LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations
Correct Answer True
Your Answer True
True/False
Question JV means Joint venture and WOS means World of Security.
Correct Answer False
Your Answer False
Select The Blank
Question The rate of interest on rupee finance for exports is not exceeding ________ less than PLR.
Correct Answer 0.025
Your Answer 50 basis points over LIBOR
Multiple Choice Multiple Answer
Question What does a speculator accept while dealing with an option?
Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of payment
Your Answer The exercise or strike price, the amount , The expiration date and time, the method of payment
Multiple Choice Single Answer
Question In the syndicated loan arrangement the borrower has to execute :-
Correct Answer Single Principal loan agreement
Your Answer Single Principal loan agreement
True/False
Question At Least one principal Lender bank is essential for issue of the ADR or GDR.
Correct Answer False
Your Answer True
Multiple Choice Single Answer
Question US financial system is the freest system because
Correct Answer Institutions can introduce new products and instuments at the price of their choice.
Your Answer Institutions can introduce new products and instuments at the price of their choice.
Multiple Choice Single Answer
Question In a coupon swap who is called the buyer?
Correct Answer One who pays the fixed rate of interest
Your Answer One who pays the fixed rate of interest
True/False
Question Till August 1994 India was following the Indirect Methodof Rate quotation.
Correct Answer False
Your Answer False
Select The Blank
Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme.
Correct Answer Overseas investment facility
Your Answer Overseas investment facility
Multiple Choice Single Answer
Question Under the automatic route of Direct Investment Abroad, what is the restriction on market purchases?
Correct Answer 50% of the net worth of the investing company
Your Answer 50% of the net worth of the investing company
Multiple Choice Single Answer
Question What are the powers of money changers?
Correct Answer Purchase and sell foreign currency notes and travellers cheques
Your Answer Purchase and sell foreign currency notes and travellers cheques and also Give export finance
Select The Blank
Question Any company involved in foreign exchange transactions is exposed to ________ risk.
Correct Answer Currency
Your Answer Currency
Multiple Choice Multiple Answer
Question What are the features of Settlement price ?
Correct Answer Price established by the clearing house at the end of each trading session , It is used to determine the net gain, loss, margin call and next days price limits
Your Answer Price established by the clearing house at the end of each trading session , It is used to determine the net gain, loss, margin call and next days price limits
Multiple Choice Multiple Answer
Question What are the activities of ICC?
Correct Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime
Your Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime , Increased Govt regulation of Business
True/False
Question Cause of increase in cost of public issues Underwriting fees , selling commission
Correct Answer True
Your Answer False
Select The Blank
Question The currency swaps used ________.
Correct Answer To lower the risk of currency exposure
Your Answer To lower the risk of currency exposure
True/False
Question The Option period in the forward contract is at the option of the Banker, hence the bank has to be very conservative in quoting rates.
Correct Answer False
Your Answer True
Multiple Choice Multiple Answer
Question Which factors affect the exchange rates in short time period?
Correct Answer Demand and supply, interest rates, inflation, , Sentiment, Speculation
Your Answer Demand and supply, interest rates, inflation, , Sentiment, Speculation , GDP,Balance of trade and payment,Unemployment
Match The Following
Question Correct Answer Your Answer
Departure EXW EXW
Main carriage paid CFR CFR
Main carriage unpaid FAS FAS
Arrival DES DES
Multiple Choice Multiple Answer
Question Sterling Market is attractive for an international investor because
Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds
Your Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds , Linking of issues to currency swaps
True/False
Question In red clause credit some clauses are printed in Red ink.
Correct Answer True
Your Answer False
Multiple Choice Multiple Answer
Question Which debits are permitted to EEFC accounts?
Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them
Multiple Choice Single Answer
Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the bid rate for USD?
Correct Answer USD 1=Rs 50.5000
Your Answer USD 1=Rs 50.5000
Multiple Choice Single Answer
Question Why are various methods of financial analysis used for assessing a cross border project ?
Correct Answer To weed out unviable projects and rank profitable ones
Your Answer To weed out unviable projects and rank profitable ones
Multiple Choice Multiple Answer
Question Criteria for investment abroad under automatic route :-
Correct Answer Activity for investment is core activity of Indian Company. , Total Financial commitment in JV/WOS as per prescribed ceiling
Your Answer Activity for investment is core activity of Indian Company. , Total Financial commitment in JV/WOS as per prescribed ceiling
Multiple Choice Multiple Answer
Question Who can issue the Certificate of Inspection?
