SCDL PGDBA International Finance Bible

1

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

2

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


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

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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


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.

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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


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


Question Under the liberalisation through FEMA, what can an AD offer to the clients, without the prior permission of RBI or Government?

5

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

6

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

Bottom of Form


Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market

Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates

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

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

True/False

Question Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True

Your Answer True

Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of payment

Your Answer The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option

Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer US Dollar

Your Answer US Dollar


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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 Factors' values

Weightages % Factors' values 100% of total

Select The Blank Question Global capital market can be understood from the study of ________.

Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the

country

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


Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer Pegged to Single currency


Maturity of future Time when actual commodity is delivered Last date of exercising option

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

True/False

Question Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct Answer False

Your Answer False

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

Your Answer True

Multiple Choice Multiple Answer Question What are margins, with reference to futures market?

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Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts

Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts

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

Your Answer USD 1 trillion

Multiple Choice Single Answer Question NIF is basically an agreement :- Correct Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers

Your Answer Which enables the investor to market the same in the secondary market

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

Your Answer Preshipment credit up to six months for construction and turnkey projects abroad

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

Your Answer American Dollar

Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily.

Correct Answer Economies Your Answer Currencies

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


Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer Control by Government' Your Answer Recurrence

Select The Blank

Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer Brussels

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Multiple Choice Single Answer Question What is Risk Syndication facility?

Correct Answer Sharing of risk of non payment by supplier Your Answer Sharing risk of Non payment by the Syndicate of Banks giving loans

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

Your Answer True

Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :- Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country

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

True/False Question There is no difference between CIP and CIF contracts except the mode of

transportation. Correct Answer True Your Answer True


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 When an Indian Company earns at least 50% of its average turnover from a

particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer Primary activity

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 The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total.

Correct Answer False

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Your Answer False

Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is

the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer USD 1=Rs 50.5000

Multiple Choice Multiple Answer Question Export finance

Correct Answer Preshipment credit , Post shipment credit , Duty Draw back Your Answer Preshipment credit , Post shipment credit , Buyers credit

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 , Which have greater intrinsic value




Question What does the word '"Tombstone" stand for? Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recently

floated issue

Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________.

Correct Answer Euro Commercial Papers Your Answer Euro Commercial Papers

Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ?

Correct Answer To weed out unviable projects and rank profitable ones Your Answer To weed out unviable projects and rank profitable ones

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

Your Answer Buy when you are having short position

Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer? Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies

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Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies

Select The Blank


Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate?

Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit

Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer Prices of capital market instruments change and are expected to change drastically

Your Answer Prices of capital market instruments change and are expected to change drastically

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

Your Answer False


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 , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed

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

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

True/False Question Out of 15 member countries in European Union 12 countries commiteed themselves for a single currency. Correct Answer False

Your Answer False

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 A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer An Irrevocable credit


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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

Select The Blank

Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar


Multiple Choice Single Answer Question What is the meaning of a country risk? Correct Answer Risk of events in a particular country which may cause loss to a person dealing with that country

Your Answer Risk of events in a particular country which may cause loss to a person dealing with that country

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


Question What help does EXIM Bank provide under the scheme 'Direct Financial assistance to exporters'? Correct Answer Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer

Your Answer Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer


PP Form Export Declaration form Export Declaration form Health Certificate Fumigation certificate Fumigation certificate

Certificate of Inspection As per importers requirement As per importers requirement Certifiate of Origin Export Promotion Council Export Promotion Council

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

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Multiple Choice Single Answer Question How many INCOTERMS are there in "Departure" Group? Correct Answer One

Your Answer Two

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.

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 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


Question What was the collective assessment of International financial market about the country risk of many cnuntries in the last decade? Correct Answer Whatever it was, was disastrously wrong.

Your Answer Whatever it was, was disastrously wrong.

Multiple Choice Multiple Answer Question How is the entry into any conuntry's money market or capital market is restricted? Correct Answer Because of different tax systems , Because of different credit standards Your Answer Because of different tax systems , Because of different credit standards

True/False

Question Till August 1994 India was following the Indirect Methodof Rate quotation. Correct Answer False Your Answer True

Select The Blank Question In Indian interbank market forward rates are generally quoted on the basis of

________. Correct Answer Calendar month Your Answer Calendar month

Select The Blank

Question Rupee was liberalised on ________ account in 1993, and on current account in 1994. Correct Answer Trade Your Answer Trade

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

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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

True/False Question Funding Options in domestic yen market are Futures, FRAs, Call and put options. Correct Answer True Your Answer True

Select The Blank

Question ECGC provides cover to an Indian contractor for construction work abroad under ________. Correct Answer Construction works policy Your Answer Construction works policy


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 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 red clause credit some clauses are printed in Red ink. Correct Answer True Your Answer True

True/False Question Prior approval of RBI is needed for payment of all imports.

