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International Finance and Treasury MCQ Questions and Solutions with Explanations | Management

International Finance and Treasury MCQ Questions and answers with easy and logical explanations. Management provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. International FinanceMCQ is important for exams like MAT, CAT, CA, CS, CMA, CPA, CFA, UPSC, Banking and other Management department exam. Page-4 section-2

Each section contains 100 MCQs on International Finance and Treasury .
31
The forward market is especially well-suited to offer hedging protection against.
Discuss
Answer & Solution
Answer: Option B
Solution:
The forward market is especially well-suited to offer hedging protection against transactions risk exposure. Transaction exposure, defined as a type of foreign exchange risk faced by companies that engage in international trade, exists in any worldwide market. It is the risk that exchange rate fluctuations will change the value of a contract before it is settled.
32
The euro is the name for
Discuss
Answer & Solution
Answer: Option C
Solution:
The euro is the name for a common European currency. On January 1, 1999, the European Union introduced its new currency, the euro. Originally, the euro was an overarching currency used for exchange between countries within the union, while people within each nation continued to use their own.
33
What basis the exchange rates are determined
Discuss
Answer & Solution
Answer: Option C
Solution:
On demand and supply basis the exchange rates are determined. The demand–supply model of exchange rate determination implies that the equilibrium exchange rate changes when the factors that affect the demand and supply conditions change.
34
The balance of payments always has a zero balance. This is caused by.
Discuss
Answer & Solution
Answer: Option C
Solution:
The balance of payments always has a zero balance. This is caused by the system of double entry bookkeeping. Double entry, a fundamental concept underlying present-day bookkeeping and accounting, states that every financial transaction has equal and opposite effects in at least two different accounts.
35
Markets in which funds are transferred from those who have excess funds available to those who have a shortage of available funds are called.
Discuss
Answer & Solution
Answer: Option D
Solution:
Markets in which funds are transferred from those who have excess funds available to those who have a shortage of available funds are called financial markets. A financial market is a broad term describing any marketplace where trading of securities including equities, bonds, currencies, and derivatives occur.
36
The bond markets are important because.
Discuss
Answer & Solution
Answer: Option C
Solution:
The bond markets are important because they are the markets where interest rates are determined. The bond market broadly describes a marketplace where investors buy debt securities that are brought to the market by either governmental entities or publicly-traded corporations. National governments generally use the proceeds from bonds to finance infrastructural improvements and pay down debts.
37
Increasing interest rates.
Discuss
Answer & Solution
Answer: Option A
Solution:
Increasing interest rates discourage corporate investments. Higher interest rates tend to moderate economic growth. They increase the cost of borrowing, reduce disposable income and therefore limit the growth in consumer spending. Higher interest rates tend to reduce the rate of economic growth and inflationary pressures.
38
The exchange rate is the.
Discuss
Answer & Solution
Answer: Option D
Solution:
The exchange rate is the Price of one country currency in terms of another country currency. An exchange rate is the value of a nation's currency in terms of the currency of another nation or economic zone.
39
Net exports refers to.
Discuss
Answer & Solution
Answer: Option A
Solution:
Net exports refers to total exports minus total imports. Net exports are the value of a country's total exports minus the value of its total imports. It is a measure used to aggregate a country's expenditures or gross domestic product in an open economy.
40
Which of the following is not considered a unilateral transfer?
Discuss
Answer & Solution
Answer: Option B
Solution:
Income earned from foreign investments is not considered a unilateral transfer. A unilateral transfer is a one-way transfer of money, goods, or services from one country to another. The prefix "uni" means one. In a unilateral transfer, one party is making a transfer to the other party.