Correct Answer Export Inspection Council , Person authorised by Importer.
Your Answer Export Inspection Council , Person authorised by Importer.
Multiple Choice Single Answer
Question Large number of exporters from which country are enjoying the privilege of receiving up front cash from importers in Russia?
Correct Answer United Kingdom
Your Answer United Kingdom
True/False
Question In developed markets, speculators play important role in determining the trend of currency rates.
Correct Answer True
Your Answer True
Select The Blank
Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________.
Correct Answer Shelf Registration
Your Answer Shelf Registration
Select The Blank
Question In Overseas market the forward rate is generally quoted on the basis of ________.
Correct Answer Fixed date
Your Answer Calendar month
Select The Blank
Question Forward Margin makes a currency costlier then the currency is at ________.
Correct Answer Premium
Your Answer Discount
Multiple Choice Multiple Answer
Question These are the parties to the documentary credit :-
Correct Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bank
Your Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bank
Multiple Choice Multiple Answer
Question What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Single Answer
Question Fixed, Floating or Limited flexibility are used in the context of
Correct Answer Exchange Rates
Your Answer Exchange Rates
Select The Blank
Question In mid 1992 ________ rejected the ratification of Maastricht treaty
Correct Answer Denmark
Your Answer UK
Multiple Choice Multiple Answer
Question Under the liberalisation through FEMA, what can an AD offer to the clients, without the prior permission of RBI or Government?
Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements
Your Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements
Multiple Choice Single Answer
Question To whom is an AD required to report the cancellation of forward contracts?
Correct Answer No one at all.
Your Answer To Reserve Bank of India, fortnightly
Select The Blank
Question ECGC provides cover to an Indian contractor for construction work abroad under ________.
Correct Answer Construction works policy
Your Answer Export Performance Guarantee
True/False
Question The Negotiating bank examines the documents submitted by the seller and makes payment if they comply the terms and conditions of the LC.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992?
Correct Answer USD 275 Billion
Your Answer USD 275 Billion
Multiple Choice Multiple Answer
Question What are the sources of raising funds for exports?
Correct Answer Suppliers credit , Forfaiting
Your Answer Suppliers credit , Forfaiting
Select The Blank
Question Forward margin makes a currency cheaper then the currency is at ________.
Correct Answer Discount
Your Answer Discount
Multiple Choice Single Answer
Question Name the common forex derivatives :-
Correct Answer Options, futures
Your Answer Options, futures
True/False
Question Country risk analysis is a futile exercise in the background of cost of analysis.
Correct Answer True
Your Answer False
Select The Blank
Question Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries
Correct Answer OECD
Your Answer OECD
Match The Following
Question Correct Answer Your Answer
Issues linked with LIBOR,LIBID,LIMEAN FRNs FRNs
Issue of bonds without fixed rate of interest, linked to short term interest rate in the global market FloatingRate Note FloatingRate Note
Issue of loans internationally,through arranger, underwriter,co manager, for a large amount for sharing risk of lending Syndicated Loans Syndicated Loans
Equity issues in the foreign markets either as direct investments or portfolio investments. American or Global Depository Receipts American or Global Depository Receipts
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question In red clause credit some clauses are printed in Red ink.
Correct Answer True
Your Answer True
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 Global capital market can be understood from the study of ________.
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Multiple Choice 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
Multiple Choice Single Answer
Question In International trade, Advance payment means :-
Correct Answer Providing up front cash
Your Answer Sending bills for collection
Select The Blank
Question After the second world war, International settlements were done through ________.
Correct Answer Gold
Your Answer USDollar
Select The Blank
Question Hotels and Airline companies are allowed to receive payments in Indian rupees from foreign tourist without insisiting on ________.
