International Finance Combined
This document was uploaded by user and they confirmed that they have the permission to share it. If you are author or own the copyright of this book, please report to us by using this DMCA report form. Report DMCA
Overview
Download & View International Finance Combined as PDF for free.
More details
- Words: 57,674
- Pages:
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates Select The Blank Question ________ is the agency of ICC which deals with the maritime crime. Correct Answer International Maritime Bureau Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your Answer
Buffer Stock Facility
True/False Question
Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of payment Your Answer The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer US Dollar
Your Answer
US Dollar
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Factors' values
Weightages %
Factors' values
100% of total
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer
Pegged to Single currency
Match The Following Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity is delivered
Last date of exercising option
Note issuance facility
Euronotes
Euronotes
Bearer security issued in Eurobonds currency other than that of the country of issue
Eurobonds
Margin on future
Peformance bond or security deposit
Peformance bond or security deposit
True/False Question
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct Answer False Your Answer
False
True/False Question
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What are margins, with reference to futures market? Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Your Answer Which enables the investor to market the same in the secondary market Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer Preshipment credit up to six months for construction and turnkey projects abroad Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily. Correct Answer Economies Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer US Dollar Your Answer
US Dollar
Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer Control by Government' Your Answer
Recurrence
Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer Sharing of risk of non payment by supplier
Your Answer
True/False Question
Sharing risk of Non payment by the Syndicate of Banks giving loans
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them True/False Question
Funding Options in domestic yen market are Futures, FRAs, Call and put options. Correct Answer True Your Answer
True
True/False Question
There is no difference between CIP and CIF contracts except the mode of transportation. Correct Answer True Your Answer
True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade
Your Answer
Companies which have international trade
Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Primary activity
Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer
An Irrevocable credit
True/False Question
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. Correct Answer False Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer Preshipment credit , Post shipment credit , Duty Draw back Your Answer
Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value Multiple Choice Multiple Answer
Question
What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer Buy when you are having short position Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer? Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount
Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer Prices of capital market instruments change and are expected to change drastically Your Answer Prices of capital market instruments change and are expected to change drastically True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer False Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed
Chapter – 1 – Introduction to international capital markets Euro currency ; domestic markets ; US Japan ; Switzerland ; UK ; Australia ; Canada ; European ; centers in ECU; Chapter – 2 – International Finance Markets - the U.S. dollar Market ; The U.S. Dollar Market ; The Japanese Yen Market ; The Sterling Market ; The Euro Market Has Been discussed in the next chapter ; Recent development in international Finance Markets ; Chapter – 3 – International Monetary and Financial System The country’s central ban agreed to buy back their currency at a certain rate of gold; Melting down of gold was freely allowed ; There was unrestricted movement of gold (i.e. import and / or export) The total money supply in the country was determined by the quantum of gold reserves in the country The international monetary fund ; quotas ; funding facilities ; regular facilities tranche policies ; restore Tranche credit Tranche ; extended arrangement (extended fund facility
1 5 – 10
13 – 14
15 – 17
(EEF) ; Standard Arrangement (enlarged Arrears Policy) Special facilities (compensatory and contingency financing facility (CCFF) Buffer stock Financing Facility ; Supplemental Reserve Policy (SRP); Reserve Tranche ; Credit Tranche ; Stand by arrangement ; Extended arrangement or extended fund facilities (EFF) special facilities ; CCFF ; Buffer stock financing Facility (BSFF) ; Supplemental resources facility (SRF) Enhanced structural adjustment facility (ESAF) The fixed exchange rate system Problems faced by the fixed exchange rate system ; failure of fixed rate system ; the European monetary system (EMS) ; Economic and monetary union ; Recent developments ; post – Maastricht developments; emergence of EURO The group of seven ; special drawing rights (SDRS) ; The liquidity problems (SDRS) ; the world bank group ; the world bank; international development agency (IDA) ; international finance corporation (IFC) ; The multinational investment Guarantee Agency (MIGA) Chapter – 4 – External commercial borrowing – country ; company ; Equity ; Fund raising ; underwriting ; hedging ; arbitraging ; note issuance facility ; Mechanism and documentation ; syndicated loans ; floating rate notes ; Flip – Flop FRN ; MIS – Mich FRN ; MINI Max FRN ; Capped FRNs, Perpetual FRNs; VRN structured FRNs; Terms and conditions of FRN Ero Commercial paper (ECP) ; ADRs and GDRs; GDR – Global depositary Receipts ; The roles of different parties involved in launching of GDR GDR – Global Depositary Receipts ; The roles of different parties involved in launching of GDR steps involved in issuance of GDR are as follows Pricing and Closing ; costs ; Advantages & Disadvantages of external commercial borrowing Chapter – 5 – Documents used in International Trade ; Regulatory requirements ; operational requirements ; commercial documents ; financial documents transport documents ; risk covering documents ; official / regulatory documents ; miscellaneous documents ; Commercial documents ; proforma invoice ; commercial invoice ; consular invoice customs invoice ; legalized invoice ; combined certificate of origin and value ; financial documents ; bill of exchange ; The second of the same tenor and date unpaid ; the first of the same tenor and date unpaid ; or similar words ; sight B/E; Tenor ; time B/E; DP Basis ; document against Payment Basis ; Documents against Acceptance Basis Transport documents; bill of lading ; received for shipment bill of lading ; on board bill of lading ; Short form bill of lading ; long form bill of lading clean bill of lading ; claused bill of lading ; through bill of lading ; straight bill of lading ; charter party Bill of lading ; container bill of lading container bill of lading ; combined transport B/L or Mulit Modal B/L lash bill of lading house bill of lading ; Airway bill ; Air consignment Note ; House Air way bill ; Postal Receipt ; Courier /Expected delivery service ; multimodal transport document ; risk covering documents ; insurance policy ; Insurance cover note ; official documents export declaration forms ; export certificate; Certificate of origin ; Miscellaneous documents ; packing list ; weight certificate ; certificate of analysis and quality ; certificate of inspection ; health certificate ; phytosanitary / Radiation / Fumigation Chapter 6 – Methods of payment ; advance payment ; bill for collection ; open account ; barter trade ; bank guarantee ; letter of credit (L / C) Seller wants buyer wants ; parties to a
18 – 19 20 – 23 24 – 27 31 – 35 36 – 39
40 – 41 43 – 46
47 – 49
50 – 53
55 – 57
61 – 66
documentary credit ; applicant issuing bank advising ; confirming bank beneficiary ; negotiating bank ; reimbursing bank Types of letters of credit ; revocal letter of credit ; irrevocable letter of credit ; confimed irrevocable letter of credit ; transferable l / c revolving letter of credit ; credit available by installments; back to back letter of credit ; anticipatory credit or red clause letter of credit ; green clause letter of credit ; deferred payment letter of credit ; standby letter of credit ; flow chart of export transaction under letter of credit Flow chart of export transaction under letter of credit ; various steps in the transaction are as under ; steps no. description Chapter 7 – Export / Import Finance ; - Part I import finance ; import financing through trust receipts / import loans ; import financing through issuing l/ c or bank guarantee ; part II – Export Finance Timely ; adequate ; cheaper on liberal terms ; sources for raising finance ; own funds ; 2 friends and relative ; 3 advance payment from buyer ; 4 Trade credit from suppliers 5 banks and financial institutions ; pre-shipment credit (P.C) Post shipment credit ; advance against cash incentives / duty draw back ; forfeiting ; rediscounting of export bills abroad ; buyer’s credit ; supplier’s credit Chapter – 8 – Procedure in connection with foreign investment in India – Seciton – I foreign direct investment ; FERA ; the practice at which a company can issue shares to non residents ; fema ; esop ; section II – Foreign technical collaboration ; General Hotel & Tourism Related Industries ; procedure for granting approval; I / We hereby certify that ; Documentation ; Standard conditions attached to approval for technology agreement ; no objection ; the agreement shall be subject to Indian laws: Section – III – Portfolio investment ; explanation ; the regulations regarding portfolio investments by NRIs / PIOs are as under ; NRI / PIOs ; Section – IV – Other investments ; Section V – procedure for opening branch / project / Liaison office ; Chapter – 9 – Direct investment outside India – overseas investment division TDR ADR GDR the criteria for investment under the automatic route are as under ; JV/WOS; ODA; The schemes for overseas investment by partnership firms ; criteria for overseas investment by a registered partnership firm under the automatic route ; The procedure to be followed by a partnership firm for making investment under the automatic route ; the procedure to be followed by partnership firms which are not eligible under the automatic route ; restrictions for setting up of a second generation company ; resident individual India can acquire foreign securities without prior approval in the following cases ; provided that ; WOS Chapter – 10 – Taxation ; Bilateral relief Unilateral relief ; for the purpose of this provision Part – 2 Forex risk management and hedging techniques Chapter – 1 Foreign exchange markets – The international Market ; survey were ; the market ; the participants ; information and communication system ; the payment system ; the foreign exchange market in India Chapter – 2 – Exchange Rates – Exchange rage quotes ; direct and indirect rates ; direct rates ; indirect rates; spot and forward rates value rate; ready or cash ; value today ; TOM; spot ; forwards; glossary of market terms; Foreign exchange risks ; transactions exposure ; translation exposure ; economic exposure; Translation – moving towards a consensus ; economic exposure ; an overview ; scenario exchange rages in India ; Inward remittances export encashment of foreign currency
67 – 69
70 – 71 73 – 74
75 -76 79 – 83 84 – 88 89 - 92 95 – 99
100 – 102
105 – 106 109 – 114 117 – 123
124 – 127
travelers cheques ; encashment of foreign currency notes; outward remittances ; imports ; issuing foreign currency travelers cheques issuing foreign currency notes ; Type of transaction exchange rate nomenclature ; Factors affecting movement of exchange rates ; summary Chapter – 3 – Forward contracts - Forward cover for merchants – forward purchase cover forward sales contract - repayment of foreign currency loans – period of delivery – cross currency booking (sale / Purchase ) ; utilization of the forward cover ; cancellation ; calculation of exchange rates for forward contracts Cancellation ; early delivery and rollover of forward contracts ; forward sale contracts ; forward purchase contract ; early delivery ; rollover charges Chapter 4 – Options and Futures – History and development ; recent trends ; key features of options and futures ; premium ; maturity or expiration date ; exercise ; in the money ; at the money ; out of the money American option European option ; underlying asset price time before expiration ; underlying asset price ; time before expiration the rate of interest volatility Pricing and analysis ; pricing of options ; underlying asset price ; exercise price ; options and futures products today ; interest rate options ; foreign exchange options and futures ; equity linked options ; commodity linked futures and options Chapter – 5 - Swaps What are swaps ; interest rate swaps ; lowering financial cost ; hedge exposure to interest rate risk ; restructuring the debt in the balance sheet ; amortizing and accreting swaps ; forward swaps ; Reversible swaps ; basis swaps Currency swaps ; lowering funding cost ; entering restricted capital markets ; reducing currency risk ; supply demand imbalances in the markets ; amortizing currency swaps ; accreting currency swaps ; floating – for floating rate currency swaps ; interest payments ; asset swaps PART 3 – AGENCIES INVOLVED IN INTERNATIONAL TRADE Chapter – 1 – Export import Bank of India ; Functions of Exim Bank ; the exim bank performs the following functions ; incidental functions ; operations programmes ; direct financial assistance to exporters ; consultancy and technology services ; pre-shipment credit ; facilities for export – oriented units ; overseas investment facility buyer credit facilities for deemed exports small scale industry export bills rediscounting; the latest new schemes in operation since 1992 are the following Chapter – 2 – Reserve Bank of India Exchange controls in India – RBI as the exchange control authority ; Authorized dealers (Ads) ; Money changers ; other receipts ; payment for imports ; other payments ; delegation to Ads; securities ; foreign currency accounts; liberalization of exchange control Sodhani Committee Recommendations ; Exchange rate management ; Chapter – 3 – Foreign Exchange dealers association of India ; Uniform customs and practice for collection ; Chapter 4 – International chamber of commerce – ICC – WCF – IBCC – WCF Chapter – 5 – Export credit guarantee corporation of India ; ECGC; need for export credit insurance ; credit insurance policies ; scr or standard policy ; turnover policy ; small exporter policy ; specific shipment policy (short term); buyer wise policy ; specific policy for supply contract insurance cover for buyer’s credit and line of credit Services Policy ; construction works policy ; maturity factoring ; Guarantees to banks ;
128 – 129 131 – 137
138 – 141 143- 147
148 – 152 155 – 157
158 – 161
163 – 166
169 – 173
174 – 177 179 – 180 183 – 183 189 – 190
191
packing credit guarantee ; export production finance guarantee ; post – shipment credit guarantee ; export finance guarantee ; export performance guarantee; export finance (overseas lending ) Guarantee Part – 4 – Miscellaneous Chapter 1 – Exchange Earner’s foreign currency (EEFC) Status holder exporter ; individual professional ; others; permissible credits ; permissible debits ; Chapter 2 – Country Risk ; Quantifying country risk ; A comprehensive example ; use of country risk ; assessment ; Chapter 3 – International capital Budgeting - The Basic Frame work Chapter 4 – Incoterms – Group E departure EXW ; Group F Main carriage unpaid ; FAS ; FOB ; CFR ; CIF ; CPT ; CIP ; Group C; Group D ; Arrival DAF ; DES ; DEQ; DDU CTD / MTO ; DDP ; delivered duty paid (CTD / MTO) Chapter – 5 – Actuals ; arbitrage ; bankers’ acceptance bond (BAS) ; Bearer Bond ; Bid rate ; Bond ; Bull; call option ; caps ; cash commodity ; cash market ; cedel ; certificate of deposit (CD) class of option ; closing price ; commission ; commercial paper (CP) ; contract specifications ; convertible bond ; coupon ; cover; delivery ; delivery month ; equity ; equity swaps ; equity collar ; Eurobond ; Euro clear ; euro commercial paper; euro –currency ; Exercise price ; expiration date; floating rate note ; fundamental Analysis ; futures contract hedge ; Hybrid ; Interest Rate swap; Intermediation ; Intrinsic Value ; Libor ; Long margin ; margin call maturity naked position ; note issuance facility (NIF) Option ; overbought ; oversold ; physical market ; position ; premium purchaser ; put option ; settlement price short ; speculator ; strike price ; straight debt tap ; technical analysis tranche ; tombstone volatility ; volume ; withholding tax ; yankee bond ;
Chapter – 1 – Introduction to international capital markets Ero currency market ; Domestic market ; US, Japan Switzerland ; uk, australia canada ; european conters in ECU ; Euro ; Asian doller market ; forex marker SDR ; ECU ; US dollar ; German ; Swiss ; Japanees ; France ; Canada ; Australia; Chaper - 2 - International financial Markets - The U.S.Dollar Market ; pricing ; federal reservice board; curency ; central bank of US ; The Japanese Yen Market ; Mof; Long Term Prime Rate ; 1970 japanese The Sterling Market ; 20th 19th century 1979 ; OECD Organization for economic co-operation & development EMS Exchange rate Mechanism; FRN ; Bulldog; the EURO Market has been discussed in the nex chapter Recent development in international financial markets ; septer 11 enron LtCN (Long term capital Management Brazil china and mexico; 1990 ; 1980 ; severe tests financial system; securitization forces banks ; attractive to browwerw; legal issues flexibility ; financial market development segement of ; swaps cash flow ; roject related; gain access to international ; marketability ; new financing techniques;
Chapter – 3 – International Monetary and Financial System
1945 ; 1944 ; intenrational world Bank for reconstruciton and development; second world war was european ; IMF International Monetary Fund; Gold standard first world war The country's Central Bank agreed to buy back their currency at a certain rate of gold;
1 1 2 5 6 7 7 8 9 10 13 13 13
195 199 203 – 204 207- 212 215 – 217
218 -219 220 – 221
melting down of gold was freely allowed There was unrestricted movement of gold (I.e. import and / export The total money supply in the country was determined by the quantum of gold reserves in the country 1870 ; 1914 ; 1821 ; 1834 ; 1870 ; European countries gold standard in 1933 ; 1930 International Monetary Co-operation ; IBRD ; IMF ; popularly known as world bank IMF ; the international monetary fund 1945 ; 1971 ; 25 years ; aims SDR ((special drawing rights ) 25% 1960 ; 1963 ; Gross domestic product; 5 years ; SDR 146 bn to SDR 212 ; 45% ; 1998 ; Two parts Funding Facilities ; Regular Facilities ; Special facilities ; restore tranche credit tranche ; compensatory and contingency financing facility (CCFF) ; Extended arrangement (Extended Fund Facility EEF) ; Buffer stock Financing Facility ; Standard Arrangement (Enlarged Arrears Policy ) ; Supplemental Reserve Policy (Supplemental Reserve Policy (SRP Reserve Tranche ; Credit Tranches ; Stand - By Arrangement Extended arrangement or extended fund facilities (EFF) Special Facilities ; CCFF ; Buffer Stock Financing Facility ; BSFF ; Supplemental Resource Facility (SRF) ; 1997 Enhance Structural Adjustment Facility (ESAF) ; The fixed exchange rate system US dollars 35 ounce of gold Problem faced by the fixed exchange rate system ; 1960 ; value apprehension ; delay in adjustment failure of fixed rate system ; the european monetary system (EMS) European Community Currency Snake ; 1973 ; EMS EC ECU European Currency Unit ; SDR ; ERM ; DM ; matrix german bundesbank EM ; PST ; ERM ; Economic and monetary Union ;
LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question
Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer
True
True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer False Your Answer
False
Select The Blank Question The rate of interest on rupee finance for exports is not exceeding ________ less than PLR.
13 14 14 14 15 16 16 16 17 17 18 18 19 20 20 21
Correct Answer 0.025 Your Answer
50 basis points over LIBOR
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of payment Your Answer The exercise or strike price, the amount , The expiration date and time, the method of payment Multiple Choice Single Answer Question In the syndicated loan arrangement the borrower has to execute :Correct Answer Single Principal loan agreement Your Answer
Single Principal loan agreement
True/False Question
At Least one principal Lender bank is essential for issue of the ADR or GDR. Correct Answer False Your Answer
True
Multiple Choice Single Answer Question US financial system is the freest system because Correct Answer Institutions can introduce new products and instuments at the price of their choice. Your Answer Institutions can introduce new products and instuments at the price of their choice. Multiple Choice Single Answer Question In a coupon swap who is called the buyer? Correct Answer One who pays the fixed rate of interest Your Answer
One who pays the fixed rate of interest
True/False Question
Till August 1994 India was following the Indirect Methodof Rate quotation. Correct Answer False Your Answer
False
Select The Blank Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme. Correct Answer Overseas investment facility Your Answer
Overseas investment facility
Multiple Choice Single Answer Question Under the automatic route of Direct Investment Abroad, what is the restriction on market purchases? Correct Answer 50% of the net worth of the investing company Your Answer
50% of the net worth of the investing company
Multiple Choice Single Answer Question What are the powers of money changers? Correct Answer Purchase and sell foreign currency notes and travellers cheques Your Answer
Purchase and sell foreign currency notes and travellers cheques and also Give export finance
Select The Blank Question Any company involved in foreign exchange transactions is exposed to ________ risk. Correct Answer Currency Your Answer
Currency
Multiple Choice Multiple Answer Question What are the features of Settlement price ? Correct Answer Price established by the clearing house at the end of each trading session , It is used to determine the net gain, loss, margin call and next days price limits Your Answer Price established by the clearing house at the end of each trading session , It is used to determine the net gain, loss, margin call and next days price limits Multiple Choice Multiple Answer Question What are the activities of ICC? Correct Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime Your Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime , Increased Govt regulation of Business True/False
Question
Cause of increase in cost of public issues Underwriting fees , selling commission Correct Answer True Your Answer
False
Select The Blank Question The currency swaps used ________. Correct Answer To lower the risk of currency exposure Your Answer
To lower the risk of currency exposure
True/False Question
The Option period in the forward contract is at the option of the Banker, hence the bank has to be very conservative in quoting rates. Correct Answer False Your Answer
True
Multiple Choice Multiple Answer Question Which factors affect the exchange rates in short time period? Correct Answer Demand and supply, interest rates, inflation, , Sentiment, Speculation Your Answer Demand and supply, interest rates, inflation, , Sentiment, Speculation , GDP,Balance of trade and payment,Unemployment Match The Following Question
Correct Answer
Your Answer
Departure
EXW
EXW
Main carriage paid
CFR
CFR
Main carriage unpaid
FAS
FAS
Arrival
DES
DES
Multiple Choice Multiple Answer Question Sterling Market is attractive for an international investor because Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Your Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds , Linking of issues to currency swaps
True/False Question
In red clause credit some clauses are printed in Red ink.
Correct Answer True Your Answer
False
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the bid rate for USD? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Multiple Answer Question Criteria for investment abroad under automatic route :Correct Answer Activity for investment is core activity of Indian Company. , Total Financial commitment in JV/WOS as per prescribed ceiling Your Answer Activity for investment is core activity of Indian Company. , Total Financial commitment in JV/WOS as per prescribed ceiling Multiple Choice Multiple Answer Question Who can issue the Certificate of Inspection? Correct Answer Export Inspection Council , Person authorised by Importer. Your Answer
Export Inspection Council , Person authorised by Importer.
Multiple Choice Single Answer
Question
Large number of exporters from which country are enjoying the privilege of receiving up front cash from importers in Russia? Correct Answer United Kingdom Your Answer
United Kingdom
True/False Question
In developed markets, speculators play important role in determining the trend of currency rates. Correct Answer True Your Answer
True
Select The Blank Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________. Correct Answer Shelf Registration Your Answer
Shelf Registration
Select The Blank Question In Overseas market the forward rate is generally quoted on the basis of ________. Correct Answer Fixed date Your Answer
Calendar month
Select The Blank Question Forward Margin makes a currency costlier then the currency is at ________. Correct Answer Premium Your Answer
Discount
Multiple Choice Multiple Answer Question These are the parties to the documentary credit :Correct Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bank Your Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bank Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Your Answer
Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Single Answer Question Fixed, Floating or Limited flexibility are used in the context of Correct Answer Exchange Rates Your Answer
Exchange Rates
Select The Blank Question In mid 1992 ________ rejected the ratification of Maastricht treaty Correct Answer Denmark Your Answer
UK
Multiple Choice Multiple Answer Question Under the liberalisation through FEMA, what can an AD offer to the clients, without the prior permission of RBI or Government? Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Your Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Multiple Choice Single Answer Question To whom is an AD required to report the cancellation of forward contracts? Correct Answer No one at all. Your Answer
To Reserve Bank of India, fortnightly
Select The Blank Question ECGC provides cover to an Indian contractor for construction work abroad under ________. Correct Answer Construction works policy Your Answer
Export Performance Guarantee
True/False Question
The Negotiating bank examines the documents submitted by the seller and makes payment if they comply the terms and conditions of the LC. Correct Answer True Your Answer
True
Multiple Choice Single Answer
Question
What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Multiple Answer Question What are the sources of raising funds for exports? Correct Answer Suppliers credit , Forfaiting Your Answer
Suppliers credit , Forfaiting
Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount Your Answer
Discount
Multiple Choice Single Answer Question Name the common forex derivatives :Correct Answer Options, futures Your Answer
Options, futures
True/False Question
Country risk analysis is a futile exercise in the background of cost of analysis. Correct Answer True Your Answer
False
Select The Blank Question Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer
OECD
Match The Following Question Issues linked with LIBOR,LIBID,LIMEAN
Correct Answer
Your Answer
FRNs
FRNs
Issue of bonds without FloatingRate Note fixed rate of interest, linked to short term interest rate in the global market
FloatingRate Note
Issue of loans Syndicated Loans internationally,through arranger, underwriter,co manager, for a large amount for sharing risk of lending
Syndicated Loans
Equity issues in the American or Global foreign markets either as Depository Receipts direct investments or portfolio investments.
American or Global Depository Receipts
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single Answer Question Proforma Invoice, Commercial Invoice, Consaular Invoice are which type of documents? Correct Answer Commercial Documents Your Answer
Commercial Documents
True/False Question
Charter party bills of lading are generally not acceptable to bankers as security because Sea Charters are full of problems. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question Why does a Transaction exposure arise? Correct Answer Trading flows , Dividend or capital flows Your Answer
Trading flows , Dividend or capital flows
Multiple Choice Single Answer Question If a dealer of securities is quoting rate as 200-250 then the rate 200 signifies which rate with reference to him? Correct Answer Bid rate Your Answer
Bid rate
Select The Blank Question A Documentary credit issued on the strength of another documentary credit is known as ________. Correct Answer Back to Back credit Your Answer
Back to Back credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations True/False
Question
Tranche' is a managed issue of securities in smaller denominations. Correct Answer True Your Answer
False
True/False Question
Funding Options in domestic yen market are Futures, FRAs, Call and put options. Correct Answer True Your Answer
True
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Multiple Answer Question Which events can lead to materialisation of country risk? Correct Answer Change in Government policies , Change in Government rules and laws Your Answer Change in Government policies , Change in Government rules and laws , Unpredicted Earthquake, Tsunami waves Multiple Choice Multiple Answer Question What is a 'speculator'? Correct Answer Trader who is neither hedger nor arbitragor , He takes risks for profit Your Answer Trader who is neither hedger nor arbitragor , He takes risks for profit Select The Blank Question The major industrial power whose economy was not affected after the II world war was ________. Correct Answer USA Your Answer
USA
Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue
Your Answer
Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue
Multiple Choice Multiple Answer Question What do you understand by Commercial Risk? Correct Answer Protracted default by the buyer , Insolvency of the buyer Your Answer
Protracted default by the buyer , Insolvency of the buyer
Select The Blank Question Legalised invoice is also called ________ invoice. Correct Answer Visaed Your Answer
Visaed
Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer
Monday
True/False Question
The American Dollar market comprises of the domestic segment of USD the offshore segment of USD. Correct Answer True Your Answer
True
Match The Following Question
Correct Answer
Your Answer
LastStage
Form a single currency
Meet in Maastricht in Netherland
The First stage in the Free movement of capital Establish EURO Bank Europeand and Monetary in EC Union (EMU) Stage II in EMU
Establishment of European Monetary Institute
Establishment of European Monetary Institute
Stage III in EMU
Members to meet the convergence criteria and fix the exchange rates
Members to meet the convergence criteria and fix the exchange rates
Select The Blank
Question
Under the ________ standard the Country's Central Bank promised to buy back the currency at certain rate of Gold. Correct Answer Gold Your Answer
Gold
True/False Question
An Indian exporting goods to New York receives dollars in New York. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question The factors which affect the performance of an option are:Correct Answer Underlying asset price , Time before expiration, rate of interest Your Answer
Underlying asset price , Time before expiration, rate of interest
Multiple Choice Multiple Answer Question Which contracts are used for transportation by road? Correct Answer FCA , CPT Your Answer
FCA , CPT , CFR
True/False Question
Bid rate is bidders buying rate and offered r ate is bidders selling rate. Correct Answer True Your Answer
False
Match The Following Question
Correct Answer
Cancellation of contracts ECD above USD 500000
Your Answer ECD
Forward Purchase contract currency at premium
Presume earliest delivery Presume earliest delivery
Forward purchase contract currency at discount
Presume latest delivery
Presume latest delivery
Exchange margins
FEDAI
FEDAI
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer
Other managed Floating
Multiple Choice Multiple Answer Question Which two countries were included to convert the group of five into the group of seven? Correct Answer Italy , Canada Your Answer
Canada , Italy
Multiple Choice Single Answer Question Who can open an EEFC account? Correct Answer Individuals , firms, companies, resident in India Your Answer
Individuals , firms, companies, resident in India
Multiple Choice Single Answer Question Method of advance payment is not disadvantageous to :Correct Answer The seller Your Answer
The seller
Multiple Choice Single Answer Question What is the immediate cause for the growth of futures and options in the last two decades? Correct Answer Increase in volatile trading conditions Your Answer
Increase in volatile trading conditions
Multiple Choice Single Answer Question What do you mean by a derivative? Correct Answer One which has been derived from other fundamental instruments Your Answer Derived from Mathematical expressions Multiple Choice Single Answer Question "Currency Snake"
Correct Answer Plus or minus movement of exchange rate around the parity rate Your Answer
Currency of European Country in the early 70's
True/False Question
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct Answer False Your Answer
False
Multiple Choice Single Answer Question In which currency can the EEFC account be opened? Correct Answer Any Convertible currency Your Answer
Any Convertible currency
Multiple Choice Multiple Answer Question Criteria for Direct investment abroad under normal route :Correct Answer Viability of the proposal, and excellent track record of business , Experience and expertise of promoters, benefit to the country Your Answer Total Financial commitment in JV/WOS as per prescribed ceiling , Activity for investment is core activity of Indian Co. Select The Blank Question ________ enables bankers to extend purchase, negotiation or discount of export bills. Correct Answer Post shipment credit guarantee Your Answer
Post shipment credit guarantee
Multiple Choice Single Answer Question For setting up a joint venture or WOS abroad, Indian banks operating in India need a clearance :Correct Answer Under Banking Regulation Act Your Answer
Under Banking Regulation Act
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade Your Answer
Companies which have international trade
True/False Question
Indian companies are now allowed to freely invest abroad up to $1.5 million, raised through GDE or EEFC without prior permission from RBI. Correct Answer False Your Answer
False
Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
True/False Question
Terms in an Irrevocable credit can not be alterred at all.
Correct Answer False Your Answer
True
Select The Blank Question Position in a currency is said to be ________, when sales equal purchases. Correct Answer Square Your Answer
Square
Multiple Choice Multiple Answer Question How is the entry into any conuntry's money market or capital market is restricted? Correct Answer Because of different tax systems , Because of different credit standards Your Answer Because of different tax systems , Because of different credit standards Select The Blank Question The currency notes and coins of individual countries participating in "Euro" have ceased to be a legal tender from ________. Correct Answer 2002 Your Answer
2002
Select The Blank Question Partnership firm not eligible for Overseas Direct Investment needs to apply to RBI Approval in form ________.
