International Finance and Treasury MCQ Questions and Solutions with Explanations

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-8 section-9

In international financial environment for settlement of debts there is a practice known as netting practice. The netting practice pertains to which one of the following?

A) A practice by which subsidiaries of affiliates within the TNC network settle inter-subsidiary debts for the net amount owed during the post-transaction period B) A practice involving the sale of export accounts receivable to a third party within the TNC network C) A practice of purchasing an account receivable where the credit term exceeds the permissible limit within the TNC network D) Where the difference between international transaction of gross capital account receivables and payables are settled against current account receivables and payables

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Answer & Solution

Answer: Option A

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Which of the following is false?

A) Futures contracts are more liquid than forward contracts B) Futures contracts trade on a financial exchange C) Futures contracts are marked to market D) Futures contracts allow fewer delivery options than forward contracts

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Answer: Option D

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Today, important factor that result in augmentation in international bond market is

A) low interest rates B) high interest rates C) moderate interest rates D) all of the above

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Answer: Option A

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The given statements are related to financial derivatives. Choose the correct answer for the statements being correct or incorrect.
Statement I A speculator will gain, if he sells foreign currency under a forward contract, when the spot price is higher than the forward price.
Statement II In currency futures, intra currency spread exists when a speculator buys/sells the same currency for two delivery dates.

A) Statement I is correct, but Statement II is incorrect B) Statement II is correct, but Statement I is incorrect C) Both statement are correct D) Both statements are incorrect

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Answer & Solution

Answer: Option B

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Which of the following is not a feature of IFM?

A) IFM faces foreign exchange exposure B) IFM works in perfect market situations C) IFM deals with expanding operation sets of the company D) IFM incorporates political risk

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Answer: Option A

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Which of the following statement is correct?
1. The interest rate in international credit market is depended on the LIBOR rate.
2. LIBOR varies in countries due to difference in the supply demand of a particular currency.
3. LIBOR is a fixed interest rate at which banks give loans to each other.

A) Both 2 and 3 B) Both 1 and 3 C) Both 1 and 2 D) All of the above

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Answer: Option C

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