Correct Answer False Your Answer True

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 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 Management of external risk

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

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Select The Blank Question To make the export more competitive and remunerative, the Indian Govt extends ________ facility.

Correct Answer Cash Incentives Your Answer Advance against cash incentives

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 , Financial commitment in JV/WOS maximum $ 100 million or equivalent

Multiple Choice Multiple Answer Question External Commercial Debt market :-

Correct Answer Prevails in Domestic market of foreign country , Prevails in offshore markets Your Answer Prevails in Domestic market of foreign country , Prevails in offshore markets

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

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 , Certainty of an event which would happen in favour of the importer/ exporter


Question For a spot transaction carried out on Tuesday, where both centers have holiday on Wednesday, currencies will be exchanged on :- Correct Answer Thursday if it is a working day at both the centers

Your Answer Friday


Question Which details about forward contracts do the Exchange Controls verify ? Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000 Your Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000

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


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

Select The Blank

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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


Your Answer Preshipment credit beyond six months for construction and turnkey projects abroad

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

True/False Question Import finance is nomally available at rates of interest cheaper than domestic finance

rates. Correct Answer False Your Answer False

Multiple Choice Multiple Answer Question Major investors in NIF are :-

Correct Answer Commercial Banks , Non banking Finance companies , Insurance Companies Your Answer Commercial Banks , Non banking Finance companies


Your Answer Denmark

True/False Question Indian companies are now allowed to freely invest abroad up to $1.5 million, raised through GDE or EEFC without prior permission from RBI.

Correct Answer False Your Answer True

Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market




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

Your Answer Buffer Stock Facility

17

True/False Question Cross currency forward contract is not meaningful if original contract is in Rupees to USD

Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer The exercise or strike price, the amount , The expiration date and time, the

method of payment Your Answer The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option

Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today?

Correct Answer US Dollar Your Answer US Dollar


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 Factors' values



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


Question For a spot transaction carried out on Thursday, currencies will be exchanged on :- Correct Answer Monday Your Answer Monday


Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating

Your Answer Pegged to Single currency

Match The Following Question Correct Answer Your Answer Maturity of future Time when actual commodity is delivered Last date of exercising

option

18

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

True/False Question Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument.

Correct Answer False Your Answer False

True/False Question The Prominent non banking financial institutions participating in the FOREX

markets are Pension funds, mutual funds, insurance Cos. Correct Answer True Your Answer True


Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts


Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion

Your Answer USD 1 trillion

Multiple Choice Single Answer Question NIF is basically an agreement :- Correct Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers


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

Your Answer USD 275 Billion

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

abroad Your Answer Preshipment credit up to six months for construction and turnkey projects abroad

Select The Blank Question Over the years ________has been the most widely accepted currency in

international capital market.

19

Correct Answer American Dollar Your Answer American Dollar

Select The Blank

Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily. Correct Answer Economies Your Answer Currencies


Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer US Dollar Your Answer US Dollar

Select The Blank Question ________ is the acid test for events to be included in country risk.

Correct Answer Control by Government' Your Answer Recurrence

Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is

popular in ________. Correct Answer Brussels Your Answer Brussels




Your Answer True



Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts?

Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them 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


True/False

20

Question There is no difference between CIP and CIF contracts except the mode of transportation.


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 When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity

Your Answer Primary activity

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 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

Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000


Multiple Choice Multiple Answer Question Export finance Correct Answer Preshipment credit , Post shipment credit , Duty Draw back

Your Answer Preshipment credit , Post shipment credit , Buyers credit


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

, Which have greater intrinsic value

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 What does the word '"Tombstone" stand for? Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of

recently floated issue

21

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

Select The Blank

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


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


Question Examples of hedge are: Correct Answer Buy when you are having short position Your Answer Buy when you are having short position


Question What is the effect of cross currency option on the customer? Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement

of rates between 3 currencies

Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount Your Answer Discount


Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business

profit Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit

Multiple Choice Single Answer Question The capital market is said to be volatile when

Correct Answer Prices of capital market instruments change and are expected to change drastically Your Answer Prices of capital market instruments change and are expected to change drastically

True/False

Question JV means Joint venture and WOS means World of Security. Correct Answer False Your Answer False

Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad?