Correct Answer ODI Your Answer
ODI
Multiple Choice Single Answer Question Where does the word derivative originate from? Correct Answer Mathematics Your Answer
Mathematics
Select The Blank Question To make the export more competitive and remunerative, the Indian Govt extends ________ facility. Correct Answer Cash Incentives Your Answer
Cash Incentives
Multiple Choice Single Answer Question The financial system of any country consists of Correct Answer Network of commercial banks, domestic and foreign investment banks, NBFCs, etc Your Answer The Central bank, IMF and world bank
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Select The Blank Question Association of several scheduled commercial banks for forex business is ________. Correct Answer Foreign Exchange Dealers Association of India Your Answer
Foreign Exchange Dealers Association of India
True/False Question
Installment credit is issued for specific quantities of goods to be shipped every week or month. Correct Answer True Your Answer
True
Select The Blank Question Combined Certificate of Origin and Value are required by ________. Correct Answer Commonwealth Countries Your Answer
Commonwealth Countries
Select The Blank Question The creditworthiness of the futures seller and the futures buyer is ________ because of the presence of the Futures exchange. Correct Answer Irrelevant Your Answer
Irrelevant
Select The Blank Question When interest rate changes by 0.05 per cent then it has changed ________ basis points. Correct Answer 50 Your Answer
5
Multiple Choice Multiple Answer Question What were the primary objectives of the group of seven countries? Correct Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries Your Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries Multiple Choice Multiple Answer
Question
The crisis in global capital market in 2002-04 was due to
Correct Answer Collapse of Enron , Collapse of Argentina's currency board , The war against terrorism Your Answer Collapse of Enron , Collapse of Argentina's currency board Multiple Choice Multiple Answer Question Mr A sells an option conferring the right to buy a kilogram of silver at Rs 8000/- for next six months means :Correct Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, in next 6 months, even if the price goes up, , The buyer of option can sell silver to Mr A at 8000/- per Kg, in next 6 months, even if the price goes down. Your Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, in next 6 months, even if the price goes up, , Mr A has choice of selling or not selling silver on his own Multiple Choice Multiple Answer Question Major investors in NIF are :Correct Answer Commercial Banks , Non banking Finance companies , Insurance Companies Your Answer Commercial Banks , Non banking Finance companies , Insurance Companies True/False Question
With the advent of futures and Options there is no need for additional instruments of risk hedging. Correct Answer False Your Answer
False
Select The Blank Question During the fixed rate exchange system prevailing in India, the intervention currency was ________. Correct Answer Sterling Pound Your Answer
USDollar
Multiple Choice Single Answer Question What help does EXIM Bank provide under the scheme 'Direct Financial assistance to exporters'? Correct Answer Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer Your Answer Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer Multiple Choice Single Answer
Question
What is a bill of lading?
Correct Answer Transport document representing movement of goods by water. Your Answer
Transport document representing movement of goods by water.
Multiple Choice Single Answer Question Which controls are not permitted by IMF? Correct Answer Current account controls Your Answer
Exchange controls
Multiple Choice Multiple Answer Question What are the objectives of International Chamber of Commerce? Correct Answer Champion the global economy as a force of economic growth , Creating of job and prosperity Your Answer Champion the global economy as a force of economic growth , Creating of job and prosperity True/False Question
Yankee bond is issued for domestic borrowers.
Correct Answer False Your Answer
True
Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market True/False Question
An AD can book a forward contract for a part of the amount of Sale Contract Correct Answer True Your Answer
False
True/False Question
Sterling FRNs are issued in Europe, USA ,Asia
Correct Answer False Your Answer
True
Match The Following Question Bond basis to money market basis
Correct Answer
Your Answer
Bond basisx 360/365
Bond basisx 360/365
3 months LIBOR +2 % PA Floating rate
Floating for floating rate currency swap
15% P.A.
Fixed rate
Fixed rate
Money market basis to bond basis
Money market basis x 365/360
Money market basis x 365/360
Select The Blank Question In Indian interbank market forward rates are generally quoted on the basis of ________. Correct Answer Calendar month Your Answer
Calendar month
Multiple Choice Single Answer Question In case of syndication of loans the amount of loan and currency is finalised by :Correct Answer Borrower Your Answer
Underwriter of the syndicate
Multiple Choice Single Answer Question European currency Unit Correct Answer Basket of Currencies of members of EMS Your Answer
Basket of Currencies of members of EMS
Select The Blank Question The counter party in option is ________. Correct Answer The exchange Your Answer
Trustworthy corporation, who hedges the risks of market uncertainty
Multiple Choice Single Answer Question A Spot Transaction between Japanese Yen and Sterling carried out on Friday in Singapore, the settlement day will be
Correct Answer Following Tuesday if it is a working day in all the three centers Your Answer
Following Tuesday if it is a working day in all the three centers
Select The Blank Question EEFC account holder is allowed to have ________ facility. Correct Answer Cheque book and nomination Your Answer
Cheque book and nomination
Multiple Choice Multiple Answer Question A Usance bill of exchange may be drawn in 2 ways. Which are they? Correct Answer Documents against payment , Documents against acceptance Your Answer
Documents against payment , Documents against acceptance
Multiple Choice Single Answer Question Why have futures and options come into existence? Correct Answer To avoid business risk. Your Answer
To avoid business risk.
True/False Question
In an interest rate swap if the payment schedules are identical, only diffrence between the two payments is delivered. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What are the main causes of fluctuations in Exchange rates? Correct Answer Market demand and supply, sentiments , Government regulatios, fiscal policies, political instabilities Your Answer Government regulatios, fiscal policies, political instabilities , Market demand and supply, sentiments , The purchasing power of currency changes every second Multiple Choice Single Answer Question What do you understand by a swap? Correct Answer 2 counter parties agree to exchange streams of payments over a period of time Your Answer 2 counter parties agree to exchange streams of payments over a period of time
True/False Question
Import finance is nomally available at rates of interest cheaper than domestic finance rates. Correct Answer False Your Answer
False
Multiple Choice Single Answer Question A weight list, a packing list used in international trade are which type of documents? Correct Answer Operational Documents Your Answer
Operational Documents
Multiple Choice Multiple Answer Question What do you understand by 'Foreign Exchange Risk'? Correct Answer The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows Your Answer The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer Preshipment credit beyond six months for construction and turnkey projects abroad Multiple Choice Single Answer Question Which Indian Co. is not eligible to make investment abroad under automatic route? Correct Answer Co which is caution listed by RBI Your Answer
Co which is caution listed by RBI
True/False Question
Naked position is when investor does not hedge against market risk. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer
Question
In DAF, the frontier means :-
Correct Answer Frontier of exporter's country , Frontier of importer's country Your Answer
Frontier of exporter's country , Frontier of importer's country
Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer
USD 1 trillion
Match The Following Question
Correct Answer
Your Answer
European option
On or after maturity
On or after maturity
Out of money
Loss
Profit
In the money
Profit
Loss
American option
Before maturity
Before maturity
Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
True/False Question
PP Form is required when exports are made to any country by post parcel on value payable basis. Correct Answer False Your Answer
False
Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Core activity
Multiple Choice Single Answer Question How many Countries participated in the third survey on Foreign Exchange, coordinated by BIS in 1992? Correct Answer 26 Your Answer
26
Select The Blank Question Indian Co. intending to make investment under Automatic route needs to submit form ________ to RBI with enclosures. Correct Answer ODA Your Answer
ODA
Multiple Choice Single Answer Question In International trade, Advance payment means :Correct Answer Providing up front cash Your Answer
Providing up front cash
True/False Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates Select The Blank Question Correct Answer
________ is the agency of ICC which deals with the maritime crime. International Maritime Bureau
Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer
Buffer Stock Facility
Your Answer
Buffer Stock Facility
True/False Question Correct Answer
Cross currency forward contract is not meaningful if original contract is in Rupees to USD True
Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer Your Answer
The exercise or strike price, the amount , The expiration date and time, the method of payment The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option
Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer US Dollar Your Answer Match The Following
US Dollar
Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Factors' values
Weightages %
Factors' values
100% of total
Select The Blank Question Correct Answer Your Answer
Global capital market can be understood from the study of ________. Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer Match The Following Question
Pegged to Single currency
Correct Answer
Your Answer
Maturity of future
Time when actual commodity Last date of exercising option is delivered
Note issuance facility
Euronotes
Euronotes
Bearer security issued in currency other than that of the country of issue
Eurobonds
Eurobonds
Margin on future
Peformance bond or security Peformance bond or security deposit deposit
True/False Question
Postal receipt is an acknowledgement of receipt of goods, a quasi
negotiable instrument. Correct Answer
False
Your Answer
False
True/False Question Correct Answer
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. True
Your Answer
True
Multiple Choice Multiple Answer Question What are margins, with reference to futures market? Correct Answer Your Answer
Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts
Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer Your Answer
By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Which enables the investor to market the same in the secondary market
Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad
Your Answer
Select The Blank Question
Preshipment credit up to six months for construction and turnkey projects abroad
Correct Answer
Over the years ________has been the most widely accepted currency in international capital market. American Dollar
Your Answer
American Dollar
Select The Blank Question Correct Answer
As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily. Economies
Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer US Dollar Your Answer
US Dollar
Select The Blank Question
________ is the acid test for events to be included in country risk.
Correct Answer
Control by Government'
Your Answer
Recurrence
Select The Blank Question Correct Answer
The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Brussels
Your Answer
Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer
Sharing of risk of non payment by supplier
Your Answer
Sharing risk of Non payment by the Syndicate of Banks giving loans
True/False
Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer Your Answer
It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Your Answer
True/False Question
Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them
Correct Answer
Funding Options in domestic yen market are Futures, FRAs, Call and put options. True
Your Answer
True
True/False Question Correct Answer
There is no difference between CIP and CIF contracts except the mode of transportation. True
Your Answer
True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer
Companies which have international trade
Your Answer
Companies which have international trade
Select The Blank Question
When an Indian Company earns at least 50% of its average
Correct Answer
turnover from a particular activity then that activity is considered as ________. Core activity
Your Answer
Primary activity
Select The Blank Question
A Credit can be a confirmed credit only if it is also ________.
Correct Answer
An Irrevocable credit
Your Answer
An Irrevocable credit
True/False Question Correct Answer
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. False
Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer
Preshipment credit , Post shipment credit , Duty Draw back
Your Answer
Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Your Answer
Which are convertible , Which have liquidity confirmed in Euro market operations Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value
Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Your Answer
Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Your Answer
Select The Blank Question
Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue
Correct Answer
Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Euro Commercial Papers
Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer
Buy when you are having short position
Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer? Correct Answer Your Answer
Select The Blank Question
He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies
Correct Answer
Forward margin makes a currency cheaper then the currency is at ________. Discount
Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate?
Correct Answer Your Answer
Unfavourable fluctuations in exchange rate can wipe out the normal business profit Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer Your Answer
Prices of capital market instruments change and are expected to change drastically Prices of capital market instruments change and are expected to change drastically
True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer
False
Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Your Answer True/False Question
Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue
Correct Answer
Out of 15 member countries in European Union 12 countries commiteed themselves for a single currency. False
Your Answer
False
True/False Question Correct Answer
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. False
Your Answer
False
Select The Blank Question Correct Answer
A Credit can be a confirmed credit only if it is also ________. An Irrevocable credit
Your Answer
An Irrevocable credit
Match The Following Question
Correct Answer
Intolerable risk
Drop the investment project Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Banks are ahead
Weightages %
Factors' values
Factors' values
Select The Blank Question
Your Answer
Correct Answer
Over the years ________has been the most widely accepted currency in international capital market. American Dollar
Your Answer
American Dollar
Multiple Choice Single Answer Question What is the meaning of a country risk? Correct Answer Your Answer
Risk of events in a particular country which may cause loss to a person dealing with that country Risk of events in a particular country which may cause loss to a person dealing with that country
Multiple Choice Multiple Answer Question Which common details will be available in any bill of Lading? Correct Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment Your Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment Multiple Choice Single Answer Question What help does EXIM Bank provide under the scheme 'Direct Financial assistance to exporters'? Correct Answer Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer
Your Answer
Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer
Match The Following Question
Correct Answer
Your Answer
PP Form
Export Declaration form
Export Declaration form
Health Certificate
Fumigation certificate
Fumigation certificate
Certificate of Inspection
As per importers requirement
As per importers requirement
Certifiate of Origin
Export Promotion Council
Export Promotion Council
Select The Blank Question
Correct Answer
Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries OECD
Your Answer
OECD
Multiple Choice Single Answer Question How many INCOTERMS are there in "Departure" Group? Correct Answer
One
Your Answer
Two
Multiple Choice Single Answer Question What is a bill of lading? Correct Answer Your Answer
True/False Question
Transport document representing movement of goods by water. Transport document representing movement of goods by water.
Correct Answer
The American Dollar market comprises of the domestic segment of USD the offshore segment of USD. True
Your Answer
True
Select The Blank Question
The creditworthiness of the futures seller and the futures buyer is ________ because of the presence of the Futures
exchange. Correct Answer
Irrelevant
Your Answer
Irrelevant
Multiple Choice Single Answer Question What was the collective assessment of International financial market about the country risk of many cnuntries in the last decade? Correct Answer Whatever it was, was disastrously wrong. Your Answer
Whatever it was, was disastrously wrong.
Multiple Choice Multiple Answer Question How is the entry into any conuntry's money market or capital market is restricted? Correct Answer Because of different tax systems , Because of different credit standards Your Answer Because of different tax systems , Because of different credit standards True/False Question Correct Answer
Till August 1994 India was following the Indirect Methodof Rate quotation. False
Your Answer
True
Select The Blank Question Correct Answer
In Indian interbank market forward rates are generally quoted on the basis of ________. Calendar month
Your Answer
Calendar month
Select The Blank Question Correct Answer
Rupee was liberalised on ________ account in 1993, and on current account in 1994. Trade
Your Answer
Trade
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating
Your Answer
Other managed Floating
Multiple Choice Multiple Answer Question Which of these are considered as miscellaneous documents? Correct Answer Packing list , Weight certificate Your Answer True/False Question
Packing list , Weight certificate
Correct Answer
Funding Options in domestic yen market are Futures, FRAs, Call and put options. True
Your Answer
True
Select The Blank Question Correct Answer
ECGC provides cover to an Indian contractor for construction work abroad under ________. Construction works policy
Your Answer
Construction works policy
Multiple Choice Single Answer Question Equity can be raised internationallly by a company through :Correct Answer Fund raising, underwriting, hedging , arbitration operations Your Answer
Fund raising, underwriting, hedging , arbitration operations
Multiple Choice Single Answer Question How many Countries participated in the third survey on Foreign Exchange, coordinated by BIS in 1992? Correct Answer 26 Your Answer
26
True/False Question
In red clause credit some clauses are printed in Red ink.
Correct Answer
True
Your Answer
True
True/False Question
Prior approval of RBI is needed for payment of all imports.
Correct Answer
False
Your Answer
True
Multiple Choice Multiple Answer Question The factors which affect the performance of an option are:Correct Answer Your Answer
Underlying asset price , Time before expiration, rate of interest Underlying asset price , Time before expiration, rate of interest
Multiple Choice Single Answer Question What is the immediate cause for the growth of futures and options in the last two decades? Correct Answer Increase in volatile trading conditions Your Answer Select The Blank Question
Management of external risk
Correct Answer
For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme. Overseas investment facility
Your Answer
Overseas investment facility
Select The Blank Question Correct Answer
To make the export more competitive and remunerative, the Indian Govt extends ________ facility. Cash Incentives
Your Answer
Advance against cash incentives
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Multiple Choice Multiple Answer Question External Commercial Debt market :Correct Answer
Prevails in Domestic market of foreign country , Prevails in offshore markets
Your Answer
Prevails in Domestic market of foreign country , Prevails in offshore markets
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer
Companies which have international trade
Your Answer
Companies which have international trade
Multiple Choice Multiple Answer Question What do you understand by 'Foreign Exchange Risk'? Correct Answer
Your Answer
The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows , Certainty of an event which would happen in favour of the importer/ exporter
Multiple Choice Single Answer Question For a spot transaction carried out on Tuesday, where both centers have holiday on Wednesday, currencies will be exchanged on :Correct Answer Thursday if it is a working day at both the centers Your Answer
Friday
Multiple Choice Single Answer Question Which details about forward contracts do the Exchange Controls verify ? Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000 Your Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000 True/False Question Correct Answer
In the forward rate quotations between two currencies, when one currency is at discount the other currency is at premium. True
Your Answer
True
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand
Correct Answer Your Answer
Select The Blank Question
Which are convertible , Which have liquidity confirmed in Euro market operations Which are convertible , Which have liquidity confirmed in Euro market operations
Correct Answer
A Bill of exchange payable 45 days from date of shipment, is a means of ________ from seller to the buyer. Credit
Your Answer
Credit
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer Preshipment credit beyond six months for construction and turnkey projects abroad Select The Blank Question Correct Answer Your Answer
True/False Question
Global capital market can be understood from the study of ________. Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Correct Answer
Import finance is nomally available at rates of interest cheaper than domestic finance rates. False
Your Answer
False
Multiple Choice Multiple Answer Question Major s in NIF are :Correct Answer Your Answer Select The Blank Question
Commercial Banks , Non banking Finance companies , Insurance Companies Commercial Banks , Non banking Finance companies
Correct Answer
In mid 1992 ________ rejected the ratification of Maastricht treaty Denmark
Your Answer
Denmark
True/False Question Correct Answer
Indian companies are now allowed to freely invest abroad up to $1.5 million, raised through GDE or EEFC without prior permission from RBI. False
Your Answer
True
Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates Select The Blank Question ________ is the agency of ICC which deals with the maritime crime. Correct Answer International Maritime Bureau Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer
Buffer Stock Facility
Your Answer
Buffer Stock Facility
True/False Question Correct Answer
Cross currency forward contract is not meaningful if original contract is in Rupees to USD True
Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer Your Answer
The exercise or strike price, the amount , The expiration date and time, the method of payment The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option
Multiple Choice Single Answer
Question Correct Answer
Which is the most actively traded currency in the international market today? US Dollar
Your Answer
US Dollar
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not Cost of evluation does not justify analysis justify analysis
Stock market analysis
Banks are ahead
Factors' values
Weightages %
Factors' values
100% of total
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer
Pegged to Single currency
Match The Following Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity is delivered
Last date of exercising option
Note issuance facility
Euronotes
Euronotes
Bearer security issued in Eurobonds currency other than that of the country of issue
Eurobonds
Margin on future
Peformance bond or security deposit
True/False Question
Peformance bond or security deposit
Correct Answer
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. False
Your Answer
False
True/False Question Correct Answer
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. True
Your Answer
True
Multiple Choice Multiple Answer Question What are margins, with reference to futures market? Correct Answer Your Answer
Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts
Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer Your Answer
By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Which enables the investor to market the same in the secondary market
Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion
Your Answer
USD 275 Billion
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer Preshipment credit up to six months for construction and turnkey projects abroad Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily. Correct Answer Economies Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer US Dollar Your Answer
US Dollar
Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer Control by Government' Your Answer
Recurrence
Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
Multiple Choice Single Answer
Question
What is Risk Syndication facility?
Correct Answer
Sharing of risk of non payment by supplier
Your Answer
Sharing risk of Non payment by the Syndicate of Banks giving loans
True/False Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer Your Answer
It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Your Answer
True/False Question
Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them
Correct Answer
Funding Options in domestic yen market are Futures, FRAs, Call and put options. True
Your Answer
True
True/False Question Correct Answer
There is no difference between CIP and CIF contracts except the mode of transportation. True
Your Answer
True
Multiple Choice Single Answer
Question
Financial management is complex process for
Correct Answer
Companies which have international trade
Your Answer
Companies which have international trade
Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Primary activity
Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer
An Irrevocable credit
Your Answer
An Irrevocable credit
True/False Question Correct Answer
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. False
Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer
Preshipment credit , Post shipment credit , Duty Draw back
Your Answer
Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer
Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer
Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value
Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Your Answer
Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Your Answer
Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue
Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer
Buy when you are having short position
Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer? Correct Answer Your Answer
Select The Blank
He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies
Question Correct Answer
Forward margin makes a currency cheaper then the currency is at ________. Discount
Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer Your Answer
Prices of capital market instruments change and are expected to change drastically Prices of capital market instruments change and are expected to change drastically
True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer
False
Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed
Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates Select The Blank Question ________ is the agency of ICC which deals with the maritime crime.
Correct Answer International Maritime Bureau Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your Answer
Buffer Stock Facility
True/False Question
Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of payment Your Answer The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer US Dollar Your Answer
US Dollar
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Factors' values
Weightages %
Factors' values
100% of total
Select The Blank
Question
Global capital market can be understood from the study of ________.
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer
Pegged to Single currency
Match The Following Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity Last date of exercising option is delivered
Note issuance facility
Euronotes
Euronotes
Bearer security issued in currency other than that of the country of issue
Eurobonds
Eurobonds
Margin on future
Peformance bond or security Peformance bond or security deposit deposit
True/False Question
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct Answer False Your Answer
False
True/False Question
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What are margins, with reference to futures market? Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Your Answer Which enables the investor to market the same in the secondary market Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer Preshipment credit up to six months for construction and turnkey projects abroad Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily.
Correct Answer Economies Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer US Dollar Your Answer
US Dollar
Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer Control by Government' Your Answer
Recurrence
Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer Sharing of risk of non payment by supplier Your Answer
Sharing risk of Non payment by the Syndicate of Banks giving loans
True/False Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them True/False Question
Funding Options in domestic yen market are Futures, FRAs, Call and put options. Correct Answer True Your Answer
True
True/False Question
There is no difference between CIP and CIF contracts except the mode of transportation. Correct Answer True Your Answer
True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade Your Answer
Companies which have international trade
Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Primary activity
Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer True/False Question
An Irrevocable credit
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total.
Correct Answer False Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer Preshipment credit , Post shipment credit , Duty Draw back Your Answer
Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer Buy when you are having short position Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer? Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer Prices of capital market instruments change and are expected to change drastically Your Answer Prices of capital market instruments change and are expected to change drastically True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer False
Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates Select The Blank Question ________ is the agency of ICC which deals with the maritime crime. Correct Answer International Maritime Bureau Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your Answer
Buffer Stock Facility
True/False Question
Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option?
Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of payment Your Answer The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer US Dollar Your Answer
US Dollar
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Factors' values
Weightages %
Factors' values
100% of total
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer
Pegged to Single currency
Match The Following
Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity is delivered
Last date of exercising option
Note issuance facility
Euronotes
Euronotes
Bearer security issued in Eurobonds currency other than that of the country of issue
Eurobonds
Margin on future
Peformance bond or security deposit
Peformance bond or security deposit
True/False Question
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct Answer False Your Answer
False
True/False Question
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What are margins, with reference to futures market? Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers
Your Answer
Which enables the investor to market the same in the secondary market
Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer Preshipment credit up to six months for construction and turnkey projects abroad Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily. Correct Answer Economies Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer US Dollar Your Answer
US Dollar
Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer Control by Government' Your Answer
Recurrence
Select The Blank
Question
The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer Sharing of risk of non payment by supplier Your Answer
True/False Question
Sharing risk of Non payment by the Syndicate of Banks giving loans
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them True/False Question
Funding Options in domestic yen market are Futures, FRAs, Call and put options. Correct Answer True Your Answer
True/False
True
Question
There is no difference between CIP and CIF contracts except the mode of transportation. Correct Answer True Your Answer
True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade Your Answer
Companies which have international trade
Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Primary activity
Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer
An Irrevocable credit
True/False Question
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. Correct Answer False Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Your Answer
Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer Buy when you are having short position Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer
Question
What is the effect of cross currency option on the customer?
Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer Prices of capital market instruments change and are expected to change drastically Your Answer Prices of capital market instruments change and are expected to change drastically True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer False Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False
Question
Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer
True
True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer False Your Answer
False
Select The Blank Question The rate of interest on rupee finance for exports is not exceeding ________ less than PLR. Correct Answer 0.025 Your Answer
50 basis points over LIBOR
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of payment Your Answer The exercise or strike price, the amount , The expiration date and time, the method of paym ent Multiple Choice Single Answer Question In the syndicated loan arrangement the borrower has to execute :Correct Answer Single Principal loan agreement Your Answer
Single Principal loan agreement
True/False Question
At Least one principal Lender bank is essential for issue of the ADR or GDR. Correct Answer False Your Answer
True
Multiple Choice Single Answer Question US financial system is the freest system because Correct Answer Institutions can introduce new products and instuments at the price of their choice.
Your Answer
Institutions can introduce new products and instuments at the price of their choice.
Multiple Choice Single Answer Question In a coupon swap who is called the buyer? Correct Answer One who pays the fixed rate of interest Your Answer
One who pays the fixed rate of interest
True/False Question
Till August 1994 India was following the Indirect Methodof Rate quotation. Correct Answer False Your Answer
False
Select The Blank Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme. Correct Answer Overseas investment facility Your Answer
Overseas investment facility
Multiple Choice Single Answer Question Under the automatic route of Direct Investment Abroad, what is the restriction on market purchases? Correct Answer 50% of the net worth of the investing company Your Answer
50% of the net worth of the investing company
Multiple Choice Single Answer Question What are the powers of money changers? Correct Answer Purchase and sell foreign currency notes and travellers cheques Your Answer
Purchase and sell foreign currency notes and travellers cheques and also Give export finance
Select The Blank Question Any company involved in foreign exchange transactions is exposed to ________ risk. Correct Answer Currency Your Answer
Currency
Multiple Choice Multiple Answer
Question
What are the features of Settlement price ?
Correct Answer Price established by the clearing house at the end of each trading session , It is used to determine the net gain, loss, margin call and next days price limits Your Answer Price established by the clearing house at the end of each trading session , It is used to determine the net gain, loss, margin call and next days price limits Multiple Choice Multiple Answer Question What are the activities of ICC? Correct Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime Your Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime , Increased Govt regulation of Business True/False Question
Cause of increase in cost of public issues Underwriting fees , selling commission Correct Answer True Your Answer
False
Select The Blank Question The currency swaps used ________. Correct Answer To lower the risk of currency exposure Your Answer
To lower the risk of currency exposure
True/False Question
The Option period in the forward contract is at the option of the Banker, hence the bank has to be very conservative in quoting rates. Correct Answer False Your Answer
True
Multiple Choice Multiple Answer Question Which factors affect the exchange rates in short time period? Correct Answer Demand and supply, interest rates, inflation, , Sentiment, Speculation Your Answer Demand and supply, interest rates, inflation, , Sentiment, Speculation , GDP,Balance of trade and payment,Unemployment Match The Following
Question
Correct Answer
Your Answer
Departure
EXW
EXW
Main carriage paid
CFR
CFR
Main carriage unpaid
FAS
FAS
Arrival
DES
DES
Multiple Choice Multiple Answer Question Sterling Market is attractive for an international investor because Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Your Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds , Linking of issues to currency swaps True/False Question
In red clause credit some clauses are printed in Red ink.
Correct Answer True Your Answer
False
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the bid rate for USD? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Multiple Answer Question Criteria for investment abroad under automatic route :Correct Answer Activity for investment is core activity of Indian Company. , Total Financial commitment in JV/WOS as per prescribed ceiling Your Answer Activity for investment is core activity of Indian Company. , Total Financial commitment in JV/WOS as per prescribed ceiling Multiple Choice Multiple Answer Question Who can issue the Certificate of Inspection? Correct Answer Export Inspection Council , Person authorised by Importer. Your Answer
Export Inspection Council , Person authorised by Importer.
Multiple Choice Single Answer Question Large number of exporters from which country are enjoying the privilege of receiving up front cash from importers in Russia? Correct Answer United Kingdom Your Answer
United Kingdom
True/False Question
In developed markets, speculators play important role in determining the trend of currency rates. Correct Answer True Your Answer
True
Select The Blank Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________. Correct Answer Shelf Registration Your Answer
Shelf Registration
Select The Blank Question In Overseas market the forward rate is generally quoted on the basis of ________. Correct Answer Fixed date Your Answer
Calendar month
Select The Blank Question Forward Margin makes a currency costlier then the currency is at ________.
Correct Answer Premium Your Answer
Discount
Multiple Choice Multiple Answer Question These are the parties to the documentary credit :Correct Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bank Your Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bank Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Multiple Choice Single Answer Question Fixed, Floating or Limited flexibility are used in the context of Correct Answer Exchange Rates Your Answer
Exchange Rates
Select The Blank Question In mid 1992 ________ rejected the ratification of Maastricht treaty Correct Answer Denmark Your Answer
UK
Multiple Choice Multiple Answer Question Under the liberalisation through FEMA, what can an AD offer to the clients, without the prior permission of RBI or Government? Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Your Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Multiple Choice Single Answer Question To whom is an AD required to report the cancellation of forward contracts? Correct Answer No one at all. Your Answer
To Reserve Bank of India, fortnightly
Select The Blank Question ECGC provides cover to an Indian contractor for construction work abroad under ________. Correct Answer Construction works policy Your Answer
Export Performance Guarantee
True/False Question
The Negotiating bank examines the documents submitted by the seller and makes payment if they comply the terms and conditions of the LC. Correct Answer True Your Answer
True
Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Multiple Answer Question What are the sources of raising funds for exports? Correct Answer Suppliers credit , Forfaiting Your Answer
Suppliers credit , Forfaiting
Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount Your Answer
Discount
Multiple Choice Single Answer Question Name the common forex derivatives :Correct Answer Options, futures Your Answer True/False Question
Options, futures
Country risk analysis is a futile exercise in the background of cost of analysis.
