is not meaningful if original contract is in Rupees to USD
Correct Answer True
Your Answer True
True/False
Question Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations
True/False
Question Yankee bond is issued for domestic borrowers.
Correct Answer False
Your Answer True
Multiple Choice Single Answer
Question How many Countries participated in the third survey on Foreign Exchange, coordinated by BIS in 1992?
Correct Answer 26
Your Answer 26
Multiple Choice Multiple Answer
Question What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Multiple Answer
Question A Forward purchase contract was booked with an authorised dealer and subsequently cancelled .It :-
Correct Answer Can be booked again with another dealer , Can be booked again with the same dealer
Your Answer Can be booked again with another dealer , Can be booked again with the same dealer
Multiple Choice Single Answer
Question The capital market is said to be volatile when
Correct Answer Prices of capital market instruments change and are expected to change drastically
Your Answer Prices of capital market instruments change and are expected to change drastically
Multiple Choice Single Answer
Question The severemost problem faced by the Fixed exchange rate system was
Correct Answer Inability of US to change gold for dollars
Your Answer Inability of US to change gold for dollars
True/False
Question In forward sales, the delivery refers to actual cash flows on due date.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question World Bank gives loans for
Correct Answer Structural Adjustments , Infrastructure projects , BOP problems
Your Answer Structural Adjustments , Infrastructure projects , BOP problems , Long term Working capital
Multiple Choice Single Answer
Question Exchange Rate means
Correct Answer Value of one currency in terms of another
Your Answer Value of gold in terms of currency
Multiple Choice Multiple Answer
Question As regards the due date of an Option exercise which methods are in vogue?
Correct Answer American option , European Option
Your Answer American option , European Option , Exercise date , Asian Option
Multiple Choice Single Answer
Question In the syndicated loan arrangement the borrower has to execute :-
Correct Answer Single Principal loan agreement
Your Answer Single Principal loan agreement
Select The Blank
Question Forward Margin makes a currency costlier then the currency is at ________.
Correct Answer Premium
Your Answer Premium
Match The Following
Question Correct Answer Your Answer
Bond basis to money market basis Bond basisx 360/365 Bond basisx 360/365
3 months LIBOR +2 % PA Floating rate Floating for floating rate currency swap
15% P.A. Fixed rate Money market basis x 365/360
Money market basis to bond basis Money market basis x 365/360 Floating rate
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