22

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 , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed LIST OF ATTEMPTED QUESTIONS AND ANSWERS

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 Multiple Choice Single Answer

Question A Bank quotes interest rate of 9.50/10.00for six months dollar deposit, here the bid rate is :- Correct Answer 9.50% P.A. Your Answer 9.50% P.A.

Multiple Choice Single Answer Question What is Sovereign Risk? Correct Answer Risk of lending to the governmentof a country

Your Answer Risk of lending to the government of acountry 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 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 Rapid and appropriate policy response in US and other countries , Increase in Foreign DirectInvestments , free flow of credit True/False

Question Out of 15 member countries in European Union 12 countries commiteed themselves for a single currency. Correct Answer False

Your Answer True True/False Question In red clause credit some clauses are printed in Red ink.

Correct Answer True Your Answer True True/False

Question Transfer of funds for investment abroad is allowed freely. Correct Answer True Your Answer False

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

Your Answer Credit card, safe custody, safe deposit locker without any fee Select The Blank

Question Fixed interest rate Eurobond without the option to convert to equity is known as ________. Correct Answer Straight Debt Your Answer Interest rate swap

23

True/False

Question An Indian importing goods from USA pays dollars in India. Correct Answer False Your Answer True

Match The Following Question Correct Answer Your Answer PP Form Export Declaration form Export Declaration form

Health Certificate Fumigation certificate Export Declaration form Certificate of Inspection As per importers requirement Export Declaration form Certifiate of Origin Export Promotion Council Export Declaration form

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 track

record of the buyer and seller 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 on behalf of a certain person to another person in different country , It is a stamped agreement and is not valid unless it is signed by the issuer

True/False Question CFR = FOB plus freight paid by seller + insurance paid by seller.

Correct Answer False Your Answer True Select The Blank

Question Even after liberalization 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 OPEC 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


Your Answer Supplemental Reserve Policy 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 Normally the forward contracts are booked for making huge profits. Correct Answer False

24

Your Answer False

True/False Question Head office of ICC is in Paris because of its First President Eliance Clementel. Correct Answer True Your Answer False

Select The Blank Question A ________ Bill of lading does not specify the terms and conditions of carriage. Correct Answer Short Form

Your Answer Short Form Multiple Choice Single Answer

Question What is the volume of the world's total speculative transactions? Correct Answer Roughly 90 % of the total turnover Your Answer 70% of the total turnover

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 Mr P has exported goods in May 2005 and is expecting payment of Euro 25000 by the last week of Sept 2005. Give details of the forward contract he can

book :- Correct Answer He can book a sale contract any time from May 2005 till Mid Sept 2005, for Euro 25000 or less, for maturity last week of Sept. Your Answer He can book a contract for Forward Purchase, any time from May 2005 till Mid Sept 2005,

for Euro 25000 or less, for maturity last week of Sept. 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 Shell Registration


shipment Your Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment , The name of the vessel , The date of transportation and contract of transportation

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 Interest

Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________.

25

Correct Answer Euro Commercial Papers Your Answer ADRs

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 Non money trade 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 to EOUs in India for services rendered by them , Payment of Gifts of GBP 5000

per year per donor 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 Caps and collars, and forward rate agreements , Good and competitive exchange rates and cross currency rates 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 Choice of issuing medium term and long term bonds , Less controls and less formalities to

be completed , Linking of issues to currency swaps Multiple Choice Single Answer

Question Under which contracts the seller pays the import duty for the buyer? Correct Answer DDP Your Answer DDP

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 True 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 , The heads of G5 insisted to have a meeting , Failure of IMF to control the exchange rates

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, give import and export finance

Multiple Choice Single Answer Question Who can open an EEFC account? Correct Answer Individuals , firms, companies, resident in India

26

Your Answer Individuals , firms, companies, resident in India

Multiple Choice Single Answer Question What is the role of ICC towards WTO? Correct Answer To provide world business recommendations to WTO Your Answer To further the cause of WTO