Correct Answer True Your Answer
False
Select The Blank Question Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer
OECD
Match The Following Question Issues linked with LIBOR,LIBID,LIMEAN
Correct Answer
Your Answer
FRNs
FRNs
Issue of bonds without FloatingRate Note fixed rate of interest, linked to short term interest rate in the global market
FloatingRate Note
Issue of loans Syndicated Loans internationally,through arranger, underwriter,co manager, for a large amount for sharing risk of lending
Syndicated Loans
Equity issues in the American or Global foreign markets either as Depository Receipts direct investments or portfolio investments.
American or Global Depository Receipts
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single Answer Question Proforma Invoice, Commercial Invoice, Consaular Invoice are which type of documents? Correct Answer Commercial Documents Your Answer True/False Question
Commercial Documents
Charter party bills of lading are generally not acceptable to bankers as security because Sea Charters are full of problems.
Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question Why does a Transaction exposure arise? Correct Answer Trading flows , Dividend or capital flows Your Answer
Trading flows , Dividend or capital flows
Multiple Choice Single Answer Question If a dealer of securities is quoting rate as 200-250 then the rate 200 signifies which rate with reference to him? Correct Answer Bid rate Your Answer
Bid rate
Select The Blank Question A Documentary credit issued on the strength of another documentary credit is known as ________. Correct Answer Back to Back credit Your Answer
Back to Back credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations True/False Question
Tranche' is a managed issue of securities in smaller denominations. Correct Answer True Your Answer
False
True/False Question
Funding Options in domestic yen market are Futures, FRAs, Call and put options. Correct Answer True Your Answer
True
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Multiple Answer Question Which events can lead to materialisation of country risk? Correct Answer Change in Government policies , Change in Government rules and laws Your Answer Change in Government policies , Change in Government rules and laws , Unpredicted Earthquake, Tsunami waves Multiple Choice Multiple Answer Question What is a 'speculator'? Correct Answer Trader who is neither hedger nor arbitragor , He takes risks for profit Your Answer Trader who is neither hedger nor arbitragor , He takes risks for profit Select The Blank Question The major industrial power whose economy was not affected after the II world war was ________. Correct Answer USA Your Answer
USA
Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Multiple Choice Multiple Answer Question What do you understand by Commercial Risk? Correct Answer Protracted default by the buyer , Insolvency of the buyer Your Answer
Protracted default by the buyer , Insolvency of the buyer
Select The Blank Question Legalised invoice is also called ________ invoice. Correct Answer Visaed
Your Answer
Visaed
Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer
Monday
True/False Question
The American Dollar market comprises of the domestic segment of USD the offshore segment of USD. Correct Answer True Your Answer
True
Match The Following Question
Correct Answer
Your Answer
LastStage
Form a single currency
Meet in Maastricht in Netherland
The First stage in the Free movement of capital Establish EURO Bank Europeand and Monetary in EC Union (EMU) Stage II in EMU
Establishment of European Monetary Institute
Establishment of European Monetary Institute
Stage III in EMU
Members to meet the convergence criteria and fix the exchange rates
Members to meet the convergence criteria and fix the exchange rates
Select The Blank Question Under the ________ standard the Country's Central Bank promised to buy back the currency at certain rate of Gold. Correct Answer Gold Your Answer
Gold
True/False Question
An Indian exporting goods to New York receives dollars in New York. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer
Question
The factors which affect the performance of an option are:-
Correct Answer Underlying asset price , Time before expiration, rate of interest Your Answer
Underlying asset price , Time before expiration, rate of interest
Multiple Choice Multiple Answer Question Which contracts are used for transportation by road? Correct Answer FCA , CPT Your Answer
FCA , CPT , CFR
True/False Question
Bid rate is bidders buying rate and offered rate is bidders selling rate. Correct Answer True Your Answer
False
Match The Following Question
Correct Answer
Cancellation of contracts ECD above USD 500000
Your Answer ECD
Forward Purchase contract currency at premium
Presume earliest delivery Presume earliest delivery
Forward purchase contract currency at discount
Presume latest delivery
Presume latest delivery
Exchange margins
FEDAI
FEDAI
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer
Other managed Floating
Multiple Choice Multiple Answer Question Which two countries were included to convert the group of five into the group of seven? Correct Answer Italy , Canada Your Answer
Canada , Italy
Multiple Choice Single Answer Question Who can open an EEFC account? Correct Answer Individuals , firms, companies, resident in India Your Answer
Individuals , firms, companies, resident in India
Multiple Choice Single Answer Question Method of advance payment is not disadvantageous to :Correct Answer The seller Your Answer
The seller
Multiple Choice Single Answer Question What is the immediate cause for the growth of futures and options in the last two decades? Correct Answer Increase in volatile trading conditions Your Answer
Increase in volatile trading conditions
Multiple Choice Single Answer Question What do you mean by a derivative? Correct Answer One which has been derived from other fundamental instruments Your Answer Derived from Mathematical expressions Multiple Choice Single Answer Question "Currency Snake" Correct Answer Plus or minus movement of exchange rate around the parity rate Your Answer
Currency of European Country in the early 70's
True/False Question
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct Answer False Your Answer
False
Multiple Choice Single Answer Question In which currency can the EEFC account be opened? Correct Answer Any Convertible currency
Your Answer
Any Convertible currency
Multiple Choice Multiple Answer Question Criteria for Direct investment abroad under normal route :Correct Answer Viability of the proposal, and excellent track record of business , Experience and expertise of promoters, benefit to the country Your Answer Total Financial commitment in JV/WOS as per prescribed ceiling , Activity for investment is core activity of Indian Co. Select The Blank Question ________ enables bankers to extend purchase, negotiation or discount of export bills. Correct Answer Post shipment credit guarantee Your Answer
Post shipment credit guarantee
Multiple Choice Single Answer Question For setting up a joint venture or WOS abroad, Indian banks operating in India need a clearance :Correct Answer Under Banking Regulation Act Your Answer
Under Banking Regulation Act
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade Your Answer
Companies which have international trade
True/False Question
Indian companies are now allowed to freely invest abroad up to $1.5 million, raised through GDE or EEFC without prior permission from RBI. Correct Answer False Your Answer
False
Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer True/False
American Dollar
Question
Terms in an Irrevocable credit can not be alterred at all.
Correct Answer False Your Answer
True
Select The Blank Question Position in a currency is said to be ________, when sales equal purchases. Correct Answer Square Your Answer
Square
Multiple Choice Multiple Answer Question How is the entry into any conuntry's money market or capital market is restricted? Correct Answer Because of different tax systems , Because of different credit standards Your Answer Because of different tax systems , Because of different credit standards Select The Blank Question The currency notes and coins of individual countries participating in "Euro" have ceased to be a legal tender from ________. Correct Answer 2002 Your Answer
2002
Select The Blank Question Partnership firm not eligible for Overseas Direct Investment needs to apply to RBI Approval in form ________. Correct Answer ODI Your Answer
ODI
Multiple Choice Single Answer Question Where does the word derivative originate from? Correct Answer Mathematics Your Answer
Mathematics
Select The Blank Question To make the export more competitive and remunerative, the Indian Govt extends ________ facility. Correct Answer Cash Incentives
Your Answer
Cash Incentives
Multiple Choice Single Answer Question The financial system of any country consists of Correct Answer Network of commercial banks, domestic and foreign investment banks, NBFCs, etc Your Answer The Central bank, IMF and world bank
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Select The Blank Question Association of several scheduled commercial banks for forex business is ________. Correct Answer Foreign Exchange Dealers Association of India Your Answer
Foreign Exchange Dealers Association of India
True/False Question
Installment credit is issued for specific quantities of goods to be shipped every week or month. Correct Answer True Your Answer
True
Select The Blank Question Combined Certificate of Origin and Value are required by ________. Correct Answer Commonwealth Countries Your Answer
Commonwealth Countries
Select The Blank Question The creditworthiness of the futures seller and the futures buyer is ________ because of the presence of the Futures exchange. Correct Answer Irrelevant Your Answer
Irrelevant
Select The Blank Question When interest rate changes by 0.05 per cent then it has changed ________ basis points. Correct Answer 50 Your Answer
5
Multiple Choice Multiple Answer Question What were the primary objectives of the group of seven countries? Correct Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries Your Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries Multiple Choice Multiple Answer Question The crisis in global capital market in 2002-04 was due to Correct Answer Collapse of Enron , Collapse of Argentina's currency board , The war against terrorism Your Answer Collapse of Enron , Collapse of Argentina's currency board Multiple Choice Multiple Answer Question Mr A sells an option conferring the right to buy a kilogram of silver at Rs 8000/- for next six months means :Correct Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, in next 6 months, even if the price goes up, , The buyer of option can sell silver to Mr A at 8000/- per Kg, in next 6 months, even if the price goes down. Your Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, in next 6 months, even if the price goes up, , Mr A has choice of selling or not selling silver on his own Multiple Choice Multiple Answer Question Major investors in NIF are :Correct Answer Commercial Banks , Non banking Finance companies , Insurance Companies Your Answer Commercial Banks , Non banking Finance companies , Insurance Companies True/False Question
With the advent of futures and Options there is no need for additional instruments of risk hedging. Correct Answer False Your Answer
False
Select The Blank Question During the fixed rate exchange system prevailing in India, the intervention currency was ________. Correct Answer Sterling Pound Your Answer
USDollar
Multiple Choice Single Answer Question What help does EXIM Bank provide under the scheme 'Direct Financial assistance to exporters'? Correct Answer Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer Your Answer Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer Multiple Choice Single Answer Question What is a bill of lading? Correct Answer Transport document representing movement of goods by water. Your Answer
Transport document representing movement of goods by water.
Multiple Choice Single Answer Question Which controls are not permitted by IMF? Correct Answer Current account controls Your Answer
Exchange controls
Multiple Choice Multiple Answer Question What are the objectives of International Chamber of Commerce? Correct Answer Champion the global economy as a force of economic growth , Creating of job and prosperity Your Answer Champion the global economy as a force of economic growth , Creating of job and prosperity True/False Question
Yankee bond is issued for domestic borrowers.
Correct Answer False Your Answer
True
Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market True/False Question
An AD can book a forward contract for a part of the amount of Sale Contract
Correct Answer True Your Answer
False
True/False Question
Sterling FRNs are issued in Europe, USA ,Asia
Correct Answer False Your Answer
True
Match The Following Question Bond basis to money market basis
Correct Answer
Your Answer
Bond basisx 360/365
Bond basisx 360/365
3 months LIBOR +2 % PA Floating rate
Floating for floating rate currency swap
15% P.A.
Fixed rate
Fixed rate
Money market basis to bond basis
Money market basis x 365/360
Money market basis x 365/360
Select The Blank Question In Indian interbank market forward rates are generally quoted on the basis of ________. Correct Answer Calendar month Your Answer
Calendar month
Multiple Choice Single Answer Question In case of syndication of loans the amount of loan and currency is finalised by :Correct Answer Borrower Your Answer
Underwriter of the syndicate
Multiple Choice Single Answer Question European currency Unit Correct Answer Basket of Currencies of members of EMS Your Answer
Basket of Currencies of members of EMS
Select The Blank Question The counter party in option is ________.
Correct Answer The exchange Your Answer
Trustworthy corporation, who hedges the risks of market uncertainty
Multiple Choice Single Answer Question A Spot Transaction between Japanese Yen and Sterling carried out on Friday in Singapore, the settlement day will be Correct Answer Following Tuesday if it is a working day in all the three centers Your Answer
Following Tuesday if it is a working day in all the three centers
Select The Blank Question EEFC account holder is allowed to have ________ facility. Correct Answer Cheque book and nomination Your Answer
Cheque book and nomination
Multiple Choice Multiple Answer Question A Usance bill of exchange may be drawn in 2 ways. Which are they? Correct Answer Documents against payment , Documents against acceptance Your Answer
Documents against payment , Documents against acceptance
Multiple Choice Single Answer Question Why have futures and options come into existence? Correct Answer To avoid business risk. Your Answer
To avoid business risk.
True/False Question
In an interest rate swap if the payment schedules are identical, only diffrence between the two payments is delivered. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What are the main causes of fluctuations in Exchange rates? Correct Answer Market demand and supply, sentiments , Government regulatios, fiscal policies, political instabilities Your Answer Government regulatios, fiscal policies, political instabilities , Market demand and supply, sentiments , The purchasing power of currency changes every second
Multiple Choice Single Answer Question What do you understand by a swap? Correct Answer 2 counter parties agree to exchange streams of payments over a period of time Your Answer 2 counter parties agree to exchange streams of payments over a period of time True/False Question
Import finance is nomally available at rates of interest cheaper than domestic finance rates. Correct Answer False Your Answer
False
Multiple Choice Single Answer Question A weight list, a packing list used in international trade are which type of documents? Correct Answer Operational Documents Your Answer
Operational Documents
Multiple Choice Multiple Answer Question What do you understand by 'Foreign Exchange Risk'? Correct Answer The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows Your Answer The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer Preshipment credit beyond six months for construction and turnkey projects abroad Multiple Choice Single Answer Question Which Indian Co. is not eligible to make investment abroad under automatic route? Correct Answer Co which is caution listed by RBI Your Answer True/False
Co which is caution listed by RBI
Question
Naked position is when investor does not hedge against market risk. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question In DAF, the frontier means :Correct Answer Frontier of exporter's country , Frontier of importer's country Your Answer
Frontier of exporter's country , Frontier of importer's country
Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer
USD 1 trillion
Match The Following Question
Correct Answer
Your Answer
European option
On or after maturity
On or after maturity
Out of money
Loss
Profit
In the money
Profit
Loss
American option
Before maturity
Before maturity
Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
True/False Question
PP Form is required when exports are made to any country by post parcel on value payable basis. Correct Answer False Your Answer
False
Select The Blank
Question
When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Core activity
Multiple Choice Single Answer Question How many Countries participated in the third survey on Foreign Exchange, coordinated by BIS in 1992? Correct Answer 26 Your Answer
26
Select The Blank Question Indian Co. intending to make investment under Automatic route needs to submit form ________ to RBI with enclosures. Correct Answer ODA Your Answer
ODA
Multiple Choice Single Answer Question In International trade, Advance payment means :Correct Answer Providing up front cash Your Answer
Providing up front cash
True/False Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True Your Answer
True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question Which functions does the Bill of Lading serve? Correct Answer It is a document of title to goods. , It is receipt of goods Your Answer It is a document of title to goods. , It is receipt of goods Multiple Choice Single Answer Question A Bank quotes interest rate of 9.50/10.00 for six months dollar deposit, here the bid rate is :Correct Answer 9.50% P.A.
Your Answer 9.50% P.A. Multiple Choice Single Answer Question What is Sovereign Risk? Correct Answer Risk of lending to the government of a country Your Answer Risk of lending to the government of a country Multiple Choice Single Answer Question How does ICC help poor countries? Correct Answer Attract Foreign Direct investments togeather with UNCTAD Your Answer Attract Foreign Direct investments togeather with UNCTAD Multiple Choice Multiple Answer Question As per BIS, recovery from the recent crisis in global capital market was mainly due to Correct Answer Rapid and appropriate policy response in US and other countries , Increase in Foreign Direct Investments , free flow of credit Your Answer Rapid and appropriate policy response in US and other countries , Increase in Foreign Direct Investments , free flow of credit True/False Question Out of 15 member countries in European Union 12 countries commiteed themselves for a single currency. Correct Answer False Your Answer True True/False Question In red clause credit some clauses are printed in Red ink. Correct Answer True Your Answer True True/False Question Transfer of funds for investment abroad is allowed freely. Correct Answer True Your Answer False Select The Blank Question EEFC account holder is allowed to have ________ facility. Correct Answer Cheque book and nomination Your Answer Credit card, safe custody, safe deposit locker without any fee Select The Blank Question Fixed interest rate Eurobond without the option to convert to equity is known as ________. Correct Answer Straight Debt
Your Answer Interest rate swap True/False Question An Indian importing goods from USA pays dollars in India. Correct Answer False Your Answer True Match The Following Question Correct Answer Your Answer PP Form Export Declaration form Export Declaration form Health Certificate Fumigation certificate Export Declaration form Certificate of Inspection As per importers requirement Export Declaration form Certifiate of Origin Export Promotion Council Export Declaration form Multiple Choice Multiple Answer Question For issuing a Documentary credit The applicant is required to provide to the issuing bank details about Correct Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents Your Answer The purchase-sales contract, the mode of payment, the tenor of payment , The track record of the buyer and seller Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given on behalf of a certain person to another person in different country , It is a stamped agreement and is not valid unless it is signed by the issuer True/False Question CFR = FOB plus freight paid by seller + insurance paid by seller. Correct Answer False Your Answer True Select The Blank Question Even after liberalisation of exchange
controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer OPEC True/False Question Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer True Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your Answer Supplemental Reserve Policy Multiple Choice Multiple Answer Question What are the sources of raising funds for exports? Correct Answer Suppliers credit , Forfaiting Your Answer Suppliers credit , Forfaiting , Buyers credit , Foreign currency or Rupee finance True/False Question Normally the forward contracts are booked for making huge profits. Correct Answer False Your Answer False True/False Question Head office of ICC is in Paris because of its First President Eliance Clementel. Correct Answer True Your Answer False Select The Blank Question A ________ Bill of lading does not specify the terms and conditions of carriage. Correct Answer Short Form Your Answer Short Form Multiple Choice Single Answer Question What is the volume of the world's total speculative transactions? Correct Answer Roughly 90 % of the total turnover Your Answer 70% of the total turnover True/False Question Till August 1994 India was following the Indirect Methodof Rate quotation. Correct Answer False Your Answer False
Select The Blank Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme. Correct Answer Overseas investment facility Your Answer Overseas investment facility Multiple Choice Single Answer Question Mr P has exported goods in May 2005 and is expecting payment of Euro 25000 by the last week of Sept 2005. Give details of the forward contract he can book :Correct Answer He can book a sale contract any time from May 2005 till Mid Sept 2005, for Euro 25000 or less, for maturity last week of Sept. Your Answer He can book a contract for Forward Purchase, any time from May 2005 till Mid Sept 2005, for Euro 25000 or less, for maturity last week of Sept. Select The Blank Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________. Correct Answer Shelf Registration Your Answer Shell Registration Multiple Choice Multiple Answer Question Which common details will be available in any bill of Lading? Correct Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment Your Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment , The name of the vessel , The date of transportation and contract of transportation Select The Blank Question Under the ________ standard the Country's Central Bank promised to buy back the currency at certain rate of Gold. Correct Answer Gold Your Answer Interest Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer ADRs Select The Blank Question The type of trade where a country sells orange juice in return for cars is known as ________. Correct Answer Counter Trade Your Answer Non money trade
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment to EOUs in India for services rendered by them , Payment of Gifts of GBP 5000 per year per donor Multiple Choice Multiple Answer Question Under the liberalisation through FEMA, what can an AD offer to the clients, without the prior permission of RBI or Government? Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Your Answer Caps and collars, and forward rate agreements , Good and competitive exchange rates and cross currency rates Multiple Choice Multiple Answer Question Sterling Market is attractive for an international investor because Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Your Answer Choice of issuing medium term and long term bonds , Less controls and less formalities to be completed , Linking of issues to currency swaps Multiple Choice Single Answer Question Under which contracts the seller pays the import duty for the buyer? Correct Answer DDP Your Answer DDP True/False Question PP Form is required when exports are made to any country by post parcel on value payable basis. Correct Answer False Your Answer True Multiple Choice Multiple Answer Question What were the immediate causes of converting the group of 5 into group of 7 and convene their meeting in late 1985? Correct Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased Your Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased , The heads of G5 insisted to have a meeting , Failure of IMF to control
the exchange rates Multiple Choice Single Answer Question What are the powers of money changers? Correct Answer Purchase and sell foreign currency notes and travellers cheques Your Answer Purchase and sell foreign currency notes and travellers cheques, give import and export finance Multiple Choice Single Answer Question Who can open an EEFC account? Correct Answer Individuals , firms, companies, resident in India Your Answer Individuals , firms, companies, resident in India Multiple Choice Single Answer Question What is the role of ICC towards WTO? Correct Answer To provide world business recommendations to WTO Your Answer To further the cause of WTO Match The Following Question Correct Answer Your Answer Swap price Difference in prices of two legs of buying and selling Quoting rate for both buying and selling a currency Euro Market Market in Euro currencies Market in Euro currencies Making market Quoting rate for both buying and selling a currency Difference in prices of two legs of buying and selling Spread Price difference between bid and offer Maket of 'Euro' Select The Blank Question Position in a currency is said to be ________, when sales equal purchases. Correct Answer Square Your Answer Awkward Select The Blank Question Hotels and Airline companies are allowed to receive payments in Indian rupees from foreign tourist without insisiting on ________. Correct Answer Encashment certificate Your Answer Encashment certificate Multiple Choice Multiple Answer Question Why is Bill of Exchange a Quasi
Negotiable Instrument? Correct Answer It represents title to goods , It is issued under Sale of Goods act Your Answer It represents title to goods , It is issued under Transportation act , It is issued under Bill of exchange act Multiple Choice Single Answer Question Which details about forward contracts do the Exchange Controls verify ? Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000 Your Answer Details of all contracts booked and cancelled beyond a specified limit Multiple Choice Single Answer Question In the context of International economy ,the period between 1920s and 1930s is known as Correct Answer Great Depression Your Answer Great Depression Multiple Choice Multiple Answer Question What do you understand by Commercial Risk? Correct Answer Protracted default by the buyer , Insolvency of the buyer Your Answer Protracted default by the buyer , Insolvency of the buyer
Chapter – 1 – Introduction to international capital markets Euro currency ; domestic markets ; US Japan ; Switzerland ; UK ; Australia ; Canada ; European ; centers in ECU; Chapter – 2 – International Finance Markets - the U.S. dollar Market ; The U.S. Dollar Market ; The Japanese Yen Market ; The Sterling Market ; The Euro Market Has Been discussed in the next chapter ; Recent development in international Finance Markets ; Chapter – 3 – International Monetary and Financial System The country’s central ban agreed to buy back their currency at a certain rate of gold; Melting down of gold was freely allowed ; There was unrestricted movement of gold (i.e. import and / or export) The total money supply in the country was determined by the quantum of gold reserves in the country The international monetary fund ; quotas ; funding facilities ; regular facilities tranche policies ; restore Tranche credit Tranche ; extended arrangement (extended fund facility (EEF) ; Standard Arrangement (enlarged Arrears Policy) Special facilities (compensatory and contingency financing facility (CCFF) Buffer stock Financing Facility ; Supplemental Reserve Policy (SRP); Reserve Tranche ; Credit Tranche ; Stand by arrangement ;
1 5 – 10
13 – 14
15 – 17
Extended arrangement or extended fund facilities (EFF) special facilities ; CCFF ; Buffer stock financing Facility (BSFF) ; Supplemental resources facility (SRF) Enhanced structural adjustment facility (ESAF) The fixed exchange rate system Problems faced by the fixed exchange rate system ; failure of fixed rate system ; the European monetary system (EMS) ; Economic and monetary union ; Recent developments ; post – Maastricht developments; emergence of EURO The group of seven ; special drawing rights (SDRS) ; The liquidity problems (SDRS) ; the world bank group ; the world bank; international development agency (IDA) ; international finance corporation (IFC) ; The multinational investment Guarantee Agency (MIGA) Chapter – 4 – External commercial borrowing – country ; company ; Equity ; Fund raising ; underwriting ; hedging ; arbitraging ; note issuance facility ; Mechanism and documentation ; syndicated loans ; floating rate notes ; Flip – Flop FRN ; MIS – Mich FRN ; MINI Max FRN ; Capped FRNs, Perpetual FRNs; VRN structured FRNs; Terms and conditions of FRN Ero Commercial paper (ECP) ; ADRs and GDRs; GDR – Global depositary Receipts ; The roles of different parties involved in launching of GDR GDR – Global Depositary Receipts ; The roles of different parties involved in launching of GDR steps involved in issuance of GDR are as follows Pricing and Closing ; costs ; Advantages & Disadvantages of external commercial borrowing Chapter – 5 – Documents used in International Trade ; Regulatory requirements ; operational requirements ; commercial documents ; financial documents transport documents ; risk covering documents ; official / regulatory documents ; miscellaneous documents ; Commercial documents ; proforma invoice ; commercial invoice ; consular invoice customs invoice ; legalized invoice ; combined certificate of origin and value ; financial documents ; bill of exchange ; The second of the same tenor and date unpaid ; the first of the same tenor and date unpaid ; or similar words ; sight B/E; Tenor ; time B/E; DP Basis ; document against Payment Basis ; Documents against Acceptance Basis Transport documents; bill of lading ; received for shipment bill of lading ; on board bill of lading ; Short form bill of lading ; long form bill of lading clean bill of lading ; claused bill of lading ; through bill of lading ; straight bill of lading ; charter party Bill of lading ; container bill of lading container bill of lading ; combined transport B/L or Mulit Modal B/L lash bill of lading house bill of lading ; Airway bill ; Air consignment Note ; House Air way bill ; Postal Receipt ; Courier /Expected delivery service ; multimodal transport document ; risk covering documents ; insurance policy ; Insurance cover note ; official documents export declaration forms ; export certificate; Certificate of origin ; Miscellaneous documents ; packing list ; weight certificate ; certificate of analysis and quality ; certificate of inspection ; health certificate ; phytosanitary / Radiation / Fumigation Chapter 6 – Methods of payment ; advance payment ; bill for collection ; open account ; barter trade ; bank guarantee ; letter of credit (L / C) Seller wants buyer wants ; parties to a documentary credit ; applicant issuing bank advising ; confirming bank beneficiary ; negotiating bank ; reimbursing bank Types of letters of credit ; revocal letter of credit ; irrevocable letter of credit ; confimed irrevocable letter of credit ; transferable l / c revolving letter of credit ; credit available by installments; back to back letter of credit ; anticipatory credit or red clause letter of credit ;
18 – 19 20 – 23 24 – 27 31 – 35 36 – 39
40 – 41 43 – 46
47 – 49
50 – 53
55 – 57
61 – 66
67 – 69
green clause letter of credit ; deferred payment letter of credit ; standby letter of credit ; flow chart of export transaction under letter of credit Flow chart of export transaction under letter of credit ; various steps in the transaction are as under ; steps no. description Chapter 7 – Export / Import Finance ; - Part I import finance ; import financing through trust receipts / import loans ; import financing through issuing l/ c or bank guarantee ; part II – Export Finance Timely ; adequate ; cheaper on liberal terms ; sources for raising finance ; own funds ; 2 friends and relative ; 3 advance payment from buyer ; 4 Trade credit from suppliers 5 banks and financial institutions ; pre-shipment credit (P.C) Post shipment credit ; advance agains t cash incentives / duty draw back ; forfeiting ; rediscounting of export bills abroad ; buyer’s credit ; supplier’s credit Chapter – 8 – Procedure in connection with foreign investment in India – Seciton – I foreign direct investment ; FERA ; the practice at which a company can issue shares to non residents ; fema ; esop ; section II – Foreign technical collaboration ; General Hotel & Tourism Related Industries ; procedure for granting approval; I / We hereby certify that ; Documentation ; Standard conditions attached to approval for technology agreement ; no objection ; the agreement shall be subject to Indian laws: Section – III – Portfolio investment ; explanation ; the regulations regarding portfolio investments by NRIs / PIOs are as under ; NRI / PIOs ; Section – IV – Other investments ; Section V – procedure for opening branch / project / Liaison office ; Chapter – 9 – Direct investment outside India – overseas investment division TDR ADR GDR the criteria for investment under the automatic route are as under ; JV/WOS; ODA; The schemes for overseas investment by partnership firms ; criteria for overseas investment by a registered partnership firm under the automatic route ; The procedure to be followed by a partnership firm for making investment under the automatic route ; the procedure to be followed by partnership firms which are not eligible under the automatic route ; restrictions for setting up of a second generation company ; resident individual India can acquire foreign securities without prior approval in the following cases ; provided that ; WOS Chapter – 10 – Taxation ; Bilateral relief Unilateral relief ; for the purpose of this provision Part – 2 Forex risk management and hedging techniques Chapter – 1 Foreign exchange markets – The international Market ; survey were ; the market ; the participants ; information and communication system ; the payment system ; the foreign exchange market in India Chapter – 2 – Exchange Rates – Exchange rage quotes ; direct and indirect rates ; direct rates ; indirect rates; spot and forward rates value rate; ready or cash ; value today ; TOM; spot ; forwards; glossary of market terms; Foreign exchange risks ; transactions exposure ; translation exposure ; economic exposure; Translation – moving towards a consensus ; economic exposure ; an overview ; scenario exchange rages in India ; Inward remittances export encashment of foreign currency travelers cheques ; encashment of foreign currency notes; outward remittances ; imports ; issuing foreign currency travelers cheques issuing foreign currency notes ; Type of transaction exchange rate nomenclature ; Factors affecting movement of exchange rates ; summary
70 – 71 73 – 74
75 -76 79 – 83 84 – 88 89 - 92 95 – 99
100 – 102
105 – 106 109 – 114 117 – 123
124 – 127
128 – 129
Chapter – 3 – Forward contracts - Forward cover for merchants – forward purchase cover forward sales contract - repayment of foreign currency loans – period of delivery – cross currency booking (sale / Purchase ) ; utilization of the forward cover ; cancellation ; calculation of exchange rates for forward contracts Cancellation ; early delivery and rollover of forward contracts ; forward sale contracts ; forward purchase contract ; early delivery ; rollover charges Chapter 4 – Options and Futures – History and development ; recent trends ; key features of options and futures ; premium ; maturity or expiration date ; exercise ; in the money ; at the money ; out of the money American option European option ; underlying asset price time before expiration ; underlying asset price ; time before expiration the rate of interest volatility Pricing and analysis ; pricing of options ; underlying asset price ; exercise price ; options and futures products today ; interest rate options ; foreign exchange options and futures ; equity linked options ; commodity linked futures and options Chapter – 5 - Swaps What are swaps ; interest rate swaps ; lowering financial cost ; hedge exposure to interest rate risk ; restructuring the debt in the balance sheet ; amortizing and accreting swaps ; forward swaps ; Reversible swaps ; basis swaps Currency swaps ; lowering funding cost ; entering restricted capital markets ; reducing currency risk ; supply demand imbalances in the markets ; amortizing currency swaps ; accreting currency swaps ; floating – for floating rate currency swaps ; interest payments ; asset swaps PART 3 – AGENCIES INVOLVED IN INTERNATIONAL TRADE Chapter – 1 – Export import Bank of India ; Functions of Exim Bank ; the exim bank performs the following functions ; incidental functions ; operations programmes ; direct financial assistance to exporters ; consultancy and technology services ; pre-shipment credit ; facilities for export – oriented units ; overseas investment facility buyer credit facilities for deemed exports small scale industry export bills rediscounting; the latest new schemes in operation since 1992 are the following Chapter – 2 – Reserve Bank of India Exchange controls in India – RBI as the exchange control authority ; Authorized dealers (Ads) ; Money changers ; other receipts ; payment for imports ; other payments ; delegation to Ads; securities ; foreign currency accounts; liberalization of exchange control Sodhani Committee Recommendations ; Exchange rate management ; Chapter – 3 – Foreign Exchange dealers association of India ; Uniform customs and practice for collection ; Chapter 4 – International chamber of commerce – ICC – WCF – IBCC – WCF Chapter – 5 – Export credit guarantee corporation of India ; ECGC; need for export credit insurance ; credit insurance policies ; scr or standard policy ; turnover policy ; small exporter policy ; specific shipment policy (short term); buyer wise policy ; specific policy for supply contract insurance cover for buyer’s credit and line of credit Services Policy ; construction works policy ; maturity factoring ; Guarantees to banks ; packing credit guarantee ; export production finance guarantee ; post – shipment credit guarantee ; export finance guarantee ; export performance guarantee; export finance (overseas lending ) Guarantee Part – 4 – Miscellaneous Chapter 1 – Exchange Earner’s foreign currency (EEFC)
131 – 137
138 – 141 143- 147
148 – 152 155 – 157
158 – 161
163 – 166
169 – 173
174 – 177 179 – 180 183 – 183 189 – 190
191
195
Status holder exporter ; individual professional ; others; permissible credits ; permissible debits ; Chapter 2 – Country Risk ; Quantifying country risk ; A comprehensive example ; use of country risk ; assessment ; Chapter 3 – International capital Budgeting - The Basic Frame work Chapter 4 – Incoterms – Group E departure EXW ; Group F Main carriage unpaid ; FAS ; FOB ; CFR ; CIF ; CPT ; CIP ; Group C; Group D ; Arrival DAF ; DES ; DEQ; DDU CTD / MTO ; DDP ; delivered duty paid (CTD / MTO) Chapter – 5 – Actuals ; arbitrage ; bankers’ acceptance bond (BAS) ; Bearer Bond ; Bid rate ; Bond ; Bull; call option ; caps ; cash commodity ; cash market ; cedel ; certificate of deposit (CD) class of option ; closing price ; commission ; commercial paper (CP) ; contract specifications ; convertible bond ; coupon ; cover; delivery ; delivery month ; equity ; equity swaps ; equity collar ; Eurobond ; Euro clear ; euro commercial paper; euro –currency ; Exercise price ; expiration date; floating rate note ; fundamental Analysis ; futures contract hedge ; Hybrid ; Interest Rate swap; Intermediation ; Intrinsic Value ; Libor ; Long margin ; margin call maturity naked position ; note issuance facility (NIF) Option ; overbought ; oversold ; physical market ; position ; premium purchaser ; put option ; settlement price short ; speculator ; strike price ; straight debt tap ; technical analysis tranche ; tombstone volatility ; volume ; withholding tax ; yankee bond ;
Chapter – 1 – Introduction to international capital markets
1
Ero currency market ; Domestic market ; US, Japan Switzerland ; uk, australia canada ; european conters in ECU ; Euro ; Asian doller market ; forex marker SDR ; ECU ; US dollar ; German ; Swiss ; Japanees ; France ; Canada ; Australia; Chaper - 2 - International financial Markets - The U.S.Dollar Market ; pricing ; federal reservice board; curency ; central bank of US ; The Japanese Yen Market ; Mof; Long Term Prime Rate ; 1970 japanese The Sterling Market ; 20th 19th century 1979 ; OECD Organization for economic co-operation & development EMS Exchange rate Mechanism; FRN ; Bulldog; the EURO Market has been discussed in the nex chapter Recent development in international financial markets ; septer 11 enron LtCN (Long term capital Management Brazil china and mexico; 1990 ; 1980 ; severe tests financial system; securitization forces banks ; attractive to browwerw; legal issues flexibility ; financial market development segement of ; swaps cash flow ; roject related; gain access to international ; marketability ; new financing techniques;
10
Chapter – 3 – International Monetary and Financial System
13
1945 ; 1944 ; intenrational world Bank for reconstruciton and development; second world war was european ; IMF International Monetary Fund; Gold standard first world war The country's Central Bank agreed to buy back their currency at a certain rate of gold; melting down of gold was freely allowed There was unrestricted movement of gold (I.e. import and / export The total money supply in the country was determined by the quantum of gold reserves in the country 1870 ; 1914 ; 1821 ; 1834 ; 1870 ; European countries gold standard in 1933 ; 1930 International Monetary Co-operation ; IBRD ; IMF ;
1 2 5 6 7 7 8 9
13 13 13 14 14 14
199 203 – 204 207- 212 215 – 217
218 -219 220 – 221
popularly known as world bank IMF ; the international monetary fund 1945 ; 1971 ; 25 years ; aims SDR ((special drawing rights ) 25% 1960 ; 1963 ; Gross domestic product; 5 years ; SDR 146 bn to SDR 212 ; 45% ; 1998 ; Two parts Funding Facilities ; Regular Facilities ; Special facilities ; restore tranche credit tranche ; compensatory and contingency financing facility (CCFF) ; Extended arrangement (Extended Fund Facility EEF) ; Buffer stock Financing Facility ; Standard Arrangement (Enlarged Arrears Policy ) ; Supplemental Reserve Policy (Supplemental Reserve Policy (SRP Reserve Tranche ; Credit Tranches ; Stand - By Arrangement Extended arrangement or extended fund facilities (EFF) Special Facilities ; CCFF ; Buffer Stock Financing Facility ; BSFF ; Supplemental Resource Facility (SRF) ; 1997 Enhance Structural Adjustment Facility (ESAF) ; The fixed exchange rate system US dollars 35 ounce of gold Problem faced by the fixed exchange rate system ; 1960 ; value apprehension ; delay in adjustment failure of fixed rate system ; the european monetary system (EMS) European Community Currency Snake ; 1973 ; EMS EC ECU European Currency Unit ; SDR ; ERM ; DM ; matrix german bundesbank EM ; PST ; ERM ; Economic and monetary Union ;
15 16 16 16 17 17 18 18 19 20 20 21
FEDAI does not require RBI perm business
True False
Corporates are allowed to raise funds abroad up to $ 15 million as short term finance if they have EPCG lice
True False Who books an option forward contract?
