International Finance and Treasury MCQ Questions and Solutions with Explanations

Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 Section 9

31.
Foreign currency forward market is

A. an over the counter unorganised market

B. organised market without trading

C. organised listed market

D. unorganised listed market

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32.
Which of the following statement is true about foreign exchange market?

A. It is accessible round the clock

B. It is highly illiquid

C. It has high trading cost

D. Both B and C

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33.
Match the following.

List-I List-II

a. Forward 1. Exchange

b. Future 2. No obligation

c. Option 3. OTC

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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34.
Simplicity with which bondholders and shareholders can change their investments into cash is known

A. barter

B. hedging

C. arbitrage

D. liquidity

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35.
When a direct quote of the home currency or any other currency is not available in the forex market, it is computed with the help of exchange quotes of others pairs of currencies, is referred to by which one of the following?

A. Cross rate

B. Arbitrage rate

C. Transaction rate

D. Translation rate

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36.
Purchasing power parity theory signifies which one of the following?

A. Ability to exchange one currency for another at a given conversion rate and in terms of the usability of a currency for foreign transactions

B. Which states that exhange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries

C. When one party of an economic transaction has equal degree of information in currency market abdilt it and shared equally to arrive at uniform foreign exchange selection decision

D. No one party can significantly influence foreign exchange rate in the market and all will be guided by asymmetric information

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37.
Which of the following statements are correct?
1. A put option is said to bein the money or favourable for the option holder when the strike price is higher than the spot price.
2. A put option is said to be out of money when the strike price is lower than the market price.
3. Fir an option writer the maximum gain is the amount of premium received by the put option holder.

A. Both 1 and 2

B. Both 1 and 3

C. Both 2 and 3

D. All of the above

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38.
Which of the following statement is true about international capital market?

A. Limits available set of lending opportunities

B. Increases overall portfolio risk for investors

C. Allows investors to reduce risk by holding international securities whose price move independently

D. It is easily accessible to everyone

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39.
The activity of making profit through buying a currency cheap in one market and selling it dear in the other market at a particular point of time is known as

A. Forward currency

B. Currency arbitrage

C. Speculation of currency

D. Depreciated currency

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40.
Which of the following organsations play an active role to prevent the contagion situation of crisis, such as the Greek Sovereign debt crisis?

A. IMF

B. World Bank

C. WTO

D. UNCTAD

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1 2 3 4 5 6 7 8

List-I	List-II
a. Forward	1. Exchange
b. Future	2. No obligation
c. Option	3. OTC

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

31. Foreign currency forward market is

Answer & Solution

32. Which of the following statement is true about foreign exchange market?

Answer & Solution

33. Match the following. List-I List-II a. Forward 1. Exchange b. Future 2. No obligation c. Option 3. OTC

Answer & Solution

34. Simplicity with which bondholders and shareholders can change their investments into cash is known

Answer & Solution

35. When a direct quote of the home currency or any other currency is not available in the forex market, it is computed with the help of exchange quotes of others pairs of currencies, is referred to by which one of the following?

Answer & Solution

36. Purchasing power parity theory signifies which one of the following?

Answer & Solution

Answer & Solution

38. Which of the following statement is true about international capital market?

Answer & Solution

39. The activity of making profit through buying a currency cheap in one market and selling it dear in the other market at a particular point of time is known as

Answer & Solution

40. Which of the following organsations play an active role to prevent the contagion situation of crisis, such as the Greek Sovereign debt crisis?

Answer & Solution

Read More Section(International Finance and Treasury)

31.
Foreign currency forward market is

32.
Which of the following statement is true about foreign exchange market?

33.
Match the following.

List-I List-II

a. Forward 1. Exchange

b. Future 2. No obligation

c. Option 3. OTC

34.
Simplicity with which bondholders and shareholders can change their investments into cash is known

35.
When a direct quote of the home currency or any other currency is not available in the forex market, it is computed with the help of exchange quotes of others pairs of currencies, is referred to by which one of the following?

36.
Purchasing power parity theory signifies which one of the following?

38.
Which of the following statement is true about international capital market?

39.
The activity of making profit through buying a currency cheap in one market and selling it dear in the other market at a particular point of time is known as

40.
Which of the following organsations play an active role to prevent the contagion situation of crisis, such as the Greek Sovereign debt crisis?