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This set of International Finance Multiple Choice Questions & Answers (MCQs) focuses on International Finance Set 5
Q1 | Money market instruments include all the following, except _____________
- Commercial papers
- T -Bills
- Certificate of Deposit
- Equity shares
Q2 | In Quote of 1$ = Rs.61, __________ is a home country.
- India
- US
- France
- Australia
Q3 | If USD /CAD 1.1630, 3 months forward 1. 1675.Annualized interest rate CAD 6%,USD 4%. Arbitrage gain will be_____________
- 0
- 1078
- 1087
- 1870
Q4 | PPP theory ____________government intervention.
- Ignores
- Includes
- Requires
- Fishers
Q5 | ________ theory states that exchange rate between two currencies is directly affectedby their interest rates.
- IRP
- PPP
- Fisher`s
- Home Foreign
Q6 | If formula I of Fishers effect is positive, Borrow ___________ , invest __________.
- Foreign, Home
- Foreign, Foreign
- Home, Home
- Home Foreign
Q7 | __________ is a standardized contract to exchange one currency for another at a specialdate in the future at a price (exchange rate) that is fixed on the purchase date.
- Futures Contract
- Options Contract
- Swaps
- Forward contract
Q8 | The _______ requires that an upfront margin to trade on an exchange.
- Currency forwards
- Currency options
- Currency FTF`s
- Currency Futures
Q9 | Which of the following is false ________
- Futures contracts trade on a financial exchange
- Futures contracts are more liquid than forward contracts
- Futures contracts are marked to market
- Futures contracts allow fewer delivery options than forward contracts
Q10 | Which of the following does the most to reduce default risk for futurescontracts_________
- High liquidity
- Flexible delivery arrangements
- Marking to market
- Credit checks for both buyers and sellers
Q11 | Foreign currency forward market is ___________
- An over the counter unorganized market
- Organized market without trading
- Organized listed market
- Unauthorized listed market
Q12 | Which of the following financial instruments is primarily used to transfer risk_____________
- Bonds
- Home Mortgages
- Futures Contract
- Stocks
Q13 | An option giving the buyer of the option the right but not the obligation to buy acurrency is _____________
- Call option
- Put option
- Forward option
- Future option
Q14 | Regulation _________ of federal Reserve Act imposed a ceiling on interest rates thatcould be paid on deposits by Banks in the US.
- P
- Q
- R
- M
Q15 | __________ bond is issued in a local market by a foreign borrower, denominated inlocal currency.
- Foreign
- Euro
- Domestic
- Euro Credit
Q16 | ___________ once issued bonds with coupon rates tied to its financial performance.
- Electrolux
- Wait Disney
- Japan
- Infosys
Q17 | ______________ is type of security listed on Luxembourg.
- ADR
- GDR
- IDR
- CDR
Q18 | Level _________ ADR `s must comply with various SEC rule, including fullregistration and reporting requirements of SEC.
- I
- II
- III
- IV
Q19 | ADR `s are dominated in _______ currency.
- US $
- Euro
- GBP
- INR
Q20 | In ADR and GDR process, _______ issues the depository Receipts in Foreign Markets.
- Custodian bank
- Depository Bank
- Issuing Company
- Lead manager
Q21 | The Dow Jones Industrial Average (DJIA) contains _________ of the largest and most influential companies (blue chip companies) is the US__________
- 35
- 25
- 40
- 30
Q22 | Required Return from an investment =____________
- Risk free return + Risk premium
- Risk free Return – Risk Premium
- Risk free return x Risk premium
- Risk free Return / Risk Premium
Q23 | IPO stands for ____________
- Indian Profit Organization
- Investment and Public Offering
- Initial Public Offering
- Initial Prospectus Offering
Q24 | An unsponsored ADR, __________
- Complies with regulatory reporting
- Is listed on International stock exchanges
- Trades in OTC market
- Is issued by a bank on behalf of foreign company whose equity serves as underlying asset
Q25 | ________ was introduced at a time when forex reserves of the country were low.
- FERA
- FEMA
- GATT
- IMF