Party who is not definite about crystallisation of delivery date Party who is speculator Party who wants to make more profit Party who wants to accommodate the other party
b) c) d) IMF
India is a founder member of Which causes may force a country to restrict imports or restrict transfer of payments?
.
a)
Economic difficulties
b)
Balance of payment problems such as non availability of c) exchange reserves
d)
Strike by banks employees Non availability of appropriate transfer technology with banks
Buyer's Credit 2. Seller's
4
1
1. Available to seller abroad 2. Export Finance
Credit 3. Usance LC
6
3. Discounting export receivables
4. Forfaiting
3
4. Available to Buyer abroad 5. Seller paid only on maturity date 6. Import finance
International Finance_6
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single Answer Question What do you mean by a derivative? Correct Answer One which has been derived from other fundamental instruments Your Answer One which has been derived from other fundamental instruments Multiple Choice Multiple Answer Question With reference to ECB, fund raising activity includes :Correct Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of shares Your Answer Syndicate loans, issue of shares , Floating rate notes, bonds, debentures Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer USD 1=Rs 50.5000 Match The Following Question Correct Answer Your Answer Merchant banking Portfolio management Note issuing and underwrting facility Securitization Issue of debt in the form of tradeable security Issue of debt in the form of tradeable security Prime borrower Highest credit rating Venture capital Traditional banking service Loans and cash credit against security Highest credit rating Select The Blank Question A Bill of exchange payable 45 days from date of shipment, is a means of ________ from seller to the buyer. Correct Answer Credit Your Answer Intimation of shipment Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer An Irrevocable credit Multiple Choice Single Answer Question Who introduced the worlds first exchange traded currency futures? Correct Answer Chicago Mercantile Exchange Your Answer Bretton woods Agreement Multiple Choice Single Answer Question Name the members of Exchange Banks association :Correct Answer Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar, Your Answer All banks at any business center True/False Question In developed markets, speculators play important role in determining the trend of currency rates. Correct Answer True Your Answer True
-1-
International Finance_6
Multiple Choice Multiple Answer Question What are the objectives of International Chamber of Commerce? Correct Answer Champion the global economy as a force of economic growth , Creating of job and prosperity Your Answer Champion the global economy as a force of economic growth , Creating of job and prosperity Multiple Choice Single Answer Question Under which contracts the seller pays the import duty for the buyer? Correct Answer DDP Your Answer DDU Multiple Choice Multiple Answer Question In which cases can a Resident Individual in India acquire foreign securities without prior approval? Correct Answer Gift from a person outside India, or Inheritance from a person resident in or outside India , Security issued under Cashless employees stock option scheme Your Answer Gift from a person outside India, or Inheritance from a person resident in or outside India , Security issued under Cashless employees stock option scheme Multiple Choice Single Answer Question The document formulated by the borrower of syndicated loan, and the arranger, which contains details of individual shares etc of co-lenders is known as :Correct Answer Memorandum of information Your Answer Memorandum of information Multiple Choice Multiple Answer Question Why does a Transaction exposure arise? Correct Answer Trading flows , Dividend or capital flows Your Answer Trading flows , Dividend or capital flows Match The Following Question Correct Answer Your Answer LastStage Form a single currency Form a single currency The First stage in the Europeand and Monetary Union (EMU) Free movement of capital in EC Free movement of capital in EC Stage II in EMU Establishment of European Monetary Institute Establishment of European Monetary Institute Stage III in EMU Members to meet the convergence criteria and fix the exchange rates Members to meet the convergence criteria and fix the exchange rates Multiple Choice Single Answer Question Value date means the date on which :Correct Answer Delivery of both the currencies will be made Your Answer Delivery of both the currencies will be made True/False Question Till August 1994 India was following the Indirect Methodof Rate quotation. Correct Answer False Your Answer True
-2-
International Finance_6
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Single Answer Question A Specific date forward contract can be booked so as to be :Correct Answer Payable on a specific date of the calendar month Your Answer Payable on a specific date of the calendar month True/False Question ECGC offers isurance protection to Indian exporters againt payment risks. Correct Answer True Your Answer True Multiple Choice Single Answer Question What is a bill of lading? Correct Answer Transport document representing movement of goods by water. Your Answer Transport document representing movement of goods by water. Multiple Choice Multiple Answer Question Which document is used for transportation by air, rail, road, marine? Correct Answer Multimodal transport document , Combined Transport document Your Answer Multimodal transport document , Combined Transport document True/False Question Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct Answer False Your Answer False Select The Blank Question After the second world war many countries adopted the route of ________ to give facelift to sagging economies. Correct Answer Devaluation of their currencies Your Answer Devaluation of their currencies Multiple Choice Multiple Answer Question What do you understand by Commercial Risk? Correct Answer Protracted default by the buyer , Insolvency of the buyer Your Answer Insolvency of the buyer , Risk of strikes due to which commercial activity is haulted Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment of Gifts of GBP 5000 per year per donor Multiple Choice Single Answer Question A Spot Transaction between Japanese Yen and Sterling carried out on Friday in Singapore, the settlement day will be Correct Answer Following Tuesday if it is a working day in all the three centers Your Answer Following Tuesday if it is a working day in all the three centers
-3-
International Finance_6
Multiple Choice Multiple Answer Question Name the services provided by 'Reuter 3000' in forex market:Correct Answer Quotation of forex rates, interest rates , Electronic broking by matching the rates Your Answer Quotation of forex rates, interest rates , Calculate and quote rates for transactions Multiple Choice Single Answer Question What do you understand by a forex option? Correct Answer Right and not the obligation to take or give future delivery of an agreed quantity at certain price Your Answer Right and not the obligation to take or give future delivery of an agreed quantity at certain price True/False Question Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer True Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade Your Answer Companies which have international trade Select The Blank Question The ________is a Floating rate index for swaps. Correct Answer US Commercial paper rate Your Answer US Commercial paper rate True/False Question Services of a Paying bank are taken when currencies of exporters country or the importers country is not involved in the transaction. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question Which two countries were included to convert the group of five into the group of seven? Correct Answer Canada , Italy Your Answer Canada , Italy Multiple Choice Multiple Answer Question Which factors influence the valuation of cash flows? Correct Answer Incomplete capital market , Availability of projkect specific concessional finance, Your Answer Availability of projkect specific concessional finance, , volatility of exchange rates True/False Question PP Form is required when exports are made to any country by post parcel on value payable basis. Correct Answer False Your Answer False True/False Question Sandby credis are introduced by US Banks because they were not permitted to issue on demand guarantees. Correct Answer True Your Answer True
-4-
International Finance_6
Select The Blank Question The international liquidity problem was tackled effectively by a reserve asset known as ________. Correct Answer Special drawing right Your Answer Floating exchange True/False Question Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True Your Answer True Multiple Choice Single Answer Question For a spot transaction carried out on Tuesday, where both centers have holiday on Wednesday, currencies will be exchanged on :Correct Answer Thursday if it is a working day at both the centers Your Answer Thursday if it is a working day at both the centers Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer Monday Select The Blank Question During the fixed rate exchange system prevailing in India, the intervention currency was ________. Correct Answer Sterling Pound Your Answer Indian Rupees Multiple Choice Single Answer Question Inhow many groups are INCOTERMS classified? Correct Answer Four Your Answer Four Multiple Choice Single Answer Question The Direct Investment abroad through share swap arrangement under normal route is permitted in a :Correct Answer JV/WOS Your Answer Holding Co Multiple Choice Single Answer Question Samuraibonds are Correct Answer Foreign yen bonds issued to non resident entities in Japanese Market Your Answer Foreign yen bonds issued to non resident entities in Japanese Market Select The Blank Question The large flow of money internationally was caused primarily by the oil price hikes engineered by ________. Correct Answer OPEC countries Your Answer European Countries True/False Question Proposal for Investment abroa by Indian not falling under automatic route are submitted to Exchange Control Department of RBI. Correct Answer True Your Answer True
-5-
International Finance_6
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single Answer Question What do you mean by a derivative? Correct Answer One which has been derived from other fundamental instruments Your Answer One which has been derived from other fundamental instruments Multiple Choice Multiple Answer Question With reference to ECB, fund raising activity includes :Correct Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of shares Your Answer Syndicate loans, issue of shares , Floating rate notes, bonds, debentures Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer USD 1=Rs 50.5000 Match The Following Question Correct Answer Your Answer Merchant banking Portfolio management Note issuing and underwrting facility Securitization Issue of debt in the form of tradeable security Issue of debt in the form of tradeable security Prime borrower Highest credit rating Venture capital Traditional banking service Loans and cash credit against security Highest credit rating Select The Blank Question A Bill of exchange payable 45 days from date of shipment, is a means of ________ from seller to the buyer. Correct Answer Credit Your Answer Intimation of shipment Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer An Irrevocable credit Multiple Choice Single Answer Question Who introduced the worlds first exchange traded currency futures? Correct Answer Chicago Mercantile Exchange Your Answer Bretton woods Agreement Multiple Choice Single Answer Question Name the members of Exchange Banks association :Correct Answer Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar, Your Answer All banks at any business center True/False Question In developed markets, speculators play important role in determining the trend of currency rates. Correct Answer True Your Answer True
-6-
International Finance_6
Multiple Choice Multiple Answer Question What are the objectives of International Chamber of Commerce? Correct Answer Champion the global economy as a force of economic growth , Creating of job and prosperity Your Answer Champion the global economy as a force of economic growth , Creating of job and prosperity Multiple Choice Single Answer Question Under which contracts the seller pays the import duty for the buyer? Correct Answer DDP Your Answer DDU Multiple Choice Multiple Answer Question In which cases can a Resident Individual in India acquire foreign securities without prior approval? Correct Answer Gift from a person outside India, or Inheritance from a person resident in or outside India , Security issued under Cashless employees stock option scheme Your Answer Gift from a person outside India, or Inheritance from a person resident in or outside India , Security issued under Cashless employees stock option scheme Multiple Choice Single Answer Question The document formulated by the borrower of syndicated loan, and the arranger, which contains details of individual shares etc of co-lenders is known as :Correct Answer Memorandum of information Your Answer Memorandum of information Multiple Choice Multiple Answer Question Why does a Transaction exposure arise? Correct Answer Trading flows , Dividend or capital flows Your Answer Trading flows , Dividend or capital flows Match The Following Question Correct Answer Your Answer LastStage Form a single currency Form a single currency The First stage in the Europeand and Monetary Union (EMU) Free movement of capital in EC Free movement of capital in EC Stage II in EMU Establishment of European Monetary Institute Establishment of European Monetary Institute Stage III in EMU Members to meet the convergence criteria and fix the exchange rates Members to meet the convergence criteria and fix the exchange rates Multiple Choice Single Answer Question Value date means the date on which :Correct Answer Delivery of both the currencies will be made Your Answer Delivery of both the currencies will be made True/False Question Till August 1994 India was following the Indirect Methodof Rate quotation. Correct Answer False Your Answer True
-7-
International Finance_6
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Single Answer Question A Specific date forward contract can be booked so as to be :Correct Answer Payable on a specific date of the calendar month Your Answer Payable on a specific date of the calendar month True/False Question ECGC offers isurance protection to Indian exporters againt payment risks. Correct Answer True Your Answer True Multiple Choice Single Answer Question What is a bill of lading? Correct Answer Transport document representing movement of goods by water. Your Answer Transport document representing movement of goods by water. Multiple Choice Multiple Answer Question Which document is used for transportation by air, rail, road, marine? Correct Answer Multimodal transport document , Combined Transport document Your Answer Multimodal transport document , Combined Transport document True/False Question Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct Answer False Your Answer False Select The Blank Question After the second world war many countries adopted the route of ________ to give facelift to sagging economies. Correct Answer Devaluation of their currencies Your Answer Devaluation of their currencies Multiple Choice Multiple Answer Question What do you understand by Commercial Risk? Correct Answer Protracted default by the buyer , Insolvency of the buyer Your Answer Insolvency of the buyer , Risk of strikes due to which commercial activity is haulted Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment of Gifts of GBP 5000 per year per donor Multiple Choice Single Answer Question A Spot Transaction between Japanese Yen and Sterling carried out on Friday in Singapore, the settlement day will be Correct Answer Following Tuesday if it is a working day in all the three centers Your Answer Following Tuesday if it is a working day in all the three centers
-8-
International Finance_6
Multiple Choice Multiple Answer Question Name the services provided by 'Reuter 3000' in forex market:Correct Answer Quotation of forex rates, interest rates , Electronic broking by matching the rates Your Answer Quotation of forex rates, interest rates , Calculate and quote rates for transactions Multiple Choice Single Answer Question What do you understand by a forex option? Correct Answer Right and not the obligation to take or give future delivery of an agreed quantity at certain price Your Answer Right and not the obligation to take or give future delivery of an agreed quantity at certain price True/False Question Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer True Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade Your Answer Companies which have international trade Select The Blank Question The ________is a Floating rate index for swaps. Correct Answer US Commercial paper rate Your Answer US Commercial paper rate True/False Question Services of a Paying bank are taken when currencies of exporters country or the importers country is not involved in the transaction. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question Which two countries were included to convert the group of five into the group of seven? Correct Answer Canada , Italy Your Answer Canada , Italy Multiple Choice Multiple Answer Question Which factors influence the valuation of cash flows? Correct Answer Incomplete capital market , Availability of projkect specific concessional finance, Your Answer Availability of projkect specific concessional finance, , volatility of exchange rates True/False Question PP Form is required when exports are made to any country by post parcel on value payable basis. Correct Answer False Your Answer False True/False Question Sandby credis are introduced by US Banks because they were not permitted to issue on demand guarantees. Correct Answer True Your Answer True
-9-
International Finance_6
Select The Blank Question The international liquidity problem was tackled effectively by a reserve asset known as ________. Correct Answer Special drawing right Your Answer Floating exchange True/False Question Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True Your Answer True Multiple Choice Single Answer Question For a spot transaction carried out on Tuesday, where both centers have holiday on Wednesday, currencies will be exchanged on :Correct Answer Thursday if it is a working day at both the centers Your Answer Thursday if it is a working day at both the centers Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer Monday Select The Blank Question During the fixed rate exchange system prevailing in India, the intervention currency was ________. Correct Answer Sterling Pound Your Answer Indian Rupees Multiple Choice Single Answer Question Inhow many groups are INCOTERMS classified? Correct Answer Four Your Answer Four Multiple Choice Single Answer Question The Direct Investment abroad through share swap arrangement under normal route is permitted in a :Correct Answer JV/WOS Your Answer Holding Co Multiple Choice Single Answer Question Samuraibonds are Correct Answer Foreign yen bonds issued to non resident entities in Japanese Market Your Answer Foreign yen bonds issued to non resident entities in Japanese Market Select The Blank Question The large flow of money internationally was caused primarily by the oil price hikes engineered by ________. Correct Answer OPEC countries Your Answer European Countries True/False Question Proposal for Investment abroa by Indian not falling under automatic route are submitted to Exchange Control Department of RBI. Correct Answer True Your Answer True
- 10 -
International Finance_6
- 11 -
International Finance_7
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Select The Blank Question A Documentary credit issued on the strength of another documentary credit is known as ________. Correct Answer Back to Back credit Your Answer Back to Back credit True/False Question The Option period in the forward contract is at the option of the Banker, hence the bank has to be very conservative in quoting rates. Correct Answer False Your Answer True True/False Question JV means Joint venture and WOS means World of Security. Correct Answer False Your Answer True Select The Blank Question The rate of interest on rupee finance for exports is not exceeding ________ less than PLR. Correct Answer 0.025 Your Answer 50 basis points over LIBOR True/False Question The working of the IBRD and IMF in recent has blurred the difference between the two Correct Answer True Your Answer True Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Single Answer Question In case the value date happens to be a holiday then the settlement is done :Correct Answer On the next working day Your Answer On the next spot day(third day) Select The Blank Question Legalised invoice is also called ________ invoice. Correct Answer Visaed Your Answer Visaed True/False Question The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. Correct Answer False Your Answer False Select The Blank Question An exchange rate for $ was48.2050, it is now 48.2075, then one says that it has moved ________ basis points Correct Answer 25
-1-
International Finance_7
Your Answer 0.0025 Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer An Irrevocable credit Select The Blank Question Profitability of a project in China to an Indian may be enhanced by ________. Correct Answer Concessionary finance available in China Your Answer Concessionary Finance available in India Multiple Choice Single Answer Question A country needs external commercial borrowings to :Correct Answer Meet the adverse balance of payments position Your Answer Meet the adverse balance of payments position Match The Following Question Correct Answer Your Answer Maturity of future Time when actual commodity is delivered Last date of exercising option Note issuance facility Euronotes Euronotes Bearer security issued in currency other than that of the country of issue Eurobonds Peformance bond or security deposit Margin on future Peformance bond or security deposit Time when actual commodity is delivered Multiple Choice Single Answer Question A Bank quotes interest rate of 9.50/10.00 for six months dollar deposit, here the bid rate is :Correct Answer 9.50% P.A. Your Answer 9.50 divided by 6 =1.58% P.A. Multiple Choice Multiple Answer Question With reference to ECB, fund raising activity includes :Correct Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of shares Your Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of shares Multiple Choice Single Answer Question In which of the funding facilities the repayment period is between 3 to 5 years ? Correct Answer C.C.F.F. Your Answer Stand By Arrangement Multiple Choice Multiple Answer Question Why is Bill of Exchange a Quasi Negotiable Instrument? Correct Answer It represents title to goods , It is issued under Sale of Goods act Your Answer It represents title to goods , It is issued under Sale of Goods act Multiple Choice Multiple Answer Question What do you understand by 'Foreign Exchange Risk'? Correct Answer The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows Your Answer The change in value of currency alters the home currency value of an asset , liability, , Inability to control various factors contributing to International trade
-2-
International Finance_7
Multiple Choice Single Answer Question The document formulated by the borrower of syndicated loan, and the arranger, which contains details of individual shares etc of co-lenders is known as :Correct Answer Memorandum of information Your Answer Participation certificate Multiple Choice Multiple Answer Question Why does a Transaction exposure arise? Correct Answer Trading flows , Dividend or capital flows Your Answer Trading flows , Dividend or capital flows Multiple Choice Single Answer Question What is the volume of the world's total speculative transactions? Correct Answer Roughly 90 % of the total turnover Your Answer 70% of the total turnover Multiple Choice Multiple Answer Question A Forward purchase contract was booked with an authorised dealer and subsequently cancelled .It :Correct Answer Can be booked again with another dealer , Can be booked again with the same dealer Your Answer Can be booked again with another dealer , Can be booked again with the same dealer True/False Question Floating rate notes are traded in secondary market also. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question What were the immediate causes of converting the group of 5 into group of 7 and convene their meeting in late 1985? Correct Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased Your Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased Multiple Choice Single Answer Question For a spot transaction carried out on Tuesday, where both centers have holiday on Wednesday, currencies will be exchanged on :Correct Answer Thursday if it is a working day at both the centers Your Answer Thursday if it is a working day at both the centers Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer American Dollar Multiple Choice Single Answer Question When was the first currency swap introduced in world market? Correct Answer 1970 Your Answer 1970 Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations
-3-
International Finance_7
Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations , which have greater gold parity Multiple Choice Single Answer Question Under which method of payments is the buyer not required to pay till he gets the possession of the documents? Correct Answer Documents against payment terms specified in the bill of exchange Your Answer Documents against payment terms specified in the bill of exchange Multiple Choice Single Answer Question How does ECGC protect banker's against risks for export finance? Correct Answer Issuing various guarantees covering different risks connected with exports at nominal premium Your Answer Issuing various guarantees covering different risks connected with exports at nominal premium Multiple Choice Single Answer Question What is a bill of lading? Correct Answer Transport document representing movement of goods by water. Your Answer Transport document representing movement of goods by water. Select The Blank Question In Indian interbank market forward rates are generally quoted on the basis of ________. Correct Answer Calendar month Your Answer Calendar month Select The Blank Question Fixed interest rate Eurobond without the option to convert to equity is known as ________. Correct Answer Straight Debt Your Answer Straight Debt True/False Question Yankee bond is issued for domestic borrowers. Correct Answer False Your Answer False Multiple Choice Single Answer Question Examples of hedge are: Correct Answer Buy when you are having short position Your Answer Buy when you are expecting fall in prices Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer USD 1=Rs 50.5000 + margin True/False Question Proposal for Investment abroa by Indian not falling under automatic route are submitted to Exchange Control Department of RBI. Correct Answer True Your Answer True Multiple Choice Single Answer Question What is LIBOR? Correct Answer Rate of interest for inter bank lending of funds for various maturities
-4-
International Finance_7
Your Answer Interest rate in Money Market in London Multiple Choice Multiple Answer Question The various arms of World Bank are: Correct Answer International Development Agency , Multinational Investment Guarantee Agency Your Answer International Development Agency , Multinational Investment Guarantee Agency , Asian Development Bank True/False Question The American Dollar market comprises of the domestic segment of USD the offshore segment of USD. Correct Answer True Your Answer False Match The Following Question Correct Answer Your Answer Cancellation of contracts above USD 500000 ECD ECD Forward Purchase contract currency at premium Presume earliest delivery Presume earliest delivery Forward purchase contract currency at discount Presume latest delivery Presume latest delivery Exchange margins FEDAI FEDAI Multiple Choice Single Answer Question Value date means the date on which :Correct Answer Delivery of both the currencies will be made Your Answer Value of currency will be paid in terms of goods or commodities Multiple Choice Multiple Answer Question How is the entry into any conuntry's money market or capital market is restricted? Correct Answer Because of different tax systems , Because of different credit standards Your Answer Because of different tax systems , Because of protectionism Multiple Choice Single Answer Question What are the functions of Export Import Bank of India? Correct Answer Finance functions and development functions Your Answer Finance functions and development functions Multiple Choice Single Answer Question A weight list, a packing list used in international trade are which type of documents? Correct Answer Operational Documents Your Answer Bipartite documents Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade Your Answer Companies which have international trade
-5-
Chapter – 1 – Introduction to international capital markets Euro currency ; domestic markets ; US Japan ; Switzerland ; UK ; Australia ; Canada ; European ; centers in ECU; Chapter – 2 – International Finance Markets - the U.S. dollar Market ; The U.S. Dollar Market ; The Japanese Yen Market ; The Sterling Market ; The Euro Market Has Been discussed in the next chapter ; Recent development in international Finance Markets ; Chapter – 3 – International Monetary and Financial System The country’s central ban agreed to buy back their currency at a certain rate of gold; Melting down of gold was freely allowed ; There was unrestricted movement of gold (i.e. import and / or export) The total money supply in the country was determined by the quantum of gold reserves in the country The international monetary fund ; quotas ; funding facilities ; regular facilities tranche policies ; restore Tranche credit Tranche ; extended arrangement (extended fund facility (EEF) ; Standard Arrangement (enlarged Arrears Policy) Special facilities (compensatory and contingency financing facility (CCFF) Buffer stock Financing Facility ; Supplemental Reserve Policy (SRP); Reserve Tranche ; Credit Tranche ; Stand by arrangement ; Extended arrangement or extended fund facilities (EFF) special facilities ; CCFF ; Buffer stock financing Facility (BSFF) ; Supplemental resources facility (SRF) Enhanced structural adjustment facility (ESAF) The fixed exchange rate system Problems faced by the fixed exchange rate system ; failure of fixed rate system ; the European monetary system (EMS) ; Economic and monetary union ; Recent developments ; post – Maastricht developments; emergence of EURO The group of seven ; special drawing rights (SDRS) ; The liquidity problems (SDRS) ; the world bank group ; the world bank; international development agency (IDA) ; international finance corporation (IFC) ; The multinational investment Guarantee Agency (MIGA) Chapter – 4 – External commercial borrowing – country ; company ; Equity ; Fund raising ; underwriting ; hedging ; arbitraging ; note issuance facility ; Mechanism and documentation ; syndicated loans ; floating rate notes ; Flip – Flop FRN ; MIS – Mich FRN ; MINI Max FRN ; Capped FRNs, Perpetual FRNs; VRN structured FRNs; Terms and conditions of FRN Ero Commercial paper (ECP) ; ADRs and GDRs; GDR – Global depositary Receipts ; The roles of different parties involved in launching of GDR GDR – Global Depositary Receipts ; The roles of different parties involved in launching of GDR steps involved in issuance of GDR are as follows Pricing and Closing ; costs ; Advantages & Disadvantages of external commercial borrowing Chapter – 5 – Documents used in International Trade ; Regulatory requirements ; operational requirements ; commercial documents ; financial documents transport documents ; risk covering documents ; official / regulatory documents ; miscellaneous documents ; Commercial documents ; proforma invoice ; commercial invoice ; consular invoice customs invoice ; legalized invoice ; combined certificate of origin and value ; financial documents ; bill of exchange ; The second of the same tenor and date unpaid ; the first of the same tenor and date unpaid ;
1 5 – 10
13 – 14
15 – 17
18 – 19 20 – 23 24 – 27 31 – 35 36 – 39
40 – 41 43 – 46
47 – 49
or similar words ; sight B/E; Tenor ; time B/E; DP Basis ; document against Payment Basis ; Documents against Acceptance Basis Transport documents; bill of lading ; received for shipment bill of lading ; on board bill of lading ; Short form bill of lading ; long form bill of lading clean bill of lading ; claused bill of lading ; through bill of lading ; straight bill of lading ; charter party Bill of lading ; container bill of lading container bill of lading ; combined transport B/L or Mulit Modal B/L lash bill of lading house bill of lading ; Airway bill ; Air consignment Note ; House Air way bill ; Postal Receipt ; Courier /Expected delivery service ; multimodal transport document ; risk covering documents ; insurance policy ; Insurance cover note ; official documents export declaration forms ; export certificate; Certificate of origin ; Miscellaneous documents ; packing list ; weight certificate ; certificate of analysis and quality ; certificate of inspection ; health certificate ; phytosanitary / Radiation / Fumigation Chapter 6 – Methods of payment ; advance payment ; bill for collection ; open account ; barter trade ; bank guarantee ; letter of credit (L / C) Seller wants buyer wants ; parties to a documentary credit ; applicant issuing bank advising ; confirming bank beneficiary ; negotiating bank ; reimbursing bank Types of letters of credit ; revocal letter of credit ; irrevocable letter of credit ; confimed irrevocable letter of credit ; transferable l / c revolving letter of credit ; credit available by installments; back to back letter of credit ; anticipatory credit or red clause letter of credit ; green clause letter of credit ; deferred payment letter of credit ; standby letter of credit ; flow chart of export transaction under letter of credit Flow chart of export transaction under letter of credit ; various steps in the transaction are as under ; steps no. description Chapter 7 – Export / Import Finance ; - Part I import finance ; import financing through trust receipts / import loans ; import financing through issuing l/ c or bank guarantee ; part II – Export Finance Timely ; adequate ; cheaper on liberal terms ; sources for raising finance ; own funds ; 2 friends and relative ; 3 advance payment from buyer ; 4 Trade credit from suppliers 5 banks and financial institutions ; pre-shipment credit (P.C) Post shipment credit ; advance against cash incentives / duty draw back ; forfeiting ; rediscounting of export bills abroad ; buyer’s credit ; supplier’s credit Chapter – 8 – Procedure in connection with foreign investment in India – Seciton – I foreign direct investment ; FERA ; the practice at which a company can issue shares to non residents ; fema ; esop ; section II – Foreign technical collaboration ; General Hotel & Tourism Related Industries ; procedure for granting approval; I / We hereby certify that ; Documentation ; Standard conditions attached to approval for technology agreement ; no objection ; the agreement shall be subject to Indian laws: Section – III – Portfolio investment ; explanation ; the regulations regarding portfolio investments by NRIs / PIOs are as under ; NRI / PIOs ; Section – IV – Other investments ; Section V – procedure for opening branch / project / Liaison office ; Chapter – 9 – Direct investment outside India – overseas investment division TDR ADR GDR the criteria for investment under the automatic route are as under ; JV/WOS; ODA; The schemes for overseas investment by partnership firms ; criteria for overseas investment by a registered partnership firm under the automatic route ; The procedure to be followed by a partnership firm for making investment under the automatic route ; the procedure to be followed by partnership firms which are not eligible