Match The Following Question Correct Answer Your Answer -Swap price Difference in prices of two legs of buying and selling Quoting rate for both buying and selling

a currency -Euro Market Market in Euro currencies Market in Euro currencies -Making market Quoting rate for both buying and sellinga currency Difference in prices of two legs of

buying and selling -Spread Price difference between bid and offer Maket of 'Euro'

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

Your Answer Awkward 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

Multiple Choice Multiple Answer Question Why is Bill of Exchange a Quasi Negotiable Instrument? Correct Answer It represents title to goods , It is issued under Sale of Goods act

Your Answer It represents title to goods , It is issued under Transportation act , It is issued under Bill of exchange act Multiple Choice Single Answer

Question Which details about forward contracts do the Exchange Controls verify ? Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000 Your Answer Details of all contracts booked and cancelled beyond a specified limit

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 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

Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market

intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates

Select The Blank

27

Question ________ is the agency of ICC which deals with the maritime crime. Correct Answer International Maritime Bureau



True/False

Question Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True Your Answer True


Question What does a speculator accept while dealing with an option? Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of payment


Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer US Dollar


Match The Following Question Correct Answer Your Answer Intolerable risk Drop the investment project Drop the investment project


Stock market analysis Banks are ahead Factors' values Weightages % Factors' values 100% of total

Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country


Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :-

Correct Answer Monday Your Answer Monday

Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating


28


Maturity of future Time when actual commodity is delivered Last date of exercising option Note issuance facility Euronotes Euronotes


security deposit

True/False Question Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable

instrument. Correct Answer False Your Answer False

True/False Question The Prominent non banking financial institutions participating in the FOREX markets are

Pension funds, mutual funds, insurance Cos. Correct Answer True Your Answer True


Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency

for honouring contracts

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


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


Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion


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

29

Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market.


Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily.


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


Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer Control by Government'

Your Answer Recurrence

Select The Blank

Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels

Your Answer Brussels

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

True/False

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

Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :-

Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country 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 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 Funding Options in domestic yen market are Futures, FRAs, Call and put options.

30


True/False

Question There is no difference between CIP and CIF contracts except the mode of transportation. Correct Answer True Your Answer True


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 When an Indian Company earns at least 50% of its average turnover from a particular

activity then that activity is considered as ________. Correct Answer Core activity Your Answer Primary activity

Select The Blank


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

Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the

offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer USD 1=Rs 50.5000

Multiple Choice Multiple Answer Question Export finance

Correct Answer Preshipment credit , Post shipment credit , Duty Draw back Your Answer Preshipment credit , Post shipment credit , Buyers credit

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 , Which have greater intrinsic value



31

Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for?

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

Select The Blank



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


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


Question What is the effect of cross currency option on the customer? Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of

rates between 3 currencies

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


Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit


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

True/False Question JV means Joint venture and WOS means World of Security.


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

32


Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions?

Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a

market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates

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

Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ?

Correct Answer Buffer Stock Facility Your Answer Buffer Stock Facility

True/False Question Cross currency forward contract is not meaningful if original contract is in Rupees to USD


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 , The Market report of the exchange which trades the option


Question Which is the most actively traded currency in the international market today? Correct Answer US Dollar Your Answer US Dollar






33

Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country


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

Your Answer Monday

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

Match The Following

Question Correct Answer Your Answer Maturity of future Time when actual commodity is delivered Last date of exercising

option 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



True/False Question The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos.


Multiple Choice Multiple Answer Question What are margins, with reference to futures market? Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures

solvency for honouring contracts Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts


Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer USD 1 trillion

Multiple Choice Single Answer Question NIF is basically an agreement :-

34

Correct Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers


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


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

Select The Blank

Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar


Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily. Correct Answer Economies

Your Answer Currencies

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

Select The Blank

Question ________ is the acid test for events to be included in country risk. Correct Answer Control by Government' Your Answer Recurrence

Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is

popular in ________. Correct Answer Brussels Your Answer Brussels


Question What is Risk Syndication facility? Correct Answer Sharing of risk of non payment by supplier Your Answer Sharing risk of Non payment by the Syndicate of Banks giving loans

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



35

Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country


Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,

Payment to EOUs in India for services rendered by them 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 Financial management is complex process for

Correct Answer Companies which have international trade Your Answer Companies which have international trade

Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________.

Correct Answer Core activity Your Answer Primary activity

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 The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total.


Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs?

