Bachelor of Management Studies (B.M.S.) SEM VI 2020 21 2020-21 Sample MCQs International Finance Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 Nation that have major economic expansion attract:
   • a) Import
   • b) Export
2. Q2 Mid rate of quote -CAD/NZD 62.8430/62.8480 is:
3. Q3 If USD/SEK 1.5100/1.5110 and 1 month forward points are 140/170; then calculate USD/SEK quotation for | month
4. Q4 In foreign exchange market, one country trade with other countries in:
   • a) Currency
   • b) Product
   • c) Commodity
   • d) Financial Institutions
5. Q5 Systematic record of economic transaction for given year is known as :
   • a) BOP
   • b) BOT
   • d) Current a/c
6. Q6 The monetary system in Indian is controlled by:
   • c) GOI
   • d) Finance Ministry
7. Q7 Mean Rate is also known as:
   • a) Ask Rate
   • b) Forward Rate
   • c) Mid-Rate
   • d) Bid Rate
8. Q8 International trade related disputes is undertaken by:
9. Q9 Funding for development activities in an economy is provided by:
   • d) EXIM BANK
10. Q10 If portable disk players made in China are imported into the United States, the Chinese manufacturer is paid with:
    • b) US Dollars
    • c) Yuan
    • d) Euro currency
11. Q11 Which of the following definitely illustrate the depreciation of USD:
    • a) The dollar exchanges for 1 pound and then exchanges for 1.2 pounds
    • b) The dollar exchanges for 250 yen and then exchanges for 275 francs
    • c) The dollar exchanges for 100 francs and then exchange for 120 Yen
    • d) The dollar exchanges for 75 INR and then exchanges for 70 INR Ans: d) the dollar exchanges for 75 INR and then exchanges for 70 INR
12. Q12 Out of the following which currency is not world major trading currency:
    • d) Sweden Peso
13. Q13 By definition currency appreciation occur when:
    • a) The value of all currency falls relative to gold
    • b) The value of all currency rises relative to gold
    • c) The value of one currency rises relative to another country
    • d) The value of one currency falls relative to another country Ans: c) the value of one currency rises relative to another country
14. Q14 The features of international business except:
    • a) Political Risk
    • c) Involvement of various players
    • d) Expansion of business within country Ans: d) Expansion of business within country
15. Q15 Given a home country and foreign country, purchasing power parity suggests that:
    • a) the home country will appreciate if the current home inflation rate exceeds the current
    • b) the home country will depreciate if the current home interest rate exceeds the current
    • c) the home country will depreciate if the current home interest rate exceeds the current
    • d) the home country will depreciate if the current home inflation rate exceeds the current Ans: d) the home country will depreciate if the current home inflation rate exceeds the