50 – 53
55 – 57
61 – 66
67 – 69
70 – 71 73 – 74
75 -76 79 – 83 84 – 88 89 - 92 95 – 99
100 – 102
under the automatic route ; restrictions for setting up of a second generation company ; resident individual India can acquire foreign securities without prior approval in the following cases ; provided that ; WOS Chapter – 10 – Taxation ; Bilateral relief Unilateral relief ; for the purpose of this provision Part – 2 Forex risk management and hedging techniques Chapter – 1 Foreign exchange markets – The international Market ; survey were ; the market ; the participants ; information and communication system ; the payment system ; the foreign exchange market in India Chapter – 2 – Exchange Rates – Exchange rage quotes ; direct and indirect rates ; direct rates ; indirect rates; spot and forward rates value rate; ready or cash ; value today ; TOM; spot ; forwards; glossary of market terms; Foreign exchange risks ; transactions exposure ; translation exposure ; economic exposure; Translation – moving towards a consensus ; economic exposure ; an overview ; scenario exchange rages in India ; Inward remittances export encashment of foreign currency travelers cheques ; encashment of foreign currency notes; outward remittances ; imports ; issuing foreign currency travelers cheques issuing foreign currency notes ; Type of transaction exchange rate nomenclature ; Factors affecting movement of exchange rates ; summary Chapter – 3 – Forward contracts - Forward cover for merchants – forward purchase cover forward sales contract - repayment of foreign currency loans – period of delivery – cross currency booking (sale / Purchase ) ; utilization of the forward cover ; cancellation ; calculation of exchange rates for forward contracts Cancellation ; early delivery and rollover of forward contracts ; forward sale contracts ; forward purchase contract ; early delivery ; rollover charges Chapter 4 – Options and Futures – History and development ; recent trends ; key features of options and futures ; premium ; maturity or expiration date ; exercise ; in the money ; at the money ; out of the money American option European option ; underlying asset price time before expiration ; underlying asset price ; time before expiration the rate of interest volatility Pricing and analysis ; pricing of options ; underlying asset price ; exercise price ; options and futures products today ; interest rate options ; foreign exchange options and futures ; equity linked options ; commodity linked futures and options Chapter – 5 - Swaps What are swaps ; interest rate swaps ; lowering financial cost ; hedge exposure to interest rate risk ; restructuring the debt in the balance sheet ; amortizing and accreting swaps ; forward swaps ; Reversible swaps ; basis swaps Currency swaps ; lowering funding cost ; entering restricted capital markets ; reducing currency risk ; supply demand imbalances in the markets ; amortizing currency swaps ; accreting currency swaps ; floating – for floating rate currency swaps ; interest payments ; asset swaps PART 3 – AGENCIES INVOLVED IN INTERNATIONAL TRADE Chapter – 1 – Export import Bank of India ; Functions of Exim Bank ; the exim bank performs the following functions ; incidental functions ; operations programmes ; direct financial assistance to exporters ; consultancy and technology services ; pre-shipment credit ; facilities for export – oriented units ; overseas investment facility buyer credit facilities for
105 – 106 109 – 114 117 – 123
124 – 127
128 – 129 131 – 137
138 – 141 143- 147
148 – 152 155 – 157
158 – 161
163 – 166
deemed exports small scale industry export bills rediscounting; the latest new schemes in operation since 1992 are the following Chapter – 2 – Reserve Bank of India Exchange controls in India – RBI as the exchange control authority ; Authorized dealers (Ads) ; Money charges ; other receipts ; payment for imports ; other payments ; delegation to Ads; securities ; foreign currency accounts; liberalization of exchange control Sodhani Committee Recommendations ; Exchange rate management ; Chapter – 3 – Foreign Exchange dealers association of India ; Uniform customs and practice for collection ; Chapter 4 – International chamber of commerce – ICC – WCF – IBCC – WCF Chapter – 5 – Export credit guarantee corporation of India ; ECGC; need for export credit insurance ; credit insurance policies ; scr or standard policy ; turnover policy ; small exporter policy ; specific shipment policy (short term); buyer wise policy ; specific policy for supply contract insurance cover for buyer’s credit and line of credit Services Policy ; construction works policy ; maturity factoring ; Guarantees to banks ; packing credit guarantee ; export production finance guarantee ; post – shipment credit guarantee ; export finance guarantee ; export performance guarantee; export finance (overseas lending ) Guarantee Part – 4 – Miscellaneous Chapter 1 – Exchange Earner’s foreign currency (EEFC) Status holder exporter ; individual professional ; others; permissible credits ; permissible debits ; Chapter 2 – Country Risk ; Quantifying country risk ; A comprehensive example ; use of country risk ; assessment ; Chapter 3 – International capital Budgeting - The Basic Frame work Chapter 4 – Incoterms – Group E departure EXW ; Group F Main carriage unpaid ; FAS ; FOB ; CFR ; CIF ; CPT ; CIP ; Group C; Group D ; Arrival DAF ; DES ; DEQ; DDU CTD / MTO ; DDP ; delivered duty paid (CTD / MTO) Chapter – 5 – Actuals ; arbitrage ; bankers’ acceptance bond (BAS) ; Bearer Bond ; Bid rate ; Bond ; Bull; call option ; caps ; cash commodity ; cash market ; cedel ; certificate of deposit (CD) class of option ; closing price ; commission ; commercial paper (CP) ; contract specifications ; convertible bond ; coupon ; cover; delivery ; delivery month ; equity ; equity swaps ; equity collar ; Eurobond ; Euro clear ; euro commercial paper; euro –currency ; Exercise price ; expiration date; floating rate note ; fundamental Analysis ; futures contract hedge ; Hybrid ; Interest Rate swap; Intermediation ; Intrinsic Value ; Libor ; Long margin ; margin call maturity naked position ; note issuance facility (NIF) Option ; overbought ; oversold ; physical market ; position ; premium purchaser ; put option ; settlement price short ; speculator ; strike price ; straight debt tap ; technical analysis tranche ; tombstone volatility ; volume ; withholding tax ; yankee bond ;
169 – 173
174 – 177 179 – 180 183 – 183 189 – 190
191
195 199 203 – 204 207- 212 215 – 217
218 -219 220 – 221
International Finance_9 LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question Which functions does the Bill of Lading serve? Correct Answer It is a document of title to goods. , It is receipt of goods Your Answer It is a document of title to goods. , It is receipt of goods Multiple Choice Single Answer Question A Bank quotes interest rate of 9.50/10.00 for six months dollar deposit, here the bid rate is :Correct Answer 9.50% P.A. Your Answer 9.50% P.A. Multiple Choice Single Answer Question What is Sovereign Risk? Correct Answer Risk of lending to the government of a country Your Answer Risk of lending to the government of a country Multiple Choice Single Answer Question How does ICC help poor countries? Correct Answer Attract Foreign Direct investments togeather with UNCTAD Your Answer Attract Foreign Direct investments togeather with UNCTAD Multiple Choice Multiple Answer Question As per BIS, recovery from the recent crisis in global capital market was mainly due to Correct Answer Rapid and appropriate policy response in US and other countries , Increase in Foreign Direct Investments , free flow of credit Your Answer Rapid and appropriate policy response in US and other countries , Increase in Foreign Direct Investments , free flow of credit True/False Question Out of 15 member countries in European Union 12 countries commiteed themselves for a single currency. Correct Answer False Your Answer True True/False Question In red clause credit some clauses are printed in Red ink. Correct Answer True Your Answer True True/False Question Transfer of funds for investment abroad
-1 -
International Finance_9 is allowed freely. Correct Answer True Your Answer False Select The Blank Question EEFC account holder is allowed to have ________ facility. Correct Answer Cheque book and nomination Your Answer Credit card, safe custody, safe deposit locker without any fee Select The Blank Question Fixed interest rate Eurobond without the option to convert to equity is known as ________. Correct Answer Straight Debt Your Answer Interest rate swap True/False Question An Indian importing goods from USA pays dollars in India. Correct Answer False Your Answer True Match The Following Question Correct Answer Your Answer PP Form Export Declaration form Export Declaration form Health Certificate Fumigation certificate Export Declaration form Certificate of Inspection As per importers requirement Export Declaration form Certifiate of Origin Export Promotion Council Export Declaration form Multiple Choice Multiple Answer Question For issuing a Documentary credit The applicant is required to provide to the issuing bank details about Correct Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents Your Answer The purchase-sales contract, the mode of payment, the tenor of payment , The track record of the buyer and seller Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an
-2 -
International Finance_9 undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given on behalf of a certain person to another person in different country , It is a stamped agreement and is not valid unless it is signed by the issuer True/False Question CFR = FOB plus freight paid by seller + insurance paid by seller. Correct Answer False Your Answer True Select The Blank Question Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer OPEC True/False Question Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer True Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your Answer Supplemental Reserve Policy Multiple Choice Multiple Answer Question What are the sources of raising funds for exports? Correct Answer Suppliers credit , Forfaiting Your Answer Suppliers credit , Forfaiting , Buyers credit , Foreign currency or Rupee finance True/False Question Normally the forward contracts are booked for making huge profits. Correct Answer False Your Answer False True/False Question Head office of ICC is in Paris because of its First President Eliance Clementel. Correct Answer True Your Answer False Select The Blank Question A ________ Bill of lading does not specify the terms and conditions of carriage.
-3 -
International Finance_9 Correct Answer Short Form Your Answer Short Form Multiple Choice Single Answer Question What is the volume of the world's total speculative transactions? Correct Answer Roughly 90 % of the total turnover Your Answer 70% of the total turnover True/False Question Till August 1994 India was following the Indirect Methodof Rate quotation. Correct Answer False Your Answer False Select The Blank Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme. Correct Answer Overseas investment facility Your Answer Overseas investment facility Multiple Choice Single Answer Question Mr P has exported goods in May 2005 and is expecting payment of Euro 25000 by the last week of Sept 2005. Give details of the forward contract he can book :Correct Answer He can book a sale contract any time from May 2005 till Mid Sept 2005, for Euro 25000 or less, for maturity last week of Sept. Your Answer He can book a contract for Forward Purchase, any time from May 2005 till Mid Sept 2005, for Euro 25000 or less, for maturity last week of Sept. Select The Blank Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________. Correct Answer Shelf Registration Your Answer Shell Registration Multiple Choice Multiple Answer Question Which common details will be available in any bill of Lading? Correct Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment Your Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment , The name of the vessel , The date of transportation and contract of transportation Select The Blank Question Under the ________ standard the Country's Central Bank promised to buy back the currency at certain rate of Gold.
-4 -
International Finance_9 Correct Answer Gold Your Answer Interest Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer ADRs Select The Blank Question The type of trade where a country sells orange juice in return for cars is known as ________. Correct Answer Counter Trade Your Answer Non money trade Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment to EOUs in India for services rendered by them , Payment of Gifts of GBP 5000 per year per donor Multiple Choice Multiple Answer Question Under the liberalisation through FEMA, what can an AD offer to the clients, without the prior permission of RBI or Government? Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Your Answer Caps and collars, and forward rate agreements , Good and competitive exchange rates and cross currency rates Multiple Choice Multiple Answer Question Sterling Market is attractive for an international investor because Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Your Answer Choice of issuing medium term and long term bonds , Less controls and less formalities to be completed , Linking of issues to currency swaps Multiple Choice Single Answer Question Under which contracts the seller pays the import duty for the buyer? Correct Answer DDP Your Answer DDP True/False Question PP Form is required when exports are made
-5 -
International Finance_9 to any country by post parcel on value payable basis. Correct Answer False Your Answer True Multiple Choice Multiple Answer Question What were the immediate causes of converting the group of 5 into group of 7 and convene their meeting in late 1985? Correct Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased Your Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased , The heads of G5 insisted to have a meeting , Failure of IMF to control the exchange rates Multiple Choice Single Answer Question What are the powers of money changers? Correct Answer Purchase and sell foreign currency notes and travellers cheques Your Answer Purchase and sell foreign currency notes and travellers cheques, give import and export finance Multiple Choice Single Answer Question Who can open an EEFC account? Correct Answer Individuals , firms, companies, resident in India Your Answer Individuals , firms, companies, resident in India Multiple Choice Single Answer Question What is the role of ICC towards WTO? Correct Answer To provide world business recommendations to WTO Your Answer To further the cause of WTO Match The Following Question Correct Answer Your Answer Swap price Difference in prices of two legs of buying and selling Quoting rate for both buying and selling a currency Euro Market Market in Euro currencies Market in Euro currencies Making market Quoting rate for both buying and selling a currency Difference in prices of two legs of buying and selling Spread Price difference between bid and offer Maket of 'Euro'
-6 -
International Finance_9 Select The Blank Question Position in a currency is said to be ________, when sales equal purchases. Correct Answer Square Your Answer Awkward Select The Blank Question Hotels and Airline companies are allowed to receive payments in Indian rupees from foreign tourist without insisiting on ________. Correct Answer Encashment certificate Your Answer Encashment certificate Multiple Choice Multiple Answer Question Why is Bill of Exchange a Quasi Negotiable Instrument? Correct Answer It represents title to goods , It is issued under Sale of Goods act Your Answer It represents title to goods , It is issued under Transportation act , It is issued under Bill of exchange act Multiple Choice Single Answer Question Which details about forward contracts do the Exchange Controls verify ? Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000 Your Answer Details of all contracts booked and cancelled beyond a specified limit Multiple Choice Single Answer Question In the context of International economy ,the period between 1920s and 1930s is known as Correct Answer Great Depression Your Answer Great Depression Multiple Choice Multiple Answer Question What do you understand by Commercial Risk? Correct Answer Protracted default by the buyer , Insolvency of the buyer Your Answer Protracted default by the buyer , Insolvency of the buyer
-7 -
International Finance_10
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates Select The Blank Question ________ is the agency of ICC which deals with the maritime crime. Correct Answer International Maritime Bureau Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your Answer
Buffer Stock Facility
True/False Question
Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of payment Your Answer The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer US Dollar
-1 -
International Finance_10 Your Answer
US Dollar
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not Cost of evluation does not justify analysis justify analysis
Stock market analysis
Banks are ahead
Factors' values
Weightages %
Factors' values
100% of total
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer
Pegged to Single currency
Match The Following Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity is delivered
Last date of exercising option
Note issuance facility
Euronotes
Euronotes
Bearer security issued in Eurobonds currency other than that of the country of issue
Eurobonds
-2 -
International Finance_10 Margin on future
Peformance bond or security deposit
Peformance bond or security deposit
True/False Question
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct Answer False Your Answer
False
True/False Question
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What are margins, with reference to futures market? Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Your Answer Which enables the investor to market the same in the secondary market Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
-3 -
International Finance_10 Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer Preshipment credit up to six months for construction and turnkey projects abroad Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily. Correct Answer Economies Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer US Dollar Your Answer
US Dollar
Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer Control by Government' Your Answer
Recurrence
Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer Sharing of risk of non payment by supplier
-4 -
International Finance_10 Your Answer
True/False Question
Sharing risk of Non payment by the Syndicate of Banks giving loans
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them True/False Question
Funding Options in domestic yen market are Futures, FRAs, Call and put options. Correct Answer True Your Answer
True
True/False Question
There is no difference between CIP and CIF contracts except the mode of transportation. Correct Answer True Your Answer
True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade
-5 -
International Finance_10 Your Answer
Companies which have international trade
Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Primary activity
Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer
An Irrevocable credit
True/False Question
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. Correct Answer False Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer Preshipment credit , Post shipment credit , Duty Draw back Your Answer
Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value Multiple Choice Multiple Answer
-6 -
International Finance_10 Question
What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer Buy when you are having short position Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer? Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount
-7 -
International Finance_10 Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer Prices of capital market instruments change and are expected to change drastically Your Answer Prices of capital market instruments change and are expected to change drastically True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer False Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed
-8 -
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question What are the features of Settlement price ? Correct Answer Price established by the clearing house at the end of each trading session , It is used to determine the net gain, loss, margin call and next days price limits Your Answer Price established by the clearing house at the end of each trading session , It is used to determine the net gain, loss, margin call and next days price limits Select The Blank Question Legalised invoice is also called ________ invoice. Correct Answer Visaed Your Answer
Visaed
True/False Question
The working of the IBRD and IMF in recent has blurred the difference between the two Correct Answer True Your Answer
False
Multiple Choice Multiple Answer Question Under the liberalisation through FEMA, what can an AD offer to the clients, without the prior permission of RBI or Government? Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Your Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements , Good and competitive exchange rates and cross currency rates Select The Blank Question ________Bill of lading must specify the name of the ship. Correct Answer "On Board" Your Answer
"On Board"
Multiple Choice Single Answer Question What is the immediate cause for the growth of futures and options in the last two decades? Correct Answer Increase in volatile trading conditions
Your Answer
General market investments
Multiple Choice Single Answer Question In the context of International economy ,the period between 1920s and 1930s is known as Correct Answer Great Depression Your Answer
Great Depression
Match The Following Question
Correct Answer
Your Answer
Departure
EXW
EXW
Main carriage paid
CFR
CFR
Main carriage unpaid
FAS
FAS
Arrival
DES
DES
Multiple Choice Single Answer Question What is the statutory requirement about receivables of exports from India? Correct Answer The export receivables must be repatriated within six months of the date of shipment. Your Answer The export receivables must be repatriated within six months of the date of shipment. True/False Question
An exporter expecting payment in$ next month will book a forward purchase contract. Correct Answer False Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of IDA Loan are: Correct Answer It gives loans to poorer countries , The rate of interest is zero percent , The repayment period is very long 40 years Your Answer It gives loans to poorer countries , The rate of interest is zero percent , The repayment period is very long 40 years Multiple Choice Multiple Answer Question What is the duty of the AD while booking a forward contract?
Correct Answer Verify the suitable documentary evidence, and that the customer is exposed to risk , Ensure that a genuine transaction exists Your Answer Verify the suitable documentary evidence, and that the customer is exposed to risk , Ensure that a genuine transaction exists , Protect the customer fully from exchange risk Multiple Choice Multiple Answer Question Criteria for Direct investment abroad under normal route :Correct Answer Viability of the proposal, and excellent track record of business , Experience and expertise of promoters, benefit to the country Your Answer Viability of the proposal, and excellent track record of business , Experience and expertise of promoters, benefit to the country , Total Financial commitment in JV/WOS as per prescribed ceiling Multiple Choice Single Answer Question When was the first currency swap introduced in world market? Correct Answer 1970 Your Answer
1970
True/False Question
Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question Who can issue the Certificate of Inspection? Correct Answer Export Inspection Council , Person authorised by Importer. Your Answer
Export Inspection Council , Person authorised by Importer. , Reserve Bank of India
Match The Following Question
Correct Answer
Your Answer
Cancellation of contracts above USD 500000
ECD
FEDAI
Forward Purchase contract currency at premium
Presume earliest delivery Presume earliest delivery
Forward purchase contract currency at discount
Presume latest delivery
Presume latest delivery
Exchange margins
True/False Question
FEDAI
ECD
Both futures and options are traded on a public exchange.
Correct Answer False Your Answer
True
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
GBP 300 billion
Multiple Choice Single Answer Question A Bank quotes interest rate of 9.50/10.00 for six months dollar deposit, here the bid rate is :Correct Answer 9.50% P.A. Your Answer
9.50 divided by 6 =1.58% P.A.
True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer False Your Answer
True
Multiple Choice Multiple Answer Question How is the entry into any conuntry's money market or capital market is restricted? Correct Answer Because of different tax systems , Because of different credit standards Your Answer Because of different tax systems , Because of different credit standards , Because of protectionism True/False
Question
The American Dollar market comprises of the domestic segment of USD the offshore segment of USD. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question The major cost components of NIF are :Correct Answer Underwriters fees , Margins of notes Your Answer
Underwriters fees , Documentation charges , Issue registration fees
True/False Question
FRN's issued with ceiling on interest beyond which the issues is not required to pay interest is known as Mini-Max FRN Correct Answer True Your Answer
False
Multiple Choice Single Answer Question A weight list, a packing list used in international trade are which type of documents? Correct Answer Operational Documents Your Answer
Optional documents
Select The Blank Question The credit which does not constitute a legally binding undertaking between the bank and the beneficiary is ________. Correct Answer Revocable Credit Your Answer
Revocable Credit
Multiple Choice Multiple Answer Question Sterling Market is attractive for an international investor because Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Your Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds , Linking of issues to currency swaps Multiple Choice Single Answer Question European currency Unit Correct Answer Basket of Currencies of members of EMS
Your Answer
Basket of Currencies of members of EMS
True/False Question
At Least one principal Lender bank is essential for issue of the ADR or GDR. Correct Answer False Your Answer
True
True/False Question
In an already booked forward contract, a person may seek early delivery, extension in period, or cancellation. Correct Answer True Your Answer
True
Multiple Choice Single Answer Question A Run on gold gold by a country means Correct Answer Exchange of reserve currency in to gold Your Answer
Exchange of gold into Reserve Currency
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the bid rate for USD? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Single Answer Question The Direct Investment abroad through share swap arrangement under normal route is permitted in a :Correct Answer JV/WOS Your Answer
JV/WOS
Select The Blank Question FRNs are issued for a maturity period of ________ and are normally redeemed in one shot. Correct Answer 5-7 years Your Answer True/False
5-7 years
Question
Bid rate is bidders buying rate and offered rate is bidders selling rate. Correct Answer True Your Answer
True
True/False Question
Corporates are allowed to raise funds abroad up to $ 15 million as short term finance if they have EPCG license. Correct Answer True Your Answer
False
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer IMF, World Bank and local markets Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer
Euro Commercial Papers
Select The Blank Question Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer
OECD
Multiple Choice Multiple Answer Question For issuing a Documentary credit The applicant is required to provide to the issuing bank details about Correct Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents Your Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents , Authority who will issue the documents Multiple Choice Multiple Answer
Question
The crisis in global capital market in 2002-04 was due to
Correct Answer Collapse of Enron , Collapse of Argentina's currency board , The war against terrorism Your Answer Collapse of Enron , Collapse of Argentina's currency board , The war against terrorism Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Select The Blank Question "Flip-Flop', 'Mini-Max', 'Capped' 'Perpetual' are the various types of ________. Correct Answer Floating Rate Note (FRN) Your Answer
Floating Rate Note (FRN)
Select The Blank Question Combined Certificate of Origin and Value are required by ________. Correct Answer Commonwealth Countries Your Answer
Commonwealth Countries
Multiple Choice Single Answer Question Bank with lowest Bid for fees etc and which undertakes the responsibility of loan syndication is called :Correct Answer The lead bank- leadmanager- arranger Your Answer
The lead bank- leadmanager- arranger
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question Which functions does the Bill of Lading serve? Correct Answer It is a document of title to goods. , It is receipt of goods Your Answer It is a document of title to goods. , It is receipt of goods Multiple Choice Single Answer Question A Bank quotes interest rate of 9.50/10.00 for six months dollar deposit, here the bid rate is :Correct Answer 9.50% P.A. Your Answer 9.50% P.A.
Multiple Choice Single Answer Question What is Sovereign Risk? Correct Answer Risk of lending to the government of a country Your Answer Risk of lending to the government of a country Multiple Choice Single Answer Question How does ICC help poor countries? Correct Answer Attract Foreign Direct investments togeather with UNCTAD Your Answer Attract Foreign Direct investments togeather with UNCTAD Multiple Choice Multiple Answer Question As per BIS, recovery from the recent crisis in global capital market was mainly due to Correct Answer Rapid and appropriate policy response in US and other countries , Increase in Foreign Direct Investments , free flow of credit Your Answer Rapid and appropriate policy response in US and other countries , Increase in Foreign Direct Investments , free flow of credit True/False Question Out of 15 member countries in European Union 12 countries commiteed themselves for a single currency. Correct Answer False Your Answer True True/False Question In red clause credit some clauses are printed in Red ink. Correct Answer True Your Answer True True/False Question Transfer of funds for investment abroad is allowed freely. Correct Answer True Your Answer False Select The Blank Question EEFC account holder is allowed to have ________ facility. Correct Answer Cheque book and nomination Your Answer Credit card, safe custody, safe deposit locker without any fee Select The Blank Question Fixed interest rate Eurobond without the option to convert to equity is known as ________. Correct Answer Straight Debt Your Answer Interest rate swap True/False Question An Indian importing goods from USA pays dollars in India. Correct Answer False Your Answer True Match The Following Question Correct Answer Your Answer PP Form Export Declaration form Export Declaration form Health Certificate Fumigation certificate Export
Declaration form Certificate of Inspection As per importers requirement Export Declaration form Certifiate of Origin Export Promotion Council Export Declaration form Multiple Choice Multiple Answer Question For issuing a Documentary credit The applicant is required to provide to the issuing bank details about Correct Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents Your Answer The purchase-sales contract, the mode of payment, the tenor of payment , The track record of the buyer and seller Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given on behalf of a certain person to another person in different country , It is a stamped agreement and is not valid unless it is signed by the issuer True/False Question CFR = FOB plus freight paid by seller +insurance paid by seller. Correct Answer False Your Answer True Select The Blank Question Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer OPEC True/False Question Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer True Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your Answer Supplemental Reserve Policy Multiple Choice Multiple Answer Question What are the sources of raising funds for exports? Correct Answer Suppliers credit , Forfaiting Your Answer Suppliers credit , Forfaiting , Buyers credit , Foreign currency or Rupee finance
True/False Question Normally the forward contracts are booked for making huge profits.