Correct Answer USD 1=Rs 50.5000 Your Answer USD 1=Rs 50.5000



36


Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value

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


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

floated issue

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

Your Answer Euro Commercial Papers

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


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

Your Answer Buy when you are having short position


Question What is the effect of cross currency option on the customer? Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies

Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies

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


Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit

37




Your Answer False

Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent


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

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

True/False Question Out of 15 member countries in European Union 12 countries commiteed themselves for a single currency.


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


Match The Following

Question Correct Answer Your Answer Intolerable risk Drop the investment project Drop the investment project


Stock market analysis Banks are ahead Banks are ahead Weightages % Factors' values Factors' values

Select The Blank

38

Question Over the years ________has been the most widely accepted currency in international capital market.


Multiple Choice Single Answer Question What is the meaning of a country risk? Correct Answer Risk of events in a particular country which may cause loss to a person dealing with

that country Your Answer Risk of events in a particular country which may cause loss to a person dealing with that country

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 Single Answer Question What help does EXIM Bank provide under the scheme 'Direct Financial assistance to exporters'? Correct Answer Funds are provided under deferred payment terms to Indian exporter for credit to

foreign buyer Your Answer Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer


PP Form Export Declaration form Export Declaration form

Health Certificate Fumigation certificate Fumigation certificate Certificate of Inspection As per importers requirement As per importers requirement

Certifiate of Origin Export Promotion Council Export Promotion Council

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

Multiple Choice Single Answer Question How many INCOTERMS are there in "Departure" Group?

Correct Answer One Your Answer Two

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.

True/False

39

Question The American Dollar market comprises of the domestic segment of USD the offshore segment of USD.


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 What was the collective assessment of International financial market about the country risk of many cnuntries in the last decade?

Correct Answer Whatever it was, was disastrously wrong. Your Answer Whatever it was, was disastrously wrong.

Multiple Choice Multiple Answer Question How is the entry into any conuntry's money market or capital market is restricted?

Correct Answer Because of different tax systems , Because of different credit standards Your Answer Because of different tax systems , Because of different credit standards

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

Your Answer True

Select The Blank Question In Indian interbank market forward rates are generally quoted on the basis of ________. Correct Answer Calendar month

Your Answer Calendar month

Select The Blank Question Rupee was liberalised on ________ account in 1993, and on current account in 1994. Correct Answer Trade

Your Answer Trade


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


Question Which of these are considered as miscellaneous documents? Correct Answer Packing list , Weight certificate Your Answer Packing list , Weight certificate



Select The Blank

40

Question ECGC provides cover to an Indian contractor for construction work abroad under ________.

Correct Answer Construction works policy Your Answer Construction works policy

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 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 red clause credit some clauses are printed in Red ink. Correct Answer True

Your Answer True

True/False Question Prior approval of RBI is needed for payment of all imports. Correct Answer False Your Answer True


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 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 Management of external risk

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 To make the export more competitive and remunerative, the Indian Govt extends ________ facility. Correct Answer Cash Incentives Your Answer Advance against cash incentives


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 , Financial commitment in JV/WOS

maximum $ 100 million or equivalent

41

Multiple Choice Multiple Answer Question External Commercial Debt market :- Correct Answer Prevails in Domestic market of foreign country , Prevails in offshore markets

Your Answer Prevails in Domestic market of foreign country , Prevails in offshore markets

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


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 , Certainty of an event which would happen in favour of the importer/ exporter

Multiple Choice Single Answer Question For a spot transaction carried out on Tuesday, where both centers have holiday on

Wednesday, currencies will be exchanged on :- Correct Answer Thursday if it is a working day at both the centers Your Answer Friday

Multiple Choice Single Answer Question Which details about forward contracts do the Exchange Controls verify ?

Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000 Your Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000

True/False Question In the forward rate quotations between two currencies, when one currency is at discount the other currency is at premium.



Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations

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


Your Answer Preshipment credit beyond six months for construction and turnkey projects abroad


42

Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country


True/False Question Import finance is nomally available at rates of interest cheaper than domestic finance rates.


