International Finance and Treasury MCQ Questions and Solutions with Explanations

41

Three major reasons to study international finance include

A) to understand a global economy B) to understand the impact of global finance on businesses C) to make intelligent personal decisions D) all of the above

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Answer & Solution

Answer: Option D

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42

The difference between a forward trade and a derivative may be attributed to which one of the following?

A) The position of owning a good that one plans to sell in the future, the position of expecting to purchase the good in the future B) The parties agree to trade at a specified time in the future, at a price set now; derivative involves only payments of money, with no delivery of any commodity or assets C) The parties agree to trade at a future time, at a price to be decided in future; a derivative involves payments at a future specified time along with physical delivery of any commodity or asset D) The parties agree to trade and the amounts to be paid or received will not depend on the value at that time

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Answer & Solution

Answer: Option B

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43

In India, the spot market settlement is done in

A) 1 day B) 2 days C) 4 days D) on that day

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Answer & Solution

Answer: Option B

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44

Which of the following statement is true for BIS (Banks for International Settlement)?

A) It seeks to promote global cooperation between countries. It also helps nations suffering from a financial crisis B) It is sometimes called 'the central bank of central banks' or 'the last resort lender' C) Both A and B are correct D) Both A and B are incorrect

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Answer & Solution

Answer: Option C

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45

Which of the following statement is true?

A) (FEM) is the market where the participants can buy, sell, and exchange and currency speculation B) Foreign exchange markets consist of central banks, companies, banks, brokers investors, investment management companies, hedge funds in retail fore C) It facilitates exchange of one currency for another. Larger commercial banks serve this market by keeping stocks of each currency so that people, groups or even MNCs can satisfy their requests D) All of the above

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Answer & Solution

Answer: Option D

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46

Which of the following agencies does not facilitate international finance?

A) IMF B) World Bank C) BIS D) IDBI

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Answer & Solution

Answer: Option D

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47

Match the following.

List-I	List-II
a. Euro currency	1. Euro lent in USA
b. Euro bond	2. Securities offered in other currency
c. Euro	3. Currency of EU

A) a-1, b-3, c-2 B) a-1, b-2, c-3 C) a-3, b-1, c-2 D) a-3, b-2, c-1

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Answer & Solution

Answer: Option B

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48

Exchange rate entail delivery of trade currency within two business days known as

A) currency forward rate B) currency future rate C) current/spot rate D) bid rate

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Answer & Solution

Answer: Option C

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49

Match the following.

List-I	List-II
a. Increase in inflation	1. Appreciation of home currency
b. Increase in interest rate	2. Reduction in home currency
c. lncrease in exports	3. Reduction in foreign currency

A) a-1, b-3, c-2 B) a-1, b-2, c-3 C) a-3, b-1, c-2 D) a-2, b-1, c-3

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Answer & Solution

Answer: Option D

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50

Under foreign exchange risk measurement, economic risk emerges out of which of the following?
1. Riskiness of company's foreign exchange positions resulting from its business activities.
2. The holding period or length of time over which the foreign exchange position is planned to be held.
3. A change in the present value of the future after tax cash flows due to changes in exchange rates.
4. The unit of currency to be used for the denomination of the value of currency.

A) Only 1 B) Both 1 and 2 C) Only 3 D) Only 4

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Answer & Solution

Answer: Option C

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