Correct Answer False Your Answer False True/False Question Head office of ICC is in Paris because of its First President Eliance Clementel. Correct Answer True Your Answer False Select The Blank Question A ________ Bill of lading does not specify the terms and conditions of carriage. Correct Answer Short Form Your Answer Short Form Multiple Choice Single Answer Question What is the volume of the world's total speculative transactions? Correct Answer Roughly 90 % of the total turnover Your Answer 70% of the total turnover True/False Question Till August 1994 India was following the Indirect Methodof Rate quotation. Correct Answer False Your Answer False Select The Blank Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme. Correct Answer Overseas investment facility Your Answer Overseas investment facility Multiple Choice Single Answer Question Mr P has exported goods in May 2005 and is expecting payment of Euro 25000 by the last week of Sept 2005. Give details of the forward contract he can book :Correct Answer He can book a sale contract any time from May 2005 till Mid Sept 2005, for Euro 25000 or less, for maturity last week of Sept. Your Answer He can book a contract for Forward Purchase, any time from May 2005 till Mid Sept 2005, for Euro 25000 or less, for maturity last week of Sept. Select The Blank Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________. Correct Answer Shelf Registration Your Answer Shell Registration Multiple Choice Multiple Answer Question Which common details will be available in any bill of Lading? Correct Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment Your Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment , The name of the vessel , The date of transportation and contract of transportation Select The Blank Question Under the ________ standard the Country's Central Bank promised to buy back the currency at certain rate of Gold. Correct Answer Gold Your Answer Interest
Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer ADRs Select The Blank Question The type of trade where a country sells orange juice in return for cars is known as ________. Correct Answer Counter Trade Your Answer Non money trade Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment to EOUs in India for services rendered by them , Payment of Gifts of GBP 5000 per year per donor Multiple Choice Multiple Answer Question Under the liberalisation through FEMA, what can an AD offer to the clients, without the prior permission of RBI or Government? Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Your Answer Caps and collars, and forward rate agreements , Good and competitive exchange rates and cross currency rates Multiple Choice Multiple Answer Question Sterling Market is attractive for an international investor because Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Your Answer Choice of issuing medium term and long term bonds , Less controls and less formalities to be completed , Linking of issues to currency swaps Multiple Choice Single Answer Question Under which contracts the seller pays the import duty for the buyer? Correct Answer DDP Your Answer DDP True/False Question PP Form is required when exports are made to any country by post parcel on value payable basis. Correct Answer False Your Answer True Multiple Choice Multiple Answer Question What were the immediate causes of converting the group of 5 into group of 7 and convene their meeting in late 1985? Correct Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased Your Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased , The heads of G5 insisted to have a meeting , Failure of IMF to control the exchange rates
Multiple Choice Single Answer Question What are the powers of money changers? Correct Answer Purchase and sell foreign currency notes and travellers cheques Your Answer Purchase and sell foreign currency notes and travellers cheques, give import and export finance Multiple Choice Single Answer Question Who can open an EEFC account? Correct Answer Individuals , firms, companies, resident in India Your Answer Individuals , firms, companies, resident in India Multiple Choice Single Answer Question What is the role of ICC towards WTO? Correct Answer To provide world business recommendations to WTO Your Answer To further the cause of WTO Select The Blank Question Position in a currency is said to be ________, when sales equal purchases. Correct Answer Square Your Answer Awkward Select The Blank Question Hotels and Airline companies are allowed to receive payments in Indian rupees from foreign tourist without insisiting on ________. Correct Answer Encashment certificate Your Answer Encashment certificate Multiple Choice Multiple Answer Question Why is Bill of Exchange a Quasi Negotiable Instrument? Correct Answer It represents title to goods , It is issued under Sale of Goods act Your Answer It represents title to goods , It is issued under Transportation act , It is issued under Bill of exchange act Multiple Choice Single Answer Question Which details about forward contracts do the Exchange Controls verify ? Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000 Your Answer Details of all contracts booked and cancelled beyond a specified limit Multiple Choice Single Answer Question In the context of International economy,the period between 1920s and 1930s is known as Correct Answer Great Depression Your Answer Great Depression Multiple Choice Multiple Answer Question What do you understand by Commercial Risk? Correct Answer Protracted default by the buyer, Insolvency of the buyer Your Answer Protracted default by the buyer, Insolvency of the buyer
LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question
Tranche' is a managed issue of securities in smaller denominations. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them , Payment of Gifts of GBP 5000 per year per donor Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Select The Blank Question The creditworthiness of futures exchange is maintained through imposition of ________. Correct Answer Margin Your Answer
Penalty
Select The Blank Question After the second world war many countries adopted the route of ________ to give facelift to sagging economies. Correct Answer Devaluation of their currencies Your Answer True/False Question
Change of governments
FEDAI does not require RBI permission to frame and revise rules of business
Correct Answer False Your Answer
True
Select The Blank Question Position in a currency is said to be ________, when sales equal purchases. Correct Answer Square Your Answer
Deficit
Multiple Choice Multiple Answer Question Underwriters are more attracted to NIF issue because of :Correct Answer Lesser risks , Increased returns , Easy marketability features Your Answer
Lesser risks , Increased returns , Easy marketability features
True/False Question
Import finance is nomally available at rates of interest cheaper than domestic finance rates. Correct Answer False Your Answer
True
Multiple Choice Single Answer Question What is the Indian Govt's obligation of becoming member of IMF? Correct Answer Ensure orderly exchange arrangement, promote stable exchange rate Your Answer Introduce gold standard in exchange rate Multiple Choice Multiple Answer Question Export finance Correct Answer Preshipment credit , Post shipment credit , Duty Draw back Your Answer
Preshipment credit , Post shipment credit
Select The Blank Question ________ enables bankers to extend purchase, negotiation or discount of export bills. Correct Answer Post shipment credit guarantee Your Answer
Specific shipment policy
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Cost of evluation does not justify analysis
Country risk analysis
Cost of evluation does not Banks are ahead justify analysis
Stock market analysis
Banks are ahead
Factors' values
Weightages %
Factors' values
Drop the investment project
Select The Blank Question In mid 1992 ________ rejected the ratification of Maastricht treaty Correct Answer Denmark Your Answer
Austria
Multiple Choice Multiple Answer Question Name the services provided by 'Reuter 3000' in forex market:Correct Answer Quotation of forex rates, interest rates , Electronic broking by matching the rates Your Answer Quotation of forex rates, interest rates , Electronic broking by matching the rates , Demat securities Multiple Choice Multiple Answer Question What options does the merchant have while booking a forward contract? Correct Answer Delivery on a Fixed date, within six months , Delivery on a date between two days separated by a period of maximum one month Your Answer Delivery on a Fixed date, within six months , Delivery on a date between two days separated by a period of maximum one month Multiple Choice Single Answer Question What is the volume of the world's total speculative transactions? Correct Answer Roughly 90 % of the total turnover Your Answer
Roughly 90 % of the total turnover
True/False Question
ECGC offers isurance protection to Indian exporters againt payment risks. Correct Answer True Your Answer
True
True/False Question
CFR = FOB plus freight paid by seller + insurance paid by seller.
Correct Answer False Your Answer
False
Multiple Choice Multiple Answer Question Sterling Market is attractive for an international investor because Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Your Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Multiple Choice Multiple Answer Question In a documentary credit the word document means :Correct Answer Specified documents of title, transportation, insurance , Specified certificates, and other papers required as per the regulations in the buyers country Your Answer Specified documents of title, transportation, insurance Multiple Choice Single Answer Question What is the meaning of right to buy or sell the future contract? Correct Answer An Option Your Answer
A future
Select The Blank Question ECGC provides cover to an Indian contractor for construction work abroad under ________. Correct Answer Construction works policy Your Answer
Maturity Factoring
True/False Question
An Indian importing goods from USA pays dollars in India.
Correct Answer False Your Answer True/False Question
True
An Indian exporting goods to New York receives dollars in New York.
Correct Answer True Your Answer
True
Select The Blank Question A Dealer bought USD at 47.5000, in morning and the USD is quoted in the noon at 1 USD =48.2000/49.7000, then he has the opportunity for ________. Correct Answer Arbitrage Your Answer
Swap
Multiple Choice Single Answer Question The Direct Investment abroad through share swap arrangement under normal route is permitted in a :Correct Answer JV/WOS Your Answer
JV/WOS
Select The Blank Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________. Correct Answer Shelf Registration Your Answer
Shelf Registration
Multiple Choice Single Answer Question How many Countries participated in the third survey on Foreign Exchange, coordinated by BIS in 1992? Correct Answer 26 Your Answer
26
Multiple Choice Single Answer Question A Spot Transaction between Japanese Yen and Sterling carried out on Friday in Singapore, the settlement day will be Correct Answer Following Tuesday if it is a working day in all the three centers Your Answer
Following Thursday if it is a working day in all the three centers
Select The Blank Question Legalised invoice is also called ________ invoice. Correct Answer Visaed
Your Answer
Proforma
Multiple Choice Single Answer Question Who are the members of the Special committee on Indian Direct Investments abroad, for normal route? Correct Answer Representatives of Ministry of finance, Ministry of Economic affairs, Ministry of Commerce and RBI Your Answer Representatives of Ministry of finance, Ministry of Economic affairs, Ministry of Commerce and RBI Select The Blank Question For opening JV/WOS in Nepal, Bhutan, the ceiling for financial commitment per annum is ________. Correct Answer Rs. 350 crore Your Answer
Rs. 350 crore
Select The Blank Question The price at which a person may purchase or sell the underlying ________. Correct Answer Exercise or strike price Your Answer
Market price
True/False Question
Installment credit is issued for specific quantities of goods to be shipped every week or month. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question The participants in the Forex Markets are :Correct Answer Non banking entities wishing to exchange currencies, , Banks and their clients , Speculators, arbitragers Your Answer Non banking entities wishing to exchange currencies, , Banks and their clients , Speculators, arbitragers Multiple Choice Multiple Answer Question What were the primary objectives of the group of seven countries? Correct Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries Your Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries True/False
Question
Transfer of funds for investment abroad is allowed freely.
Correct Answer True Your Answer
False
Multiple Choice Single Answer Question In which currency can the EEFC account be opened? Correct Answer Any Convertible currency Your Answer
Any Convertible currency
Multiple Choice Single Answer Question In International trade, Advance payment means :Correct Answer Providing up front cash Your Answer
Providing up front cash
Multiple Choice Single Answer Question Who books an option forward contract? Correct Answer Party who is not definite about crystallisation of delivery date Your Answer
Party who is speculator
Multiple Choice Single Answer Question What is a "Received for shipment" bill of lading ? Correct Answer It is not considered by the banks as a good security for financing. Your Answer
It is considered a very safe document
Multiple Choice Multiple Answer Question What are margins, with reference to futures market? Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts , Given by buyer or seller as commission Multiple Choice Single Answer Question How does ICC access Govt and influence Governmental decisions? Correct Answer Through national committees
Your Answer
Through national committees
Match The Following Question
Correct Answer
Your Answer
Investment under Automatic route
Form ODA
Form ODA
Proposal under non automatic route
RBI
Form NAR
Proposal under Normal route
Special Committee
Special Committee
Investment by partnerships not in core activity
form ODI
form ODI
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an unconditional undertaking True/False Question
Services of a Paying bank are taken when currencies of exporters country or the importers country is not involved in the transaction. Correct Answer False Your Answer
True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single Answer Question Fixed, Floating or Limited flexibility are used in the context of Correct Answer Exchange Rates Your Answer
Exchange Rates
Select The Blank Question Exim acts as ________ for Government, RBI and IDBI . Correct Answer An agent Your Answer
Authorised dealer
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade Your Answer
Public Limited companies without international presence
Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer
Anticipatory Credit
Multiple Choice Multiple Answer Question Which of these are considered as miscellaneous documents? Correct Answer Packing list , Weight certificate Your Answer
Packing list , Insurance cover note , PP Form
Select The Blank Question In ________ transaction the delivery is postponed from the agreed date. Correct Answer Rollover Your Answer True/False Question
Forward
Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations
Correct Answer True Your Answer
False
Multiple Choice Multiple Answer Question World Bank gives loans for Correct Answer Structural Adjustments , Infrastructure projects , BOP problems Your Answer
Structural Adjustments , BOP problems , Long term Working capital
Select The Blank Question The credit which does not constitute a legally binding undertaking between the bank and the beneficiary is ________. Correct Answer Revocable Credit Your Answer
Transferable credit
Multiple Choice Multiple Answer Question What non funded facilities are granted by Export Import Bank of India? Correct Answer Guarantee for Bid bond, execution of export project, for borrowings abroad, for retention of money , Advance payment Guarantee, performance guarantee Your Answer Advance payment Guarantee, performance guarantee , Letter of credits True/False Question
There is no difference between CIP and CIF contracts except the mode of transportation. Correct Answer True Your Answer
False
Multiple Choice Single Answer Question What is a coupon swap? Correct Answer Swap contract exchange of fixed rate payment system for a floating rate system Your Answer Exchange of fixed deposits to equity True/False Question
An Indian exporting goods to New York receives dollars in New York. Correct Answer True Your Answer
True
True/False Question
The credit rating of World Bank is high in the world Capital market because it operates at the debt equity ratio of 1:2 Correct Answer False Your Answer
True
Match The Following Question
Correct Answer
Certifiate of Origin
Export Promotion Council Risk covering Document
PP Form
Export Declaration form
Export Declaration form
Health Certificate
Fumigation certificate
Finance document
Certificate of Inspection
As per importers requirement
As per importers requirement
Your Answer
True/ False Question
Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True Your Answer
True
Multiple Choice Single Answer Question Who can open an EEFC account? Correct Answer Individuals , firms, companies, resident in India Your Answer
Individuals , firms, companies, resident in India
Multiple Choice Single Answer Question The 'On Board' bill of lading means bill of lading evidencing that :Correct Answer The goods are put on board a ship for shipment Your Answer
A bill of lading evidencing terms and conditions of carriage printed on it
Match The Following Question
Correct Answer
Your Answer
Netherlands
Guilder
Franc
Germany
Mark
Peseta
Ireland
Punt
Dollar
Luxemberg
Franc
Guilder
Multiple Choice Multiple Answer Question The World Bank Group Consists of Correct Answer International Development Association , International finance Corporation , Multinational Investment Guarantee Agency Your Answer Multinational Investment Guarantee Agency , Multinational Insurance Guarantee Agency Select The Blank Question Any company involved in foreign exchange transactions is exposed to ________ risk. Correct Answer Currency Your Answer
Currency
True/False Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True Your Answer
False
True/False Question
Floating rate notes are traded in secondary market also.
Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value Multiple Choice Multiple Answer Question The investor is in the money when :Correct Answer The exercise price is below the spot price for a call option , The exercise price is above the spot price for a put option Your Answer The exercise price is below the spot price for a call option , The exercise price is above the spot price for a put option , The
exercise price is above the spot price for a call option True/False Question
The working of the IBRD and IMF in recent has blurred the difference between the two Correct Answer True Your Answer
True
Select The Blank Question For importing goods in India RBI insists on ________ value. Correct Answer CIF Your Answer
FOB
Select The Blank Question Position in a currency is said to be ________, when sales equal purchases. Correct Answer Square Your Answer
Surplus
Select The Blank Question FRNs are issued for a maturity period of ________ and are normally redeemed in one shot. Correct Answer 5-7 years Your Answer
Up to 1 year
Multiple Choice Multiple Answer Question What are the functions of International Finance Corporation? Correct Answer Help private enterprise by financing projects , Provide technical assistance to private enterprise Your Answer Help private enterprise by financing projects , Provide technical assistance to private enterprise Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer Sharing of risk of non payment by supplier Your Answer
Sharing risk of Non payment by the Syndicate of Banks giving loans
Select The Blank
Question
A Documentary credit issued on the strength of another documentary credit is known as ________. Correct Answer Back to Back credit Your Answer
Green clause credit
Multiple Choice Single Answer Question Value date means the date on which :Correct Answer Delivery of both the currencies will be made Your Answer
Value of currency will be paid in terms of goods or commodities
True/False Question
FEDAI does not require RBI permission to frame and revise rules of business Correct Answer False Your Answer
True
Select The Blank Question The major industrial power whose economy was not affected after the II world war was ________. Correct Answer USA Your Answer
UK
Multiple Choice Multiple Answer Question Major investors in NIF are :Correct Answer Commercial Banks , Non banking Finance companies , Insurance Companies Your Answer Non banking Finance companies , Insurance Companies , Individual investors abroad Multiple Choice Multiple Answer Question The crisis in global capital market in 2002-04 was due to Correct Answer Collapse of Enron , Collapse of Argentina's currency board , The war against terrorism Your Answer Collapse of Argentina's currency board , The war against terrorism Multiple Choice Multiple Answer Question Criteria for investment abroad under automatic route :Correct Answer Activity for investment is core activity of Indian Company. , Total Financial commitment in JV/WOS as per prescribed ceiling
Your Answer
Activity for investment is core activity of Indian Company. , Credit Rating of the CO to be A++
Multiple Choice Multiple Answer Question How does a company use swap to restructure debt, in its balance sheet? Correct Answer By resorting to floating rate from fixed rate , By resorting to fixed rate from floating rate Your Answer By resorting to floating rate from fixed rate , By resorting to fixed rate from floating rate , Prepayment of existing debts Select The Blank Question ________ is the price at which the market maker is prepared to borrow the money. Correct Answer Bid rate Your Answer
Selling price
Multiple Choice Single Answer Question Which type of Convertibility of Rupee launched in March 1992 ? Correct Answer Limited convertibility Your Answer
Limited convertibility
Multiple Choice Multiple Answer Question A Forward purchase contract was booked with an authorised dealer and subsequently cancelled .It :Correct Answer Can be booked again with another dealer , Can be booked again with the same dealer Your Answer Can be booked again with another dealer , Can be booked only for un booked portion of the contract. Multiple Choice Single Answer Question Name the members of Exchange Banks association :Correct Answer Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar, Your Answer
Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar,
Multiple Choice Single Answer Question If a dealer of securities is quoting rate as 200-250 then the rate 200 signifies which rate with reference to him? Correct Answer Bid rate Your Answer
Bid rate
Multiple Choice Single Answer
Question
What do you call a 'decreasing principal swap'?
Correct Answer Amortizing swap Your Answer
Amortizing swap
Multiple Choice Single Answer Question When does a bank have an absolute advantage, in respect of interest rate swaps? Correct Answer When it has advantage under fixed interest system as well as floating interest rate system Your Answer When it has advantage under fixed interest system as well as floating interest rate system Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Your Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers
Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Your Answer
Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates
Select The Blank Question ________ is the agency of ICC which deals with the maritime crime. Correct Answer
International Maritime Bureau
Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer
Buffer Stock Facility
Your Answer
Buffer Stock Fa cility
True/False Question Correct Answer
Cross currency forward contract is not meaningful if original contract is in Rupees to USD True
Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer Your Answer
The exercise or strike price, the amount , The expiration date and time, the method of payment The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option
Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer
US Dollar
Your Answer
US Dollar
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify Cost of evluation does not justify analysis analysis
Stock market analysis
Banks are ahead
Factors' values
1
Weightages %
Factors' values
100% of total
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Your Answer
Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer
Monday
Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer
Other managed Floating
Your Answer
Pegged to Single currency
Match The Following Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity is delivered
Last date of exercising option
Note issuance facility
Euronotes
Euronotes
Bearer security issued in currency other than that of the country of issue
Eurobonds
Eurobonds
Margin on future
Peformance bond or security deposit
Peformance bond or security deposit
True/False Question Correct Answer
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. False
Your Answer
False
True/False Question Correct Answer
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. True
Your Answer
True
Multiple Choice Multiple Answer
2
Question
What are margins, with reference to futures market?
Correct Answer
Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts
Your Answer
Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer
USD 1 trillion
Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer Your Answer
By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Which enables the investor to market the same in the secondary market
Multiple Choice Single Answer Question What was the official foreign currency reserve of the grou p of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer
Preshipment credit beyond six months for construction and turnkey projects abroad
Your Answer
Preshipment credit up to six months for construction and turnkey projects abroad
Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily. Correct Answer Economies Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions?
3
Correct Answer
US Dollar
Your Answer
US Dollar
Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer
Control by Government'
Your Answer
Recurrence
Select The Blank Question Th e Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer
Sharing of risk of non payment by supplier
Your Answer
Sharing risk of Non payment by the Syndicate of Banks giving loans
True/False Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer Your Answer
It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Your Answer
True/False Question
Payment Payment Payment Payment
of to of to
hotel bills abroad, payment for expenses on Heart operation abroad , EOUs in India for services rendered by them hotel bills abroad, payment for expenses on Heart operation abroad , EOUs in India for services rendered by them
Funding Options in domestic yen market are Futures, FRAs, Call and put options.
4
Correct Answer
True
Your Answer
True
True/False Question Correct Answer
There is no difference between CIP and CIF contracts except the mode of transportation. True
Your Answer
True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer
Companies which have international trade
Your Answer
Companies which have international trade
Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Primary activity
Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer
An Irrevocable credit
Your Answer
An Irrevocable credit
True/False Question Correct Answer
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. False
Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer
Preshipment credit , Post shipment credit , Duty Draw back
Your Answer
Preshipment credit , Post shipment credit , Buyers credit
5
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer
Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer
Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value
Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Your Answer
Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital ma rket Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Your Answer
Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Advertisement which lists the managers, underwriters , , List of Providers of recently floated issue
Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer
Buy when you are having short position
Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer? Correct Answer Your Answer
He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies
Select The Blank
6
Question
Forward margin makes a currency cheaper then the currency is at ________.
Correct Answer
Discount
Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer
Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Your Answer
Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer
Prices of capital market instruments change and are expected to change drastically
Your Answer
Prices of capital market instruments change and are expected to change drastically
True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer
False
Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Your Answer
Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been bla ck listed
1 5 – 10 13 – 14 15 – 17 18 – 19 20 – 23 24 – 27 31 – 35 36 – 39 40 – 41 43 – 46 47 – 49 50 – 53 55 – 57 61 – 66 67 – 69 70 – 71 73 – 74 75 -76 79 – 83 84 – 88
7
89 - 92 95 – 99 100 – 102 105 – 106 109 – 114 117 – 123 124 – 127 128 – 129 131 – 137 138 – 141 143- 147 148 – 152 155 – 157 158 – 161 163 169 174 179 183 189 191
– 166 – 173 – 177 – 180 – 183 – 190
195 199 203 – 204 207- 212 215 – 217 218 -219 220 – 221
Chapter – 1 – Introduction to international capital markets
1 Ero currency market ; Domestic market ; US, Japan Switzerland ; uk, australia canada ; european conters in ECU ; Euro ; Asian doller market ; forex marker 1 SDR ; ECU ; US dollar ; German ; Swiss ; Japanees ; France ; Canada ; Australia; 2 Chaper - 2 - International financial Markets - The U.S.Dollar Market ; pricing ; federal reservice board; curency ; central bank of US ; 5 The Japanese Yen Market ; Mof; Long Term Prime Rate ; 1970 japanese 6 The Sterling Market ; 20th 19th century 1979 ; OECD Organization for economic co-operation & development EMS Exchange rate Mechanism; FRN ; Bulldog; 7 the EURO Market has been discussed in the nex chapter Recent development in international financial markets ; septer 11 enron 7 LtCN (Long term capital Management Brazil china and mexico; 8 1990 ; 1980 ; severe tests financial system; securitization forces banks ; attractive to browwerw; legal issues flexibility ; financial market development segement of ; 9 swaps cash flow ; roject related; gain access to international ; marketability ; new financing techniques; 10 Chapter – 3 – International Monetary and Financial System 13 1945 ; 1944 ; intenrational world Bank for reconstruciton and development; second world war was european ; IMF International
13
8
Monetary Fund; Gold standard first world war The country's Central Bank agreed to buy back their currency at a certain rate of gold; 13 melting down of gold was freely allowed 13 There was unrestricted movement of gold (I.e. import and / export 14 The total money supply in the country was determined by the quantum of gold reserves in the country 14 1870 ; 1914 ; 1821 ; 1834 ; 1870 ; European countries gold standard in 1933 ; 1930 International Monetary Co-operation ; IBRD ; IMF ; 14 popularly known as world bank IMF ; the international monetary fund 1945 ; 1971 ; 25 years ; aims 15 SDR ((special drawing rights ) 25% 1960 ; 1963 ; Gross domestic product; 5 years ; SDR 146 bn to SDR 212 ; 45% ; 1998 ; Two parts 16 Funding Facilities ; Regular Facilities ; Special facilities ; restore tranche credit tranche ; compensatory and contingency financing facility (CCFF) ; 16 Extended arrangement (Extended Fund Facility EEF) ; Buffer stock Financing Facility ; 16 Standard Arrangement (Enlarged Arrears Policy ) ; Supplemental Reserve Policy (Supplemental Reserve Policy (SRP 17 Reserve Tranche ; Credit Tranches ; Stand - By Arrangement 17 Extended arrangement or extended fund facilities (EFF) 18 Special Facilities ; CCFF ; Buffer Stock Financing Facility ; BSFF ; Supplemental Resource Facility (SRF) ; 1997 18 Enhance Structural Adjustment Facility (ESAF) ; The fixed exchange rate system US dollars 35 ounce of gold 19 Problem faced by the fixed exchange rate system ; 1960 ; value apprehension ; delay in adjustment 20 failure of fixed rate system ; the european monetary system (EMS) European Community 20 Currency Snake ; 1973 ; EMS EC ECU European Currency Unit ; SDR ; ERM ; DM ; matrix german bundesbank 21 EM ; PST ; ERM ; Economic and monetary Union ; Top of Form LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question Correct Answer
Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations True
Your Answer
True
True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer
False
Your Answer
False
Select The Blank Question The rate of interest on rupee finance for exports is not exceeding ________ less than PLR. Correct Answer 0.025
9
Your Answer
50 basis points over LIBOR
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer Your Answer
The exercise or strike price, the amount , The expiration date and time, the method of payment The exercise or strike price, the amount , The expiration date and time, the method of payment
Multiple Choice Single Answer Question In the syndicated loan arrangement the borrower has to execute :Correct Answer
Single Principal loan agreement
Your Answer
Single Principal loan agreement
True/False Question
At Least one principal Lender bank is essential for issue of the ADR or GDR.
Correct Answer
False
Your Answer
True
Multiple Choice Single Answer Question US financial system is the freest system because Correct Answer
Institutions can introduce new products and instuments at the price of their choice.
Your Answer
Institutions can introduce new products and instuments at the price of their choice.
Multiple Choice Single Answer Question In a coupon swap who is called the buyer? Correct Answer
One who pays the fixed rate of interest
Your Answer
One who pays the fixed rate of interest
True/False Question
Till August 1994 India was following the Indirect Methodof Rate quotation.
Correct Answer
False
Your Answer
False
Select The Blank Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme. Correct Answer Overseas investment facility Your Answer
Overseas investment facility
Multiple Choice Single Answer
10
Question Correct Answer
Under the automatic route of Direct Investment Abroad, what is the restriction on market purchases? 50% of the net worth of the investing company
Your Answer
50% of the net worth of the investing company
Multiple Choice Single Answer Question What are the powers of money changers? Correct Answer
Purchase and sell foreign currency notes and travellers cheques
Your Answer
Purchase and sell foreign currency notes and travellers cheques and also Give export finance
Select The Blank Question Any company involved in foreign exchange transactions is exposed to ________ risk. Correct Answer
Currency
Your Answer
Currency
Multiple Choice Multiple Answer Question What are the features of Settlement price ? Correct Answer Your Answer
Price established to determine the Price established to determine the
by the clearing house at the end of each trading session , It is used net gain, loss, margin call and next days price limits by the clearing house at the end of each trading session , It is used net gain, loss, margin call and next days price limits
Multiple Choice Multiple Answer Question What are the activities of ICC? Correct Answer
Aribtration and dispute resolving , Canvass for open trade combat commercial crime
Your Answer
Aribtration and dispute resolving , Canvass for open trade combat commercial crime , Increased Govt regulation of Business
True/False Question
Cause of increase in cost of public issues Underwriting fees , selling commission
Correct Answer
True
Your Answer
False
Select The Blank Question The currency swaps used ________. Correct Answer
To lower the risk of currency exposure
Your Answer
To lower the risk of currency exposure
True/False Question
The Option period in the forward contract is at the option of the Banker, hence the bank has to be very conservative in quoting rates.