Multiple Choice Multiple Answer Question Major investors in NIF are :- Correct Answer Commercial Banks , Non banking Finance companies , Insurance Companies

Your Answer Commercial Banks , Non banking Finance companies


Your Answer Denmark

True/False Question Indian companies are now allowed to freely invest abroad up to $1.5 million, raised through GDE or EEFC without prior permission from RBI. Correct Answer False

Your Answer True


Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market





True/False

Question Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True Your Answer True


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

43



Question Which is the most actively traded currency in the international market today? Correct Answer US Dollar Your Answer US Dollar








Question For a spot transaction carried out on Thursday, currencies will be exchanged on :- Correct Answer Monday

Your Answer Monday

Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating


Match The Following Question Correct Answer Your Answer Maturity of future Time when actual commodity is delivered Last date of exercising

option Note issuance facility Euronotes Euronotes


security deposit

True/False

44

Question Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument.




Multiple Choice Multiple Answer Question What are margins, with reference to futures market? Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures

solvency for honouring contracts Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts




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


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 Preshipment credit up to six months for construction and turnkey projects abroad

Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market.


Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the

countries suffered heavily. Correct Answer Economies Your Answer Currencies

45

Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions?


Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer Control by Government'

Your Answer Recurrence

Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels

Your Answer Brussels

Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer Sharing of risk of non payment by supplier

Your Answer Sharing risk of Non payment by the Syndicate of Banks giving loans

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


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





True/False Question There is no difference between CIP and CIF contracts except the mode of transportation.


Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade


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Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________.

Correct Answer Core activity Your Answer Primary activity

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 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

Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs?

Correct Answer USD 1=Rs 50.5000 Your Answer USD 1=Rs 50.5000



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

, Which have greater intrinsic value

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



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

Select The Blank


47

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 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

Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer? Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement

of rates between 3 currencies Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies

Select The Blank


Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange

rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business

profit

Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer Prices of capital market instruments change and are expected to change

drastically Your Answer Prices of capital market instruments change and are expected to change drastically

True/False Question JV means Joint venture and WOS means World of Security.


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 , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed

LIST OF ATTEMPTED QUESTIONS AND ANSWERS 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

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Question A Bank quotes interest rate of 9.50/10.00for six months dollar deposit, here the bid rate is :- Correct Answer 9.50% P.A. Your Answer 9.50% P.A.

Multiple Choice Single Answer Question What is Sovereign Risk? Correct Answer Risk of lending to the governmentof a country Your Answer Risk of lending to the government of acountry

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 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 Rapid and appropriate policy response in US and other countries , Increase in Foreign DirectInvestments , free flow of credit True/False

Question Out of 15 member countries in European Union 12 countries commiteed themselves for a single currency. Correct Answer False Your Answer True

True/False Question In red clause credit some clauses are printed in Red ink.

Correct Answer True Your Answer True True/False

Question Transfer of funds for investment abroad is allowed freely. Correct Answer True Your Answer False

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

Your Answer Credit card, safe custody, safe deposit locker without any fee Select The Blank Question Fixed interest rate Eurobond without the option to convert to equity is known as ________.

Correct Answer Straight Debt Your Answer Interest rate swap

True/False Question An Indian importing goods from USA pays dollars in India. Correct Answer False Your Answer True


PP Form Export Declaration form Export Declaration form Health Certificate Fumigation certificate Export Declaration form

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Certificate of Inspection As per importers requirement Export Declaration form Certifiate of Origin Export Promotion Council Export Declaration form

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 track record of the buyer and seller


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 on behalf of a certain person to another person in different country , It is a stamped agreement and is not valid unless it is signed by the issuer

True/False Question CFR = FOB plus freight paid by seller + insurance paid by seller.

Correct Answer False Your Answer True Select The Blank

Question Even after liberalization 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 OPEC

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


Your Answer Supplemental Reserve Policy 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 Normally the forward contracts are booked for making huge profits. Correct Answer False Your Answer False

True/False Question Head office of ICC is in Paris because of its First President Eliance Clementel. Correct Answer True

Your Answer False Select The Blank

Question A ________ Bill of lading does not specify the terms and conditions of carriage. Correct Answer Short Form Your Answer Short Form

50


Question What is the volume of the world's total speculative transactions? Correct Answer Roughly 90 % of the total turnover Your Answer 70% of the total turnover

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 Mr P has exported goods in May 2005 and is expecting payment of Euro 25000 by the last week of Sept 2005. Give details of the forward contract he can

book :- Correct Answer He can book a sale contract any time from May 2005 till Mid Sept 2005, for Euro 25000 or less, for maturity last week of Sept. Your Answer He can book a contract for Forward Purchase, any time from May 2005 till Mid Sept 2005,

for Euro 25000 or less, for maturity last week of Sept. 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 Shell Registration


shipment Your Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment , The name of the vessel , The date of transportation and contract of transportation

