Foreign Exchange Management Set 3
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This set of Foreign Exchange Management Multiple Choice Questions & Answers (MCQs) focuses on Foreign Exchange Management Set 3
Q1 | Which of the following is not an example of an international trade draft?
- Time draft.
- Sight draft.
- Both the first and second answers are correct
- Usance draft
Q2 | A group of European countries have formed a union and created a commoncurrency known as __________.
- the EU currency
- the European Union
- the EMU
- the Euro
Q3 | The forward exchange rate __________.
- is the rate today for exchanging one currency for another for immediate delivery
- is the rate today for exchanging one currency for another at a specific future date
- is the rate today for exchanging one currency for another at a specific location on a specific future date
- is the rate today for exchanging one currency for another at a specific location for immediate delivery
Q4 | The spot exchange rate __________.
- is the rate today for exchanging one currency for another for immediate delivery
- is the rate today for exchanging one currency for another at a specific future date
- is the rate today for exchanging one currency for another at a specific location on a specific future date
- is the rate today for exchanging one currency for another at a specific location for immediate delivery
Q5 | What are the forms of assistance that the World Bank provides to its members?
- Technical and financial
- Political and financial
- Political and economic
- Technical and military
Q6 | The World Bank Group is made up of how many organisations?
- 3
- 5
- 8
- 10
Q7 | The most liquid asset among the following is?
- Gold
- Share
- Cash
- land
Q8 | The system operated by the WTO is known as the
- multilateral trading system
- bilateral trading system
- ratified system
- ungratified system
Q9 | 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
Q10 | A deposit or borrowing domiciled outside the home country of the currency is called as
- foreign bond
- euro bond
- euro currency
- domestic bond
Q11 | The price at which a market maker is prepared to sell (a currency) or lend (money)
- forward rate
- sport rate
- bid rate
- offer rate
Q12 | Bretton woods agreement arrived at in
- July 1994
- July 1954
- June 1960
- June 1964
Q13 | A contract that gives the buyer the right to buy commodity or a foreign currencyfrom the seller at a fixed price is called as
- put option
- call option
- cross option
- currency swap
Q14 | CIF stands for
- Cost, interest, freight
- Cost, income, freight
- Cost, insurance, freight
- Customs, insurance, freight
Q15 | The market where long term securities (shares, bonds, etc) are bought and sold iscalled as
- money market
- capital market
- primary market
- secondary market
Q16 | A bank located usually in another country that provides service for another bank is
- Foreign bank
- Central bank
- Correspondent bank
- World bank
Q17 | _______________ is a process of taking advantage of differentials in interest ratesof two currencies while eliminating exchange risk.
- Hedging
- Insurance
- Covered – Interest Arbitrage
- Exposure
Q18 | Quotation where the price of one unit of foreign currency is given in terms of localcurrency units is called as
- Indirect quotation
- . Direct quotation
- Open-ended quotation
- Close – ended quotation
Q19 | FOB stands for
- Freight on board
- Free on board
- Flexible on board
- Future on board
Q20 | An operation in order to protect the domestic currency value of an asset or a liabilitythat is denominated in foreign currency is called as
- Hedging
- Hermes
- Indexation
- Leading
Q21 | Difference between buying and selling rates in an exchange rate or interest ratequotation is known as
- Strike price
- Spread
- Swap points
- Spot rate
Q22 | The price which one subsidiary or one unit of business charges from another forselling goods or providing services is
- Transfer price
- Strike price
- Spot price
- Forward rate
Q23 | The bond that does not pay any interest and issued at a price lower than itsreimbursement value is called as
- Zero coupon bond
- Coupon bond
- Euro bond
- Domestic bond
Q24 | International Development Association established in
- 1970
- 1962
- 1960
- 1958
Q25 | International Finance Corporation established in
- 1956
- 1960
- 1966
- 1970