11
Correct Answer
False
Your Answer
True
Multiple Choice Multiple Answer Question Which factors affect the exchange rates in short time period? Correct Answer
Demand and supply, interest rates, inflation, , Sentiment, Speculation
Your Answer
Demand and supply, interest rates, inflation, , Sentiment, Speculation , GDP,Balance of trade and payment,Unemployment
Match The Following Question
Correct Answer
Your Answer
Departure
EXW
EXW
Main carriage paid
CFR
CFR
Main carriage unpaid
FAS
FAS
Arrival
DES
DES
Multiple Choice Multiple Answer Question Sterling Market is attractive for an international investor because Correct Answer Your Answer
True/False Question
Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds , Linking of issues to currency swaps
In red clause credit some clauses are printed in Red ink.
Correct Answer
True
Your Answer
False
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Your Answer
Payment Payment Payment Payment
of to of to
hotel bills abroad, payment for expenses on Heart operation abroad , EOUs in India for services rendered by them hotel bills abroad, payment for expenses on Heart operation abroad , EOUs in India for services rendered by them
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the bid rate for USD? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
12
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Multiple Answer Question Criteria for investment abroad under automatic route :Correct Answer Your Answer
Activity for investment is core activity of Indian Company. , Total Financial commitment in JV/WOS as per prescribed ceiling Activity for investment is core activity of Indian Company. , Total Financial commitment in JV/WOS as per prescribed ceiling
Multiple Choice Multiple Answer Question Who can issue the Certificate of Inspection? Correct Answer
Export Inspection Council , Person authorised by Importer.
Your Answer
Export Inspection Council , Person authorised by Importer.
Multiple Choice Single Answer Question Large number of exporters from which country are enjoying the privilege of receiving up front cash from importers in Russia? Correct Answer United Kingdom Your Answer
True/False Question
United Kingdom
Correct Answer
In developed markets, speculators play important role in determining the trend of currency rates. True
Your Answer
True
Select The Blank Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________. Correct Answer Shelf Registration Your Answer
Shelf Registration
Select The Blank Question In Overseas market the forward rate is generally quoted on the basis of ________. Correct Answer
Fixed date
Your Answer
Calendar month
Select The Blank Question Forward Margin makes a currency costlier then the currency is at ________.
13
Correct Answer
Premium
Your Answer
Discount
Multiple Choice Multiple Answer Question These are the parties to the documentary credit :Correct Answer
Negotiating Bank, advising bank , Reimbursing bank, Confirming bank
Your Answer
Negotiating Bank, advising bank , Reimbursing bank, Confirming bank
Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Your Answer
Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Single Answer Question Fixed, Floating or Limited flexibility are used in the context of Correct Answer
Exchange Rates
Your Answer
Exchange Rates
Select The Blank Question In mid 1992 ________ rejected the ratification of Maastricht treaty Correct Answer
Denmark
Your Answer
UK
Multiple Choice Multiple Answer Question Under the liberalisation through FEMA, what can an AD offer to the clients, without the prior permission of RBI or Government? Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Your Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Multiple Choice Single Answer Question To whom is an AD required to report the cancellation of forward contracts? Correct Answer
No one at all.
Your Answer
To Reserve Bank of India, fortnightly
Select The Blank Question ECGC provides cover to an Indian contractor for construction work abroad under ________. Correct Answer Construction works policy
14
Your Answer
True/False Question
Export Performance Guarantee
Correct Answer
The Negotiating bank examines the documents submitted by the seller and makes payment if they comply the terms and conditions of the LC. True
Your Answer
True
Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Multiple Answer Question What are the sources of raising funds for exports? Correct Answer
Suppliers credit , Forfaiting
Your Answer
Suppliers credit , Forfaiting
Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer
Discount
Your Answer
Discount
Multiple Choice Single Answer Question Name the common forex derivatives :Correct Answer
Options, futures
Your Answer
Options, futures
True/False Question
Country risk analysis is a futile exercise in the background of cost of analysis.
Correct Answer
True
Your Answer
False
Select The Blank Question Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer
OECD
15
Match The Following Question
Correct Answer
Your Answer
Issues linked with LIBOR,LIBID,LIMEAN
FRNs
FRNs
Issue of bonds without fixed rate of interest, linked to short term interest rate in the global market
FloatingRate Note
FloatingRate Note
Issue of loans internationally,through arranger, underwriter,co manager, for a large amount for sharing risk of lending
Syndicated Loans
Syndicated Loans
Equity issues in the foreign markets either as direct investments or portfolio investments.
American or Global Depository Receipts
American or Global Depository Receipts
Bottom of Form
16
Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Your Answer
Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates
Select The Blank Question ________ is the agency of ICC which deals with the maritime crime. Correct Answer
International Maritime Bureau
Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer
Buffer Stock Facility
Your Answer
Buffer Stock Facility
True/False Question Correct Answer
Cross currency forward contract is not meaningful if original contract is in Rupees to USD True
Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer Your Answer
The exercise or strike price, the amount , The expiration date and time, the method of payment The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option
Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer
US Dollar
Your Answer
US Dollar
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Factors' values
1
Weightages %
Factors' values
100% of total
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Your Answer
Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer
Monday
Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer
Other managed Floating
Your Answer
Pegged to Single currency
Match The Following Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity is delivered
Last date of exercising option
Note issuance facility
Euronotes
Euronotes
Bearer security issued in currency Eurobonds other than that of the country of issue
Eurobonds
Margin on future
Peformance bond or security deposit
True/False Question
Peformance bond or security deposit
Correct Answer
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. False
Your Answer
False
True/False Question Correct Answer
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. True
Your Answer
True
Multiple Choice Multiple Answer
2
Question
What are margins, with reference to futures market?
Correct Answer
Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts
Your Answer
Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer
USD 1 trillion
Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer Your Answer
By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Which enables the investor to market the same in the secondary market
Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer
Preshipment credit beyond six months for construction and turnkey projects abroad
Your Answer
Preshipment credit up to six months for construction and turnkey projects abroad
Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily. Correct Answer Economies Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer
US Dollar
3
Your Answer
US Dollar
Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer
Control by Government'
Your Answer
Recurrence
Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer
Sharing of risk of non payment by supplier
Your Answer
Sharing risk of Non payment by the Syndicate of Banks giving loans
True/False Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer Your Answer
It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Your Answer
True/False Question
Payment Payment Payment Payment
of to of to
hotel bills abroad, payment for expenses on Heart operation abroad , EOUs in India for services rendered by them hotel bills abroad, payment for expenses on Heart operation abroad , EOUs in India for services rendered by them
Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer
True
Your Answer
True
4
True/False Question Correct Answer
There is no difference between CIP and CIF contracts except the mode of transportation. True
Your Answer
True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer
Companies which have international trade
Your Answer
Companies which have international trade
Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Primary activity
Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer
An Irrevocable credit
Your Answer
An Irrevocable credit
True/False Question Correct Answer
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. False
Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer
Preshipment credit , Post shipment credit , Duty Draw back
Your Answer
Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand
5
Correct Answer
Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer
Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value
Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Your Answer
Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Your Answer
Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue
Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer
Buy when you are having short position
Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer? Correct Answer Your Answer
He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies
Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer
Discount
6
Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer
Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Your Answer
Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer
Prices of capital market instruments change and are expected to change drastically
Your Answer
Prices of capital market instruments change and are expected to change drastically
True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer
False
Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Your Answer
Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed
Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Your Answer True/False Question
Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue
Correct Answer
Out of 15 member countries in European Union 12 countries commiteed themselves for a single currency. False
Your Answer
False
True/False Question Correct Answer
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. False
Your Answer
False
Select The Blank
7
Question
A Credit can be a confirmed credit only if it is also ________.
Correct Answer
An Irrevocable credit
Your Answer
An Irrevocable credit
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Banks are ahead
Weightages %
Factors' values
Factors' values
Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Multiple Choice Single Answer Question What is the meaning of a country risk? Correct Answer Your Answer
Risk of events in a particular country which may cause loss to a person dealing with that country Risk of events in a particular country which may cause loss to a person dealing with that country
Multiple Choice Multiple Answer Question Which common details will be available in any bill of Lading? Correct Answer Your Answer
Names of consigner, consignee , The port of loading and unloading, contract of shipment Names of consigner, consignee , The port of loading and unloading, contract of shipment
Multiple Choice Single Answer Question What help does EXIM Bank provide under the scheme 'Direct Financial assistance to exporters'? Correct Answer Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer Your Answer Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer Match The Following Question
Correct Answer
Your Answer
PP Form
Export Declaration form
Export Declaration form
8
Health Certificate
Fumigation certificate
Fumigation certificate
Certificate of Inspection
As per importers requirement
As per importers requirement
Certifiate of Origin
Export Promotion Council
Export Promotion Council
Select The Blank Question Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer
OECD
Multiple Choice Single Answer Question How many INCOTERMS are there in "Departure" Group? Correct Answer
One
Your Answer
Two
Multiple Choice Single Answer Question What is a bill of lading? Correct Answer
Transport document representing movement of goods by water.
Your Answer
Transport document representing movement of goods by water.
True/False Question Correct Answer
The American Dollar market comprises of the domestic segment of USD the offshore segment of USD. True
Your Answer
True
Select The Blank Question The creditworthiness of the futures seller and the futures buyer is ________ because of the presence of the Futures exchange. Correct Answer Irrelevant Your Answer
Irrelevant
Multiple Choice Single Answer Question What was the collective assessment of International financial market about the country risk of many cnuntries in the last decade? Correct Answer Whatever it was, was disastrously wrong. Your Answer
Whatever it was, was disastrously wrong.
Multiple Choice Multiple Answer Question How is the entry into any conuntry's money market or capital market is restricted?
9
Correct Answer
Because of different tax systems , Because of different credit standards
Your Answer
Because of different tax systems , Because of different credit standards
True/False Question
Till August 1994 India was following the Indirect Methodof Rate quotation.
Correct Answer
False
Your Answer
True
Select The Blank Question In Indian interbank market forward rates are generally quoted on the basis of ________. Correct Answer Calendar month Your Answer
Calendar month
Select The Blank Question Rupee was liberalised on ________ account in 1993, and on current account in 1994. Correct Answer
Trade
Your Answer
Trade
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer
Other managed Floating
Your Answer
Other managed Floating
Multiple Choice Multiple Answer Question Which of these are considered as miscellaneous documents? Correct Answer
Packing list , Weight certificate
Your Answer
Packing list , Weight certificate
True/False Question
Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer
True
Your Answer
True
Select The Blank Question ECGC provides cover to an Indian contractor for construction work abroad under ________. Correct Answer Construction works policy Your Answer
Construction works policy
10
Multiple Choice Single Answer Question Equity can be raised internationallly by a company through :Correct Answer
Fund raising, underwriting, hedging , arbitration operations
Your Answer
Fund raising, underwriting, hedging , arbitration operations
Multiple Choice Single Answer Question How many Countries participated in the third survey on Foreign Exchange, coordinated by BIS in 1992? Correct Answer 26 Your Answer
True/False Question
26
In red clause credit some clauses are printed in Red ink.
Correct Answer
True
Your Answer
True
True/False Question
Prior approval of RBI is needed for payment of all imports.
Correct Answer
False
Your Answer
True
Multiple Choice Multiple Answer Question The factors which affect the performance of an option are:Correct Answer
Underlying asset price , Time before expiration, rate of interest
Your Answer
Underlying asset price , Time before expiration, rate of interest
Multiple Choice Single Answer Question What is the immediate cause for the growth of futures and options in the last two decades? Correct Answer Increase in volatile trading conditions Your Answer
Management of external risk
Select The Blank Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme. Correct Answer Overseas investment facility Your Answer
Overseas investment facility
Select The Blank Question To make the export more competitive and remunerative, the Indian Govt extends ________ facility.
11
Correct Answer
Cash Incentives
Your Answer
Advance against cash incentives
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Your Answer
Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent
Multiple Choice Multiple Answer Question External Commercial Debt market :Correct Answer
Prevails in Domestic market of foreign country , Prevails in offshore markets
Your Answer
Prevails in Domestic market of foreign country , Prevails in offshore markets
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer
Companies which have international trade
Your Answer
Companies which have international trade
Multiple Choice Multiple Answer Question What do you understand by 'Foreign Exchange Risk'? Correct Answer Your Answer
The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows , Certainty of an event which would happen in favour of the importer/ exporter
Multiple Choice Single Answer Question For a spot transaction carried out on Tuesday, where both centers have holiday on Wednesday, currencies will be exchanged on :Correct Answer Thursday if it is a working day at both the centers Your Answer
Friday
Multiple Choice Single Answer Question Which details about forward contracts do the Exchange Controls verify ? Correct Answer
Particulars of cancellation of forward cover for the equivalent of USD 500,000
Your Answer
Particulars of cancellation of forward cover for the equivalent of USD 500,000
True/False Question
In the forward rate quotations between two currencies, when one currency is at discount the other currency is at premium.
12
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer
Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer
Which are convertible , Which have liquidity confirmed in Euro market operations
Select The Blank Question A Bill of exchange payable 45 days from date of shipment, is a means of ________ from seller to the buyer. Correct Answer Credit Your Answer
Credit
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer
Preshipment credit beyond six months for construction and turnkey projects abroad
Your Answer
Preshipment credit beyond six months for construction and turnkey projects abroad
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Your Answer
True/False Question
Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Correct Answer
Import finance is nomally available at rates of interest cheaper than domestic finance rates. False
Your Answer
False
Multiple Choice Multiple Answer Question Major investors in NIF are :Correct Answer
Commercial Banks , Non banking Finance companies , Insurance Companies
Your Answer
Commercial Banks , Non banking Finance companies
Select The Blank Question In mid 1992 ________ rejected the ratification of Maastricht treaty Correct Answer
Denmark
Your Answer
Denmark
13
True/False Question Correct Answer
Indian companies are now allowed to freely invest abroad up to $1.5 million, raised through GDE or EEFC without prior permission from RBI. False
Your Answer
True
Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Your Answer
Select The Blank Question
Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates
________ is the agency of ICC which deals with the maritime crime.
Correct Answer
International Maritime Bureau
Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer
Buffer Stock Facility
Your Answer
Buffer Stock Facility
True/False Question Correct Answer
Cross currency forward contract is not meaningful if original contract is in Rupees to USD True
Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer Your Answer
The exercise or strike price, the amount , The expiration date and time, the method of payment The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option
Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer
US Dollar
Your Answer
US Dollar
Match The Following
14
Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Factors' values
Weightages %
Factors' values
100% of total
Select The Blank Question Correct Answer Your Answer
Global capital market can be understood from the study of ________. Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer
Monday
Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer
Other managed Floating
Your Answer
Pegged to Single currency
Match The Following Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity is delivered
Last date of exercising option
Note issuance facility
Euronotes
Euronotes
Bearer security issued in currency Eurobonds other than that of the country of issue
Eurobonds
Margin on future
Peformance bond or security deposit
True/False Question
Peformance bond or security deposit
Correct Answer
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. False
Your Answer
False
15
True/False Question Correct Answer
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. True
Your Answer
True
Multiple Choice Multiple Answer Question What are margins, with reference to futures market? Correct Answer Your Answer
Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts
Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer
USD 1 trillion
Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer Your Answer
By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Which enables the investor to market the same in the secondary market
Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Your Answer
Select The Blank Question
Preshipment credit beyond six months for construction and turnkey projects abroad Preshipment credit up to six months for construction and turnkey projects abroad
Correct Answer
Over the years ________has been the most widely accepted currency in international capital market. American Dollar
Your Answer
American Dollar
Select The Blank Question
As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily.
16
Correct Answer
Economies
Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer
US Dollar
Your Answer
US Dollar
Select The Blank Question
________ is the acid test for events to be included in country risk.
Correct Answer
Control by Government'
Your Answer
Recurrence
Select The Blank Question Correct Answer
The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Brussels
Your Answer
Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer
Sharing of risk of non payment by supplier
Your Answer
Sharing risk of Non payment by the Syndicate of Banks giving loans
True/False Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer
Your Answer
It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer
Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them
17
Your Answer
True/False Question
Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them
Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer
True
Your Answer
True
True/False Question Correct Answer
There is no difference between CIP and CIF contracts except the mode of transportation. True
Your Answer
True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer
Companies which have international trade
Your Answer
Companies which have international trade
Select The Blank Question Correct Answer
When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Core activity
Your Answer
Primary activity
Select The Blank Question
A Credit can be a confirmed credit only if it is also ________.
Correct Answer
An Irrevocable credit
Your Answer
An Irrevocable credit
True/False Question Correct Answer
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. False
Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
18
Multiple Choice Multiple Answer Question Export finance Correct Answer
Preshipment credit , Post shipment credit , Duty Draw back
Your Answer
Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer
Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer
Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value
Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Your Answer
Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Your Answer
Select The Blank Question
Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue
Correct Answer
Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Euro Commercial Papers
Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer
Buy when you are having short position
Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer?
19
Correct Answer Your Answer
Select The Blank Question
He gets of rates He gets of rates
the flexibility to exposure , He is exposed to additional risk of movement between 3 currencies the flexibility to exposure , He is exposed to additional risk of movement between 3 currencies
Forward margin makes a currency cheaper then the currency is at ________.
Correct Answer
Discount
Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer Your Answer
True/False Question
Prices of capital market instruments change and are expected to change drastically Prices of capital market instruments change and are expected to change drastically
JV means Joint venture and WOS means World of Security.
Correct Answer
False
Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Your Answer
Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question Which functions does the Bill of Lading serve? Correct Answer It is a document of title to goods., It is receipt of goods Your Answer It is a document of title to goods. ,It is receipt of goods Multiple Choice Single Answer Question A Bank quotes interest rate of 9.50/10.00for six months dollar deposit, here the bid rate is :Correct Answer 9.50% P.A. Your Answer 9.50% P.A. Multiple Choice Single Answer
20
Question What is Sovereign Risk? Correct Answer Risk of lending to the governmentof a country Your Answer Risk of lending to the government of acountry Multiple Choice Single Answer Question How does ICC help poor countries? Correct Answer Attract Foreign Direct investments togeather with UNCTAD Your Answer Attract Foreign Direct investments togeather with UNCTAD Multiple Choice Multiple Answer Question As per BIS, recovery from the recent crisis in global capital market was mainly due to Correct Answer Rapid and appropriate policy response in US and other countries , Increase in Foreign Direct Investments , free flow of credit Your Answer Rapid and appropriate policy response in US and other countries , Increase in Foreign DirectInvestments , free flow of credit True/False Question Out of 15 member countries in European Union 12 countries commiteed themselves for a single currency. Correct Answer False Your Answer True True/False Question In red clause credit some clauses are printed in Red ink. Correct Answer True Your Answer True True/False Question Transfer of funds for investment abroad is allowed freely. Correct Answer True Your Answer False Select The Blank Question EEFC account holder is allowed to have ________ facility. Correct Answer Cheque book and nomination Your Answer Credit card, safe custody, safe deposit locker without any fee Select The Blank Question Fixed interest rate Eurobond without the option to convert to equity is known as ________. Correct Answer Straight Debt Your Answer Interest rate swap True/False Question An Indian importing goods from USA pays dollars in India. Correct Answer False Your Answer True Match The Following Question Correct Answer Your Answer PP Form Export Declaration form Export Declaration form Health Certificate Fumigation certificate Export Declaration form Certificate of Inspection As per importers requirement Export Declaration form Certifiate of Origin Export Promotion Council Export Declaration form Multiple Choice Multiple Answer
21
Question For issuing a Documentary credit The applicant is required to provide to the issuing bank details about Correct Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents Your Answer The purchase-sales contract, the mode of payment, the tenor of payment , The track record of the buyer and seller Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given on behalf of a certain person to another person in different country , It is a stamped agreement and is not valid unless it is signed by the issuer True/False Question CFR = FOB plus freight paid by seller + insurance paid by seller. Correct Answer False Your Answer True Select The Blank Question Even after liberalization of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer OPEC True/False Question Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer True Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your Answer Supplemental Reserve Policy Multiple Choice Multiple Answer Question What are the sources of raising funds for exports? Correct Answer Suppliers credit , Forfaiting Your Answer Suppliers credit , Forfaiting , Buyers credit , Foreign currency or Rupee finance True/False Question Normally the forward contracts are booked for making huge profits. Correct Answer False Your Answer False True/False Question Head office of ICC is in Paris because of its First President Eliance Clementel. Correct Answer True Your Answer False Select The Blank Question A ________ Bill of lading does not specify the terms and conditions of carriage.
22
Correct Answer Short Form Your Answer Short Form Multiple Choice Single Answer Question What is the volume of the world's total speculative transactions? Correct Answer Roughly 90 % of the total turnover Your Answer 70% of the total turnover True/False Question Till August 1994 India was following the Indirect Methodof Rate quotation. Correct Answer False Your Answer False Select The Blank Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme. Correct Answer Overseas investment facility Your Answer Overseas investment facility Multiple Choice Single Answer Question Mr P has exported goods in May 2005 and is expecting payment of Euro 25000 by the last week of Sept 2005. Give details of the forward contract he can book :Correct Answer He can book a sale contract any time from May 2005 till Mid Sept 2005, for Euro 25000 or less, for maturity last week of Sept. Your Answer He can book a contract for Forward Purchase, any time from May 2005 till Mid Sept 2005, for Euro 25000 or less, for maturity last week of Sept. Select The Blank Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________. Correct Answer Shelf Registration Your Answer Shell Registration Multiple Choice Multiple Answer Question Which common details will be available in any bill of Lading? Correct Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment Your Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment , The name of the vessel , The date of transportation and contract of transportation Select The Blank Question Under the ________ standard the Country's Central Bank promised to buy back the currency at certain rate of Gold. Correct Answer Gold Your Answer Interest Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer ADRs Select The Blank Question The type of trade where a country sells orange juice in return for cars is known as
23
________. Correct Answer Counter Trade Your Answer Non money trade Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment to EOUs in India for services rendered by them , Payment of Gifts of GBP 5000 per year per donor Multiple Choice Multiple Answer Question Under the liberalisation through FEMA, what can an AD offer to the clients, without the prior permission of RBI or Government? Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Your Answer Caps and collars, and forward rate agreements , Good and competitive exchange rates and cross currency rates Multiple Choice Multiple Answer Question Sterling Market is attractive for an international investor because Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Your Answer Choice of issuing medium term and long term bonds , Less controls and less formalities to be completed , Linking of issues to currency swaps Multiple Choice Single Answer Question Under which contracts the seller pays the import duty for the buyer? Correct Answer DDP Your Answer DDP True/False Question PP Form is required when exports are made to any country by post parcel on value payable basis. Correct Answer False Your Answer True Multiple Choice Multiple Answer Question What were the immediate causes of converting the group of 5 into group of 7 and convene their meeting in late 1985? Correct Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased Your Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased , The heads of G5 insisted to have a meeting , Failure of IMF to control the exchange rates Multiple Choice Single Answer Question What are the powers of money changers? Correct Answer Purchase and sell foreign currency notes and travellers cheques Your Answer Purchase and sell foreign currency notes and travellers cheques, give import and export
24
finance Multiple Choice Single Answer Question Who can open an EEFC account? Correct Answer Individuals , firms, companies, resident in India Your Answer Individuals , firms, companies, resident in India Multiple Choice Single Answer Question What is the role of ICC towards WTO? Correct Answer To provide world business recommendations to WTO Your Answer To further the cause of WTO Match The Following Question Correct Answer Your Answer -Swap price Difference in prices of two legs of buying and selling Quoting rate for both buying and selling a currency -Euro Market Market in Euro currencies Market in Euro currencies -Making market Quoting rate for both buying and sellinga currency Difference in prices of two legs of buying and selling -Spread Price difference between bid and offer Maket of 'Euro' Select The Blank Question Position in a currency is said to be ________, when sales equal purchases. Correct Answer Square Your Answer Awkward Select The Blank Question Hotels and Airline companies are allowed to receive payments in Indian rupees from foreign tourist without insisiting on ________. Correct Answer Encashment certificate Your Answer Encashment certificate Multiple Choice Multiple Answer Question Why is Bill of Exchange a Quasi Negotiable Instrument? Correct Answer It represents title to goods , It is issued under Sale of Goods act Your Answer It represents title to goods , It is issued under Transportation act , It is issued under Bill of exchange act Multiple Choice Single Answer Question Which details about forward contracts do the Exchange Controls verify ? Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000 Your Answer Details of all contracts booked and cancelled beyond a specified limit Multiple Choice Single Answer Question In the context of International economy ,the period between 1920s and 1930s is known as Correct Answer Great Depression Your Answer Great Depression Multiple Choice Multiple Answer Question What do you understand by Commercial Risk? Correct Answer Protracted default by the buyer, Insolvency of the buyer Your Answer Protracted default by the buyer, Insolvency of the buyer
25
Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates Select The Blank Question ________ is the agency of ICC which deals with the maritime crime. Correct Answer International Maritime Bureau Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your Answer
Buffer Stock Facility
True/False Question
Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of payment Your Answer The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer US Dollar Your Answer
US Dollar
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Factors' values
26
Weightages %
Factors' values
100% of total
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer
Pegged to Single currency
Match The Following Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity is delivered
Last date of exercising option
Note issuance facility
Euronotes
Euronotes
Bearer security issued in currency Eurobonds other than that of the country of issue
Eurobonds
Margin on future
Peformance bond or security deposit
True/False Question
Peformance bond or security deposit
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument.
Correct Answer False Your Answer
False
True/False Question
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer
27
Question
What are margins, with reference to futures market?
Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Your Answer Which enables the investor to market the same in the secondary market
Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer
Preshipment credit up to six months for construction and turnkey projects abroad
Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily. Correct Answer Economies Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer US Dollar
28
Your Answer
US Dollar
Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer Control by Government' Your Answer
Recurrence
Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer Sharing of risk of non payment by supplier Your Answer
True/False Question
Sharing risk of Non payment by the Syndicate of Banks giving loans
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment Payment Your Answer Payment Payment True/False Question
of to of to
hotel bills abroad, payment for expenses on Heart operation abroad , EOUs in India for services rendered by them hotel bills abroad, payment for expenses on Heart operation abroad , EOUs in India for services rendered by them
Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer True Your Answer
True
29
True/False Question
There is no difference between CIP and CIF contracts except the mode of transportation.
Correct Answer True Your Answer
True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade Your Answer
Companies which have international trade
Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Primary activity
Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer
An Irrevocable credit
True/False Question
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. Correct Answer False Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer Preshipment credit , Post shipment credit , Duty Draw back Your Answer
Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand
30
Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations Your Answer
Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value
Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer Buy when you are having short position Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer? Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount
31
Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer
Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer Prices of capital market instruments change and are expected to change drastically Your Answer
True/False Question
Prices of capital market instruments change and are expected to change drastically
JV means Joint venture and WOS means World of Security.