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 Interest 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 ADRs 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 Non money trade


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Payment to EOUs in India for services rendered by them Your Answer Payment to EOUs in India for services rendered by them , Payment of Gifts of GBP 5000

per year per donor 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 Caps and collars, and forward rate agreements , Good and competitive exchange rates

and cross currency rates 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 Choice of issuing medium term and long term bonds , Less controls and less formalities to

be completed , Linking of issues to currency swaps Multiple Choice Single Answer

Question Under which contracts the seller pays the import duty for the buyer? Correct Answer DDP Your Answer DDP

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 True 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 , The heads of G5 insisted to have a meeting , Failure of IMF to control the exchange rates

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, give import and export finance Multiple Choice Single Answer

Question Who can open an EEFC account? Correct Answer Individuals , firms, companies, resident in India Your Answer Individuals , firms, companies, resident in India

Multiple Choice Single Answer Question What is the role of ICC towards WTO? Correct Answer To provide world business recommendations to WTO

Your Answer To further the cause of WTO Match The Following

Question Correct Answer Your Answer -Swap price Difference in prices of two legs of buying and selling Quoting rate for both buying and selling a currency

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-Euro Market Market in Euro currencies Market in Euro currencies -Making market Quoting rate for both buying and sellinga currency Difference in prices of two legs of

buying and selling -Spread Price difference between bid and offer Maket of 'Euro'

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

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

Multiple Choice Multiple Answer Question Why is Bill of Exchange a Quasi Negotiable Instrument? Correct Answer It represents title to goods , It is issued under Sale of Goods act

Your Answer It represents title to goods , It is issued under Transportation act , It is issued under Bill of exchange act Multiple Choice Single Answer

Question Which details about forward contracts do the Exchange Controls verify ? Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000 Your Answer Details of all contracts booked and cancelled beyond a specified limit

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 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

Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market

intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates

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

Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ?

Correct Answer Buffer Stock Facility Your Answer Buffer Stock Facility

True/False

53

Question Cross currency forward contract is not meaningful if original contract is in Rupees to USD


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 , The Market report of the exchange which trades the option

Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today?









Question For a spot transaction carried out on Thursday, currencies will be exchanged on :- Correct Answer Monday Your Answer Monday

Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92?

Correct Answer Other managed Floating Your Answer Pegged to Single currency


Maturity of future Time when actual commodity is delivered Last date of exercising option

Note issuance facility Euronotes Euronotes Bearer security issued in currency other than that of the country of issue Eurobonds Eurobonds

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Margin on future Peformance bond or security deposit Peformance bond or

security deposit






Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts



Multiple Choice Single Answer Question NIF is basically an agreement :-

Correct Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Your Answer Which enables the investor to market the same in the secondary market


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


Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer Preshipment credit up to six months for construction and turnkey projects abroad

Select The Blank Question Over the years ________has been the most widely accepted currency in international

capital market. Correct Answer American Dollar Your Answer American Dollar

Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries

suffered heavily.

55



Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer US Dollar Your Answer US Dollar

Select The Blank Question ________ is the acid test for events to be included in country risk.

Correct Answer Control by Government' Your Answer Recurrence

Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________.

Correct Answer Brussels Your Answer Brussels




Your Answer True





True/False





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Question Financial management is complex process for Correct Answer Companies which have international trade


Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity

Your Answer Primary activity

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 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

Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000


Multiple Choice Multiple Answer Question Export finance Correct Answer Preshipment credit , Post shipment credit , Duty Draw back Your Answer Preshipment credit , Post shipment credit , Buyers credit


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 ,

Which have greater intrinsic value


Question What are the functions of Asian Development Bank? Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market


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

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

Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a

discount to face value are known as ________.

57

Correct Answer Euro Commercial Papers Your Answer Euro Commercial Papers


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


Question Examples of hedge are: Correct Answer Buy when you are having short position Your Answer Buy when you are having short position

Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer?

Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of

rates between 3 currencies

Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount Your Answer Discount


Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit




Your Answer False

Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum

$ 100 million or equivalent Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed

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SCDL PGDBA International Finance Bible

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