16. Q16 Gifts and Reliefs are:
    • a) Merchandise Payment
    • b) Transfer Payment
    • c) Service Payment
    • d) Trade Payment
17. Q17 Current account includes all of them except:
    • b) Merchandise
    • c) Unilateral transfer
    • d) BOT
18. Q18 Not a profit maximizing business is:
19. Q19 Difference between the value of merchandise exports and imports is:
    • a) BOP
    • b) BOT
    • c) BID
    • d) Current account
20. Q20 In Balance of payment FDI is shown in:
    • a) Capital Account
    • b) Current Account
    • d) Errors and Omissions
21. Q21 Foreign exchange reserve is shown in:
    • a) Current Account
    • b) Capital account
    • d) Errors and Omissions
22. Q23 Which among the following is negative impact of globalization?
    • a. Increase In World Trade
    • b. Increase in standard of Leaving
    • c. Increase in FDI
    • d. Environmental effects
23. Q24 Smithsonian agreement was applicable during:
24. Q25 The need for foreign exchange market was:
    • a. Increase in personal wealth
    • b. Protection of Currency
    • c. Trading in forex
    • d. Increase in exports Ans: b) Protection of Currency
25. Q26 Which is not the characteristics of foreign exchange market:
    • a. Market size
    • b. Geographical extent
    • c. Boom
26. Q27 Which of the following is not the participant of foreign exchange market?
    • a. Retailers
    • c. Commercial Banks
27. Q28 Choose the correct function of Forex market:
    • d. Increase Prices
28. Q29 Which of the following is not included in structure of forex market?
    • b. Retail market
    • c. Interbank market
    • d. Commercial market
29. Q30 Settlement period for spot market is:
30. Q31 All are the types of arbitrage except:
    • a. Locational
    • b. Triangular
    • c. Covered interest
    • d. Umbrella arbitrage
31. Q32 Spot USDINR 60- and six-months forward is USDINR 61. AFM is:
32. Q33 The smallest unit by which a currency quotation can change:
    • a. Bid
    • b. Ask
    • c. Spread
    • d. Pip
33. Q34 In fisher parity F/S =
    • a. HI
    • b. FI
    • c. FI/HI
    • d. HI/FI
34. Q35 Among the following choose the money market instrument:
    • a. Debentures
    • b. Equity Shares
    • c. Monetary policy
    • d. T-bills
35. Q36 If formula I of Fisher’s effect is negative, then company should:
36. Q37 Mention the features of forward contract:
    • b. Standardized
    • c. Organized Exchange
    • d. Margins
37. Q38 In ITM call option cash flow is:
    • a. Zero
    • b. Negative
    • c. Positive
    • d. Neutral
    • d. Forward premium
38. Q40 Who has the right to buy if currency option exercised?
    • a. Option Buyer
    • b. Option writer
    • c. Exchange
39. Q41 Which option can be exercised on any date up to expiry:
    • c. American
    • d. European
40. Q42 Application of Currency Futures includes except:
    • a. Hedging
    • c. Speculation
    • d. Insurance
41. Q43 The primary use of futures contract is:
    • a. To generate profit
    • b. To do trading activities
    • c. To transfer risk
    • d. To avoid profit Ans: c) To Transfer Risk
42. Q44 Regulation ‘Q’ was introduced by which central bank:
    • b. Bank of England
    • c. Federal Reserve
    • d. Bank of Japan
43. Q45 Which are the factors responsible for growth of Euro Currency Markets:
    • a. Regulation ‘M’
    • c. Bank of England
44. Q46 In currency market CDs stands for:
    • a. Commodity derivatives
    • b. Commercial Deposits
    • c. Certificate of deposit
    • d. Cumulative Dividend Ans: c) Certificate of deposit
45. Q47 Which among the following is not a bond market?
    • a. Domestic Bonds
    • b. Foreign Bonds
    • c. Euro Bonds
    • a. No interest payment
    • c. Interest and principal paid at end
    • d. Irredeemable Bond Ans: c) Interest and Principal paid at end
46. Q49 Risk tolerance and risk trade — off are:
    • a. Similar
    • b. Some what similar
    • c. Totally different
    • d. not used in financial terms
47. Q50 The primary reason why developing countries lack foreign investment:
    • a. Political Risk
    • b. Credit Risk
48. Q51 International equity market does not consist of:
    • d. Debt
49. Q52 Which among the following is not ADR levels?
    • a. Level I
    • b. Level II
    • c. Level III
    • d. Level X in international finance stands for:
50. Q54 In which year FEMA was passed:
51. Q55 Which among the following has the features of high degree of control?
52. Q56 Who can authorize a person/company to deal in foreign exchange
53. Q57 The impact of Foreign exchange rate on firm is called as
    • a. Operating Exposure
    • b. Transaction exposure
    • c. Translation exposure
    • d. Business risk
54. Q58 Which is not the part of Capital Budgeting decisions;
    • b. Evaluation
    • c. Staffing
    • d. Implementation
55. Q59 Term used for the initial outlays required to analyze a project that cannot be recovered even if project is accepted:
    • a. Opportunity Cost
    • b. Debt
    • c. Sunk Cost
    • d. Total cost
56. Q60 Type of externality where the new project takes sales from the existing product is known
    • a. Opportunity Cost
    • b. Trade Off
    • c. Cannibalization
    • d. Product depth
57. Q61 Incremental Cash Flows is equal to:
58. Q62 If transaction exposure is in same dates, then it can be hedged
    • a. By purchasing single forward contract
    • b. By purchasing multiple forward contract
    • c. Cannot be hedged by forward contracts
    • d. Can be hedged in OTC Ans: a) By purchasing single forward contract
59. Q63 The process of converting a foreign currency into the currency of one’s own country is
    • a. Exchange
    • b. Submission
    • c. Repatriation
    • d. None of the above
60. Q64 All project with PI > 1.0 is:
    • a. Rejected
    • b. Kept Hold
    • c. Accepted
    • d. Transferred
61. Q65 Factors not affecting changes in exchange rates:
    • a. Cap movement
    • b. Inflation
    • c. Interest rate
62. Q66 The risk occurs when company trades, borrows or lends in a foreign currency is:
    • a. Translation Risk
    • b. Transaction Risk
    • c. Political Risk
    • d. Economic Risk
63. Q67 Following techniques are used for managing foreign exchange risk except:
    • a. Matching
    • b. Leading and lagging
    • c. Invoicing in domestic currency
64. Q68 Following are the external techniques for managing foreign exchange risk except :
    • a. Forward contract
    • b. Futures contract
    • c. Options contract
    • d. Price adjustment
65. Q69 An investor looking at reducing his risk is known as:
    • a. Speculator
    • b. Hedger
    • d. Trader
66. Q70 If two banks are quoting the following GBP INR rates; Bank A 78.9810-79.1110. Bank B 79.0110-79.2350 . the arbitrage opportunity will be :
    • b. Zero
67. Q71 Interest rate swaps are usually possible because international financial markets in different countries are
    • a. Efficient
    • b. Perfect
    • c. Imperfect
68. Q72 Subtraction method is frequently followed for taxation system
    • a. Income Tax
    • b. Withholding tax
    • c. Direct tax
    • d. VAT
69. Q73 Tax havens include all of the following, except
    • b. Bahamas

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