Correct Answer Encashment certificate
Your Answer Encashment certificate
Match The Following
Question Correct Answer Your Answer
Issuing Bank Opening Bank Opening Bank
Stand by credit Bank guarantee Anticipatory Credit
Letter of credit Documentary credit Documentary credit
Bill of exchange Usance Bank guarantee
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 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 Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations
Correct Answer True
Your Answer True
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 Providing Credit insurance against FCNR loans
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 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
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 Various exchange rate mechanisms are basically used for
Correct Answer Correcting currency disequilibrium
Your Answer Correcting currency disequilibrium
True/False
Question Corporates are allowed to raise funds abroad up to $ 15 million as short term finance if they have EPCG license.
Correct Answer True
Your Answer True
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 Provide technical assistance to private enterprise , Help to maintain the exchange rate stability
Multiple Choice Multiple Answer
Question What does a speculator accept while dealing with an option?
Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of payment
Your Answer The exercise or strike price, the amount , The expiration date and time, the method of payment
Multiple Choice Multiple Answer
Question Name the services provided by 'Reuter 3000' in forex market:-
Correct Answer Quotation of forex rates, interest rates , Electronic broking by matching the rates
Your Answer Quotation of forex rates, interest rates , Demat securities
Multiple Choice Multiple Answer
Question What criteria of lending is adopted by The International Development agency while giving loans to a country?
Correct Answer The per capita income of the borrwoing country , The population of the borrwoing country
Your Answer The per capita income of the borrwoing country , The repayment capacity. , The Security offerred.
Multiple Choice Single Answer
Question Under the automatic route of Direct Investment Abroad, what is the restriction on market purchases?
Correct Answer 50% of the net worth of the investing company
Your Answer 50% of the net worth of the investing company
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 Single Answer
Question A country needs external commercial borrowings to :-
Correct Answer Meet the adverse balance of payments position
Your Answer Meet the adverse balance of payments position
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
Multiple Choice Single Answer
Question Which is the most actively traded currency in the international market today?
Correct Answer US Dollar
Your Answer US Dollar
True/False
Question Installment credit is issued for specific quantities of goods to be shipped every week or month.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Equity can be raised internationallly by a company through :-
Correct Answer Fund raising, underwriting, hedging , arbitration operations
Your Answer Fund raising, underwriting, hedging , arbitration operations
Multiple Choice Multiple Answer
Question The factors which affect the performance of an option are:-
Correct Answer Underlying asset price , Time before expiration, rate of interest
Your Answer Underlying asset price , Time before expiration, rate of interest
Multiple Choice Single Answer
Question How does ICC help poor countries?
Correct Answer Attract Foreign Direct investments togeather with UNCTAD
Your Answer Attract Foreign Direct investments togeather with UNCTAD
True/False
Question PP Form is required when exports are made to any country by post parcel on value payable basis.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question What is the effect of interweaving of national economies?
Correct Answer Govt decisions have stronger international repurcussions
Your Answer Economic growth and job creations is increased
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 False
Match The Following
Question Correct Answer Your Answer
Treasury management Profit making Funds transfer
Arbitraging Rate disparity Hedging instruments
Futures, Options Hedging instruments Profit making
Exchange Rate volatility Speculation Banks and multinationals
True/False
Question The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total.
Correct Answer False
Your Answer False
Select The Blank
Question Partnership firm not eligible for Overseas Direct Investment needs to apply to RBI Approval in form ________.
Correct Answer ODI
Your Answer ODI
True/False
Question If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True
Your Answer True
Select The Blank
Question Mostly, countries in the Middle east require ________ invoice, for facilitating import duties .
Correct Answer Legalised
Your Answer Customs
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 For opening JV/WOS in Nepal, Bhutan, the ceiling for financial commitment per annum is ________.
Correct Answer Rs. 350 crore
Your Answer Rs. 350 crore
Select The Blank
Question The creditworthiness of futures exchange is maintained through imposition of ________.
Correct Answer Margin
Your Answer Penalty
Multiple Choice Single Answer
Question Which authorities require the documents of International trade?
Correct Answer Customs, Excise, Bank,
Your Answer Customs, Excise, Bank,
Select The Blank
Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________.
Correct Answer Euro Commercial Papers
Your Answer Euro Commercial Papers
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 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 Multiple Answer
Question Which debits are permitted to EEFC accounts?
Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them
True/False
Question CFR = FOB plus freight paid by seller + insurance paid by seller.
Correct Answer False
Your Answer False
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