International finance Set 1
On This Page
This set of International Business Multiple Choice Questions & Answers (MCQs) focuses on International finance Set 1
Q1 | In a quote exchange rate, the currency that is to be purchase with another currency is called the
- liquid currency
- foreign currency
- local currency
- base currency
Q2 | An economist will define the exchange rate between two currencies as the:
- amount of one currency that must be paid in order to obtain one unit of another currency
- difference between total exports and total imports within a country
- price at which the sales and purchases of foreign goods takes place
- ratio of import prices to export prices for a particular country
Q3 | India is facing continuous deficit in its balance of payments. In the foreign exchange marketrupee is expected to
- depreciate.
- appreciate.
- show no specific tendency.
- depreciate against currencies of the countries with positive balance of payment and appreciate against
Q4 | The demand for domestic currency in the foreign exchange market is indicated by the followingtransactions in balance of payment
- export of goods and services
- import of goods and services.
- export of goods and services and capital inflows.
- import of goods and services and capital outflows.
Q5 | The price at which a market maker is prepared to buy (a currency) or borrow (money) is termed as
- spot rate
- bid rate
- ask price
- forward rate
Q6 | The __________ is especially well suited to offer hedging protection against transactions risk exposure.
- forward market
- spot market
- transactions market
- inflation-rate market
Q7 | Difference between buying and selling rates in an exchange rate is known as
- strike price
- spread
- swap points
- spot rate
Q8 | Exchange rate between currency A and currency B, given the values of currencies A and B with respect toa third currency is known as
- golden standard
- flexible exchange rate
- fixed exchange rate
- cross exchange rate
Q9 | The swap arrangement where principal amounts are not exchanged, but periodical payments will be
- currency swap
- cross currency interest swap
- interest rate swap.
- non-financial swap.
Q10 | What is FEMA?
- first exchange management act
- foreign exchequer management act
- foreign exchange management act
- d)foreign evaluation management act
Q11 | ______________ involve the exchange of currency the second day after the date on which the twoforeign exchange traders agree to the transaction.
- spot transactions
- outright forward transactions
- fx swaps
- reverse transactions
Q12 | Outright forward transactions involve the exchange of currency beyond three days at a fixed exchangerate, known as the:
- spot rate.
- forward rate
- fx swap rate.
- reverse transaction rate
Q13 | The biggest market for foreign exchange is which of the following?
- new york
- tokyo
- london
- china
Q14 | The ______________ is the price at which the trader is willing to buy foreign currency.
- offer
- bid
- spread
- cross rate
Q15 | Which of the following is the price at which the trader is willing to sell foreign currency?
- bid
- spread
- offer
- cross rate
Q16 | .………is only a legal agreement and it is not an institution, but ….. is a permanent institution.
- gatt, wto
- wto, gatt
- wto, imf
- imf, gatt
Q17 | The WTO was established to implement the final act of Uruguay Round agreement of ……
- mfa
- gatt
- trip’s
- uno
Q18 | WTO stands for
- world technology association
- world time organization
- world trade organization
- world tourism organization
Q19 | What is the name of the international organization that fosters monetary and financial cooperationand serves as a bank for central banks?
- wto
- eu
- world bank
- bank for international settlements
Q20 | Which of the following are institutional banks that provide financial support and professional advicefor developing countries?
- a) multilateral development banks
- b) central banks
- c) investment banks
- d) barclays bank
Q21 | In the foreign exchange market, the ________ of one country is traded for the ________ of anothercountry.
- currency; currency
- currency; financial instruments
- currency; goods
- goods; goods
Q22 | Which of the following examples definitely illustrates a depreciation of the U.S. dollar?
- the dollar exchanges for 1 pound and then exchanges for 1.2 pounds.
- the dollar exchanges for 250 yen and then exchanges for 275 francs.
- the dollar exchanges for 100 francs and then exchanges for 120 yen.
- the dollar exchanges for 120 francs and then exchanges for 100 francs
Q23 | Interest rate swaps are usually possible because international financial markets in different countriesare
- efficient
- perfect
- imperfect
- both a & b
Q24 | The exchange rate is the
- total yearly amount of money changed from one country’s currency to another country’s currency
- total monetary value of exports minus imports
- amount of country’s currency which can exchanged for one ounce of gold
- price of one country’s currency in terms of another country’s currency
Q25 | A speculator in foreign exchange is a person who
- buys foreign currency, hoping to profit by selling it a a higher exchange rate at some later date
- earns illegal profit by manipulation foreign exchange
- causes differences in exchange rates in different geographic markets
- none of the above