Correct Answer False Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed
32
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your Answer
Buffer Stock Facility
True/False Question
Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of payment Your Answer The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer US Dollar
Your Answer
US Dollar
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Factors' values
Weightages %
Factors' values
100% of total
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer
Pegged to Single currency
Match The Following Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity is delivered
Last date of exercising option
Note issuance facility
Euronotes
Euronotes
Bearer security issued in Eurobonds currency other than that of the country of issue
Eurobonds
Margin on future
Peformance bond or security deposit
Peformance bond or security deposit
True/False Question
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct Answer False Your Answer
False
True/False Question
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What are margins, with reference to futures market? Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Your Answer Which enables the investor to market the same in the secondary market Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer Preshipment credit up to six months for construction and turnkey projects abroad Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily. Correct Answer Economies Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer US Dollar Your Answer
US Dollar
Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer Control by Government' Your Answer
Recurrence
Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer Sharing of risk of non payment by supplier
Your Answer
True/False Question
Sharing risk of Non payment by the Syndicate of Banks giving loans
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them True/False Question
Funding Options in domestic yen market are Futures, FRAs, Call and put options. Correct Answer True Your Answer
True
True/False Question
There is no difference between CIP and CIF contracts except the mode of transportation. Correct Answer True Your Answer
True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade
Your Answer
Companies which have international trade
Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Primary activity
Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer
An Irrevocable credit
True/False Question
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. Correct Answer False Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer Preshipment credit , Post shipment credit , Duty Draw back Your Answer
Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value Multiple Choice Multiple Answer
Question
What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer Buy when you are having short position Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer? Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount
Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer Prices of capital market instruments change and are expected to change drastically Your Answer Prices of capital market instruments change and are expected to change drastically True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer False Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed
Chapter – 1 – Introduction to international capital markets Euro currency ; domestic markets ; US Japan ; Switzerland ; UK ; Australia ; Canada ; European ; centers in ECU; Chapter – 2 – International Finance Markets - the U.S. dollar Market ; The U.S. Dollar Market ; The Japanese Yen Market ; The Sterling Market ; The Euro Market Has Been discussed in the next chapter ; Recent development in international Finance Markets ; Chapter – 3 – International Monetary and Financial System The country’s central ban agreed to buy back their currency at a certain rate of gold; Melting down of gold was freely allowed ; There was unrestricted movement of gold (i.e. import and / or export) The total money supply in the country was determined by the quantum of gold reserves in the country The international monetary fund ; quotas ; funding facilities ; regular facilities tranche policies ; restore Tranche credit Tranche ; extended arrangement (extended fund facility
1 5 – 10
13 – 14
15 – 17
(EEF) ; Standard Arrangement (enlarged Arrears Policy) Special facilities (compensatory and contingency financing facility (CCFF) Buffer stock Financing Facility ; Supplemental Reserve Policy (SRP); Reserve Tranche ; Credit Tranche ; Stand by arrangement ; Extended arrangement or extended fund facilities (EFF) special facilities ; CCFF ; Buffer stock financing Facility (BSFF) ; Supplemental resources facility (SRF) Enhanced structural adjustment facility (ESAF) The fixed exchange rate system Problems faced by the fixed exchange rate system ; failure of fixed rate system ; the European monetary system (EMS) ; Economic and monetary union ; Recent developments ; post – Maastricht developments; emergence of EURO The group of seven ; special drawing rights (SDRS) ; The liquidity problems (SDRS) ; the world bank group ; the world bank; international development agency (IDA) ; international finance corporation (IFC) ; The multinational investment Guarantee Agency (MIGA) Chapter – 4 – External commercial borrowing – country ; company ; Equity ; Fund raising ; underwriting ; hedging ; arbitraging ; note issuance facility ; Mechanism and documentation ; syndicated loans ; floating rate notes ; Flip – Flop FRN ; MIS – Mich FRN ; MINI Max FRN ; Capped FRNs, Perpetual FRNs; VRN structured FRNs; Terms and conditions of FRN Ero Commercial paper (ECP) ; ADRs and GDRs; GDR – Global depositary Receipts ; The roles of different parties involved in launching of GDR GDR – Global Depositary Receipts ; The roles of different parties involved in launching of GDR steps involved in issuance of GDR are as follows Pricing and Closing ; costs ; Advantages & Disadvantages of external commercial borrowing Chapter – 5 – Documents used in International Trade ; Regulatory requirements ; operational requirements ; commercial documents ; financial documents transport documents ; risk covering documents ; official / regulatory documents ; miscellaneous documents ; Commercial documents ; proforma invoice ; commercial invoice ; consular invoice customs invoice ; legalized invoice ; combined certificate of origin and value ; financial documents ; bill of exchange ; The second of the same tenor and date unpaid ; the first of the same tenor and date unpaid ; or similar words ; sight B/E; Tenor ; time B/E; DP Basis ; document against Payment Basis ; Documents against Acceptance Basis Transport documents; bill of lading ; received for shipment bill of lading ; on board bill of lading ; Short form bill of lading ; long form bill of lading clean bill of lading ; claused bill of lading ; through bill of lading ; straight bill of lading ; charter party Bill of lading ; container bill of lading container bill of lading ; combined transport B/L or Mulit Modal B/L lash bill of lading house bill of lading ; Airway bill ; Air consignment Note ; House Air way bill ; Postal Receipt ; Courier /Expected delivery service ; multimodal transport document ; risk covering documents ; insurance policy ; Insurance cover note ; official documents export declaration forms ; export certificate; Certificate of origin ; Miscellaneous documents ; packing list ; weight certificate ; certificate of analysis and quality ; certificate of inspection ; health certificate ; phytosanitary / Radiation / Fumigation Chapter 6 – Methods of payment ; advance payment ; bill for collection ; open account ; barter trade ; bank guarantee ; letter of credit (L / C) Seller wants buyer wants ; parties to a
18 – 19 20 – 23 24 – 27 31 – 35 36 – 39
40 – 41 43 – 46
47 – 49
50 – 53
55 – 57
61 – 66
documentary credit ; applicant issuing bank advising ; confirming bank beneficiary ; negotiating bank ; reimbursing bank Types of letters of credit ; revocal letter of credit ; irrevocable letter of credit ; confimed irrevocable letter of credit ; transferable l / c revolving letter of credit ; credit available by installments; back to back letter of credit ; anticipatory credit or red clause letter of credit ; green clause letter of credit ; deferred payment letter of credit ; standby letter of credit ; flow chart of export transaction under letter of credit Flow chart of export transaction under letter of credit ; various steps in the transaction are as under ; steps no. description Chapter 7 – Export / Import Finance ; - Part I import finance ; import financing through trust receipts / import loans ; import financing through issuing l/ c or bank guarantee ; part II – Export Finance Timely ; adequate ; cheaper on liberal terms ; sources for raising finance ; own funds ; 2 friends and relative ; 3 advance payment from buyer ; 4 Trade credit from suppliers 5 banks and financial institutions ; pre-shipment credit (P.C) Post shipment credit ; advance against cash incentives / duty draw back ; forfeiting ; rediscounting of export bills abroad ; buyer’s credit ; supplier’s credit Chapter – 8 – Procedure in connection with foreign investment in India – Seciton – I foreign direct investment ; FERA ; the practice at which a company can issue shares to non residents ; fema ; esop ; section II – Foreign technical collaboration ; General Hotel & Tourism Related Industries ; procedure for granting approval; I / We hereby certify that ; Documentation ; Standard conditions attached to approval for technology agreement ; no objection ; the agreement shall be subject to Indian laws: Section – III – Portfolio investment ; explanation ; the regulations regarding portfolio investments by NRIs / PIOs are as under ; NRI / PIOs ; Section – IV – Other investments ; Section V – procedure for opening branch / project / Liaison office ; Chapter – 9 – Direct investment outside India – overseas investment division TDR ADR GDR the criteria for investment under the automatic route are as under ; JV/WOS; ODA; The schemes for overseas investment by partnership firms ; criteria for overseas investment by a registered partnership firm under the automatic route ; The procedure to be followed by a partnership firm for making investment under the automatic route ; the procedure to be followed by partnership firms which are not eligible under the automatic route ; restrictions for setting up of a second generation company ; resident individual India can acquire foreign securities without prior approval in the following cases ; provided that ; WOS Chapter – 10 – Taxation ; Bilateral relief Unilateral relief ; for the purpose of this provision Part – 2 Forex risk management and hedging techniques Chapter – 1 Foreign exchange markets – The international Market ; survey were ; the market ; the participants ; information and communication system ; the payment system ; the foreign exchange market in India Chapter – 2 – Exchange Rates – Exchange rage quotes ; direct and indirect rates ; direct rates ; indirect rates; spot and forward rates value rate; ready or cash ; value today ; TOM; spot ; forwards; glossary of market terms; Foreign exchange risks ; transactions exposure ; translation exposure ; economic exposure; Translation – moving towards a consensus ; economic exposure ; an overview ; scenario exchange rages in India ; Inward remittances export encashment of foreign currency
67 – 69
70 – 71 73 – 74
75 -76 79 – 83 84 – 88 89 - 92 95 – 99
100 – 102
105 – 106 109 – 114 117 – 123
124 – 127
travelers cheques ; encashment of foreign currency notes; outward remittances ; imports ; issuing foreign currency travelers cheques issuing foreign currency notes ; Type of transaction exchange rate nomenclature ; Factors affecting movement of exchange rates ; summary Chapter – 3 – Forward contracts - Forward cover for merchants – forward purchase cover forward sales contract - repayment of foreign currency loans – period of delivery – cross currency booking (sale / Purchase ) ; utilization of the forward cover ; cancellation ; calculation of exchange rates for forward contracts Cancellation ; early delivery and rollover of forward contracts ; forward sale contracts ; forward purchase contract ; early delivery ; rollover charges Chapter 4 – Options and Futures – History and development ; recent trends ; key features of options and futures ; premium ; maturity or expiration date ; exercise ; in the money ; at the money ; out of the money American option European option ; underlying asset price time before expiration ; underlying asset price ; time before expiration the rate of interest volatility Pricing and analysis ; pricing of options ; underlying asset price ; exercise price ; options and futures products today ; interest rate options ; foreign exchange options and futures ; equity linked options ; commodity linked futures and options Chapter – 5 - Swaps What are swaps ; interest rate swaps ; lowering financial cost ; hedge exposure to interest rate risk ; restructuring the debt in the balance sheet ; amortizing and accreting swaps ; forward swaps ; Reversible swaps ; basis swaps Currency swaps ; lowering funding cost ; entering restricted capital markets ; reducing currency risk ; supply demand imbalances in the markets ; amortizing currency swaps ; accreting currency swaps ; floating – for floating rate currency swaps ; interest payments ; asset swaps PART 3 – AGENCIES INVOLVED IN INTERNATIONAL TRADE Chapter – 1 – Export import Bank of India ; Functions of Exim Bank ; the exim bank performs the following functions ; incidental functions ; operations programmes ; direct financial assistance to exporters ; consultancy and technology services ; pre-shipment credit ; facilities for export – oriented units ; overseas investment facility buyer credit facilities for deemed exports small scale industry export bills rediscounting; the latest new schemes in operation since 1992 are the following Chapter – 2 – Reserve Bank of India Exchange controls in India – RBI as the exchange control authority ; Authorized dealers (Ads) ; Money changers ; other receipts ; payment for imports ; other payments ; delegation to Ads; securities ; foreign currency accounts; liberalization of exchange control Sodhani Committee Recommendations ; Exchange rate management ; Chapter – 3 – Foreign Exchange dealers association of India ; Uniform customs and practice for collection ; Chapter 4 – International chamber of commerce – ICC – WCF – IBCC – WCF Chapter – 5 – Export credit guarantee corporation of India ; ECGC; need for export credit insurance ; credit insurance policies ; scr or standard policy ; turnover policy ; small exporter policy ; specific shipment policy (short term); buyer wise policy ; specific policy for supply contract insurance cover for buyer’s credit and line of credit Services Policy ; construction works policy ; maturity factoring ; Guarantees to banks ;
128 – 129 131 – 137
138 – 141 143- 147
148 – 152 155 – 157
158 – 161
163 – 166
169 – 173
174 – 177 179 – 180 183 – 183 189 – 190
191
packing credit guarantee ; export production finance guarantee ; post – shipment credit guarantee ; export finance guarantee ; export performance guarantee; export finance (overseas lending ) Guarantee Part – 4 – Miscellaneous Chapter 1 – Exchange Earner’s foreign currency (EEFC) Status holder exporter ; individual professional ; others; permissible credits ; permissible debits ; Chapter 2 – Country Risk ; Quantifying country risk ; A comprehensive example ; use of country risk ; assessment ; Chapter 3 – International capital Budgeting - The Basic Frame work Chapter 4 – Incoterms – Group E departure EXW ; Group F Main carriage unpaid ; FAS ; FOB ; CFR ; CIF ; CPT ; CIP ; Group C; Group D ; Arrival DAF ; DES ; DEQ; DDU CTD / MTO ; DDP ; delivered duty paid (CTD / MTO) Chapter – 5 – Actuals ; arbitrage ; bankers’ acceptance bond (BAS) ; Bearer Bond ; Bid rate ; Bond ; Bull; call option ; caps ; cash commodity ; cash market ; cedel ; certificate of deposit (CD) class of option ; closing price ; commission ; commercial paper (CP) ; contract specifications ; convertible bond ; coupon ; cover; delivery ; delivery month ; equity ; equity swaps ; equity collar ; Eurobond ; Euro clear ; euro commercial paper; euro –currency ; Exercise price ; expiration date; floating rate note ; fundamental Analysis ; futures contract hedge ; Hybrid ; Interest Rate swap; Intermediation ; Intrinsic Value ; Libor ; Long margin ; margin call maturity naked position ; note issuance facility (NIF) Option ; overbought ; oversold ; physical market ; position ; premium purchaser ; put option ; settlement price short ; speculator ; strike price ; straight debt tap ; technical analysis tranche ; tombstone volatility ; volume ; withholding tax ; yankee bond ;
Chapter – 1 – Introduction to international capital markets Ero currency market ; Domestic market ; US, Japan Switzerland ; uk, australia canada ; european conters in ECU ; Euro ; Asian doller market ; forex marker SDR ; ECU ; US dollar ; German ; Swiss ; Japanees ; France ; Canada ; Australia; Chaper - 2 - International financial Markets - The U.S.Dollar Market ; pricing ; federal reservice board; curency ; central bank of US ; The Japanese Yen Market ; Mof; Long Term Prime Rate ; 1970 japanese The Sterling Market ; 20th 19th century 1979 ; OECD Organization for economic co-operation & development EMS Exchange rate Mechanism; FRN ; Bulldog; the EURO Market has been discussed in the nex chapter Recent development in international financial markets ; septer 11 enron LtCN (Long term capital Management Brazil china and mexico; 1990 ; 1980 ; severe tests financial system; securitization forces banks ; attractive to browwerw; legal issues flexibility ; financial market development segement of ; swaps cash flow ; roject related; gain access to international ; marketability ; new financing techniques;
Chapter – 3 – International Monetary and Financial System
1945 ; 1944 ; intenrational world Bank for reconstruciton and development; second world war was european ; IMF International Monetary Fund; Gold standard first world war The country's Central Bank agreed to buy back their currency at a certain rate of gold;
1 1 2 5 6 7 7 8 9 10 13 13 13
195 199 203 – 204 207- 212 215 – 217
218 -219 220 – 221
melting down of gold was freely allowed There was unrestricted movement of gold (I.e. import and / export The total money supply in the country was determined by the quantum of gold reserves in the country 1870 ; 1914 ; 1821 ; 1834 ; 1870 ; European countries gold standard in 1933 ; 1930 International Monetary Co-operation ; IBRD ; IMF ; popularly known as world bank IMF ; the international monetary fund 1945 ; 1971 ; 25 years ; aims SDR ((special drawing rights ) 25% 1960 ; 1963 ; Gross domestic product; 5 years ; SDR 146 bn to SDR 212 ; 45% ; 1998 ; Two parts Funding Facilities ; Regular Facilities ; Special facilities ; restore tranche credit tranche ; compensatory and contingency financing facility (CCFF) ; Extended arrangement (Extended Fund Facility EEF) ; Buffer stock Financing Facility ; Standard Arrangement (Enlarged Arrears Policy ) ; Supplemental Reserve Policy (Supplemental Reserve Policy (SRP Reserve Tranche ; Credit Tranches ; Stand - By Arrangement Extended arrangement or extended fund facilities (EFF) Special Facilities ; CCFF ; Buffer Stock Financing Facility ; BSFF ; Supplemental Resource Facility (SRF) ; 1997 Enhance Structural Adjustment Facility (ESAF) ; The fixed exchange rate system US dollars 35 ounce of gold Problem faced by the fixed exchange rate system ; 1960 ; value apprehension ; delay in adjustment failure of fixed rate system ; the european monetary system (EMS) European Community Currency Snake ; 1973 ; EMS EC ECU European Currency Unit ; SDR ; ERM ; DM ; matrix german bundesbank EM ; PST ; ERM ; Economic and monetary Union ;
LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question
Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer
True
True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer False Your Answer
False
Select The Blank Question The rate of interest on rupee finance for exports is not exceeding ________ less than PLR.
13 14 14 14 15 16 16 16 17 17 18 18 19 20 20 21
Correct Answer 0.025 Your Answer
50 basis points over LIBOR
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of payment Your Answer The exercise or strike price, the amount , The expiration date and time, the method of payment Multiple Choice Single Answer Question In the syndicated loan arrangement the borrower has to execute :Correct Answer Single Principal loan agreement Your Answer
Single Principal loan agreement
True/False Question
At Least one principal Lender bank is essential for issue of the ADR or GDR. Correct Answer False Your Answer
True
Multiple Choice Single Answer Question US financial system is the freest system because Correct Answer Institutions can introduce new products and instuments at the price of their choice. Your Answer Institutions can introduce new products and instuments at the price of their choice. Multiple Choice Single Answer Question In a coupon swap who is called the buyer? Correct Answer One who pays the fixed rate of interest Your Answer
One who pays the fixed rate of interest
True/False Question
Till August 1994 India was following the Indirect Methodof Rate quotation. Correct Answer False Your Answer
False
Select The Blank Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme. Correct Answer Overseas investment facility Your Answer
Overseas investment facility
Multiple Choice Single Answer Question Under the automatic route of Direct Investment Abroad, what is the restriction on market purchases? Correct Answer 50% of the net worth of the investing company Your Answer
50% of the net worth of the investing company
Multiple Choice Single Answer Question What are the powers of money changers? Correct Answer Purchase and sell foreign currency notes and travellers cheques Your Answer
Purchase and sell foreign currency notes and travellers cheques and also Give export finance
Select The Blank Question Any company involved in foreign exchange transactions is exposed to ________ risk. Correct Answer Currency Your Answer
Currency
Multiple Choice Multiple Answer Question What are the features of Settlement price ? Correct Answer Price established by the clearing house at the end of each trading session , It is used to determine the net gain, loss, margin call and next days price limits Your Answer Price established by the clearing house at the end of each trading session , It is used to determine the net gain, loss, margin call and next days price limits Multiple Choice Multiple Answer Question What are the activities of ICC? Correct Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime Your Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime , Increased Govt regulation of Business True/False
Question
Cause of increase in cost of public issues Underwriting fees , selling commission Correct Answer True Your Answer
False
Select The Blank Question The currency swaps used ________. Correct Answer To lower the risk of currency exposure Your Answer
To lower the risk of currency exposure
True/False Question
The Option period in the forward contract is at the option of the Banker, hence the bank has to be very conservative in quoting rates. Correct Answer False Your Answer
True
Multiple Choice Multiple Answer Question Which factors affect the exchange rates in short time period? Correct Answer Demand and supply, interest rates, inflation, , Sentiment, Speculation Your Answer Demand and supply, interest rates, inflation, , Sentiment, Speculation , GDP,Balance of trade and payment,Unemployment Match The Following Question
Correct Answer
Your Answer
Departure
EXW
EXW
Main carriage paid
CFR
CFR
Main carriage unpaid
FAS
FAS
Arrival
DES
DES
Multiple Choice Multiple Answer Question Sterling Market is attractive for an international investor because Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Your Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds , Linking of issues to currency swaps
True/False Question
In red clause credit some clauses are printed in Red ink.
Correct Answer True Your Answer
False
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the bid rate for USD? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Multiple Answer Question Criteria for investment abroad under automatic route :Correct Answer Activity for investment is core activity of Indian Company. , Total Financial commitment in JV/WOS as per prescribed ceiling Your Answer Activity for investment is core activity of Indian Company. , Total Financial commitment in JV/WOS as per prescribed ceiling Multiple Choice Multiple Answer Question Who can issue the Certificate of Inspection? Correct Answer Export Inspection Council , Person authorised by Importer. Your Answer
Export Inspection Council , Person authorised by Importer.
Multiple Choice Single Answer
Question
Large number of exporters from which country are enjoying the privilege of receiving up front cash from importers in Russia? Correct Answer United Kingdom Your Answer
United Kingdom
True/False Question
In developed markets, speculators play important role in determining the trend of currency rates. Correct Answer True Your Answer
True
Select The Blank Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________. Correct Answer Shelf Registration Your Answer
Shelf Registration
Select The Blank Question In Overseas market the forward rate is generally quoted on the basis of ________. Correct Answer Fixed date Your Answer
Calendar month
Select The Blank Question Forward Margin makes a currency costlier then the currency is at ________. Correct Answer Premium Your Answer
Discount
Multiple Choice Multiple Answer Question These are the parties to the documentary credit :Correct Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bank Your Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bank Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Your Answer
Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Single Answer Question Fixed, Floating or Limited flexibility are used in the context of Correct Answer Exchange Rates Your Answer
Exchange Rates
Select The Blank Question In mid 1992 ________ rejected the ratification of Maastricht treaty Correct Answer Denmark Your Answer
UK
Multiple Choice Multiple Answer Question Under the liberalisation through FEMA, what can an AD offer to the clients, without the prior permission of RBI or Government? Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Your Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Multiple Choice Single Answer Question To whom is an AD required to report the cancellation of forward contracts? Correct Answer No one at all. Your Answer
To Reserve Bank of India, fortnightly
Select The Blank Question ECGC provides cover to an Indian contractor for construction work abroad under ________. Correct Answer Construction works policy Your Answer
Export Performance Guarantee
True/False Question
The Negotiating bank examines the documents submitted by the seller and makes payment if they comply the terms and conditions of the LC. Correct Answer True Your Answer
True
Multiple Choice Single Answer
Question
What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Multiple Answer Question What are the sources of raising funds for exports? Correct Answer Suppliers credit , Forfaiting Your Answer
Suppliers credit , Forfaiting
Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount Your Answer
Discount
Multiple Choice Single Answer Question Name the common forex derivatives :Correct Answer Options, futures Your Answer
Options, futures
True/False Question
Country risk analysis is a futile exercise in the background of cost of analysis. Correct Answer True Your Answer
False
Select The Blank Question Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer
OECD
Match The Following Question Issues linked with LIBOR,LIBID,LIMEAN
Correct Answer
Your Answer
FRNs
FRNs
Issue of bonds without FloatingRate Note fixed rate of interest, linked to short term interest rate in the global market
FloatingRate Note
Issue of loans Syndicated Loans internationally,through arranger, underwriter,co manager, for a large amount for sharing risk of lending
Syndicated Loans
Equity issues in the American or Global foreign markets either as Depository Receipts direct investments or portfolio investments.
American or Global Depository Receipts
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single Answer Question Proforma Invoice, Commercial Invoice, Consaular Invoice are which type of documents? Correct Answer Commercial Documents Your Answer
Commercial Documents
True/False Question
Charter party bills of lading are generally not acceptable to bankers as security because Sea Charters are full of problems. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question Why does a Transaction exposure arise? Correct Answer Trading flows , Dividend or capital flows Your Answer
Trading flows , Dividend or capital flows
Multiple Choice Single Answer Question If a dealer of securities is quoting rate as 200-250 then the rate 200 signifies which rate with reference to him? Correct Answer Bid rate Your Answer
Bid rate
Select The Blank Question A Documentary credit issued on the strength of another documentary credit is known as ________. Correct Answer Back to Back credit Your Answer
Back to Back credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations True/False
Question
Tranche' is a managed issue of securities in smaller denominations. Correct Answer True Your Answer
False
True/False Question
Funding Options in domestic yen market are Futures, FRAs, Call and put options. Correct Answer True Your Answer
True
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Multiple Answer Question Which events can lead to materialisation of country risk? Correct Answer Change in Government policies , Change in Government rules and laws Your Answer Change in Government policies , Change in Government rules and laws , Unpredicted Earthquake, Tsunami waves Multiple Choice Multiple Answer Question What is a 'speculator'? Correct Answer Trader who is neither hedger nor arbitragor , He takes risks for profit Your Answer Trader who is neither hedger nor arbitragor , He takes risks for profit Select The Blank Question The major industrial power whose economy was not affected after the II world war was ________. Correct Answer USA Your Answer
USA
Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue
Your Answer
Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue
Multiple Choice Multiple Answer Question What do you understand by Commercial Risk? Correct Answer Protracted default by the buyer , Insolvency of the buyer Your Answer
Protracted default by the buyer , Insolvency of the buyer
Select The Blank Question Legalised invoice is also called ________ invoice. Correct Answer Visaed Your Answer
Visaed
Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer
Monday
True/False Question
The American Dollar market comprises of the domestic segment of USD the offshore segment of USD. Correct Answer True Your Answer
True
Match The Following Question
Correct Answer
Your Answer
LastStage
Form a single currency
Meet in Maastricht in Netherland
The First stage in the Free movement of capital Establish EURO Bank Europeand and Monetary in EC Union (EMU) Stage II in EMU
Establishment of European Monetary Institute
Establishment of European Monetary Institute
Stage III in EMU
Members to meet the convergence criteria and fix the exchange rates
Members to meet the convergence criteria and fix the exchange rates
Select The Blank
Question
Under the ________ standard the Country's Central Bank promised to buy back the currency at certain rate of Gold. Correct Answer Gold Your Answer
Gold
True/False Question
An Indian exporting goods to New York receives dollars in New York. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question The factors which affect the performance of an option are:Correct Answer Underlying asset price , Time before expiration, rate of interest Your Answer
Underlying asset price , Time before expiration, rate of interest
Multiple Choice Multiple Answer Question Which contracts are used for transportation by road? Correct Answer FCA , CPT Your Answer
FCA , CPT , CFR
True/False Question
Bid rate is bidders buying rate and offered r ate is bidders selling rate. Correct Answer True Your Answer
False
Match The Following Question
Correct Answer
Cancellation of contracts ECD above USD 500000
Your Answer ECD
Forward Purchase contract currency at premium
Presume earliest delivery Presume earliest delivery
Forward purchase contract currency at discount
Presume latest delivery
Presume latest delivery
Exchange margins
FEDAI
FEDAI
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer
Other managed Floating
Multiple Choice Multiple Answer Question Which two countries were included to convert the group of five into the group of seven? Correct Answer Italy , Canada Your Answer
Canada , Italy
Multiple Choice Single Answer Question Who can open an EEFC account? Correct Answer Individuals , firms, companies, resident in India Your Answer
Individuals , firms, companies, resident in India
Multiple Choice Single Answer Question Method of advance payment is not disadvantageous to :Correct Answer The seller Your Answer
The seller
Multiple Choice Single Answer Question What is the immediate cause for the growth of futures and options in the last two decades? Correct Answer Increase in volatile trading conditions Your Answer
Increase in volatile trading conditions
Multiple Choice Single Answer Question What do you mean by a derivative? Correct Answer One which has been derived from other fundamental instruments Your Answer Derived from Mathematical expressions Multiple Choice Single Answer Question "Currency Snake"
Correct Answer Plus or minus movement of exchange rate around the parity rate Your Answer
Currency of European Country in the early 70's
True/False Question
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct Answer False Your Answer
False
Multiple Choice Single Answer Question In which currency can the EEFC account be opened? Correct Answer Any Convertible currency Your Answer
Any Convertible currency
Multiple Choice Multiple Answer Question Criteria for Direct investment abroad under normal route :Correct Answer Viability of the proposal, and excellent track record of business , Experience and expertise of promoters, benefit to the country Your Answer Total Financial commitment in JV/WOS as per prescribed ceiling , Activity for investment is core activity of Indian Co. Select The Blank Question ________ enables bankers to extend purchase, negotiation or discount of export bills. Correct Answer Post shipment credit guarantee Your Answer
Post shipment credit guarantee
Multiple Choice Single Answer Question For setting up a joint venture or WOS abroad, Indian banks operating in India need a clearance :Correct Answer Under Banking Regulation Act Your Answer
Under Banking Regulation Act
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade Your Answer
Companies which have international trade
True/False Question
Indian companies are now allowed to freely invest abroad up to $1.5 million, raised through GDE or EEFC without prior permission from RBI. Correct Answer False Your Answer
False
Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
True/False Question
Terms in an Irrevocable credit can not be alterred at all.
Correct Answer False Your Answer
True
Select The Blank Question Position in a currency is said to be ________, when sales equal purchases. Correct Answer Square Your Answer
Square
Multiple Choice Multiple Answer Question How is the entry into any conuntry's money market or capital market is restricted? Correct Answer Because of different tax systems , Because of different credit standards Your Answer Because of different tax systems , Because of different credit standards Select The Blank Question The currency notes and coins of individual countries participating in "Euro" have ceased to be a legal tender from ________. Correct Answer 2002 Your Answer
2002
Select The Blank Question Partnership firm not eligible for Overseas Direct Investment needs to apply to RBI Approval in form ________.
Correct Answer ODI Your Answer
ODI
Multiple Choice Single Answer Question Where does the word derivative originate from? Correct Answer Mathematics Your Answer
Mathematics
Select The Blank Question To make the export more competitive and remunerative, the Indian Govt extends ________ facility. Correct Answer Cash Incentives Your Answer
Cash Incentives
Multiple Choice Single Answer Question The financial system of any country consists of Correct Answer Network of commercial banks, domestic and foreign investment banks, NBFCs, etc Your Answer The Central bank, IMF and world bank
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Select The Blank Question Association of several scheduled commercial banks for forex business is ________. Correct Answer Foreign Exchange Dealers Association of India Your Answer
Foreign Exchange Dealers Association of India
True/False Question
Installment credit is issued for specific quantities of goods to be shipped every week or month. Correct Answer True Your Answer
True
Select The Blank Question Combined Certificate of Origin and Value are required by ________. Correct Answer Commonwealth Countries Your Answer
Commonwealth Countries
Select The Blank Question The creditworthiness of the futures seller and the futures buyer is ________ because of the presence of the Futures exchange. Correct Answer Irrelevant Your Answer
Irrelevant
Select The Blank Question When interest rate changes by 0.05 per cent then it has changed ________ basis points. Correct Answer 50 Your Answer
5
Multiple Choice Multiple Answer Question What were the primary objectives of the group of seven countries? Correct Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries Your Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries Multiple Choice Multiple Answer
Question
The crisis in global capital market in 2002-04 was due to
Correct Answer Collapse of Enron , Collapse of Argentina's currency board , The war against terrorism Your Answer Collapse of Enron , Collapse of Argentina's currency board Multiple Choice Multiple Answer Question Mr A sells an option conferring the right to buy a kilogram of silver at Rs 8000/- for next six months means :Correct Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, in next 6 months, even if the price goes up, , The buyer of option can sell silver to Mr A at 8000/- per Kg, in next 6 months, even if the price goes down. Your Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, in next 6 months, even if the price goes up, , Mr A has choice of selling or not selling silver on his own Multiple Choice Multiple Answer Question Major investors in NIF are :Correct Answer Commercial Banks , Non banking Finance companies , Insurance Companies Your Answer Commercial Banks , Non banking Finance companies , Insurance Companies True/False Question
With the advent of futures and Options there is no need for additional instruments of risk hedging. Correct Answer False Your Answer
False
Select The Blank Question During the fixed rate exchange system prevailing in India, the intervention currency was ________. Correct Answer Sterling Pound Your Answer
USDollar
Multiple Choice Single Answer Question What help does EXIM Bank provide under the scheme 'Direct Financial assistance to exporters'? Correct Answer Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer Your Answer Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer Multiple Choice Single Answer
Question
What is a bill of lading?
Correct Answer Transport document representing movement of goods by water. Your Answer
Transport document representing movement of goods by water.
Multiple Choice Single Answer Question Which controls are not permitted by IMF? Correct Answer Current account controls Your Answer
Exchange controls
Multiple Choice Multiple Answer Question What are the objectives of International Chamber of Commerce? Correct Answer Champion the global economy as a force of economic growth , Creating of job and prosperity Your Answer Champion the global economy as a force of economic growth , Creating of job and prosperity True/False Question
Yankee bond is issued for domestic borrowers.
Correct Answer False Your Answer
True
Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market True/False Question
An AD can book a forward contract for a part of the amount of Sale Contract Correct Answer True Your Answer
False
True/False Question
Sterling FRNs are issued in Europe, USA ,Asia
Correct Answer False Your Answer
True
Match The Following Question Bond basis to money market basis
Correct Answer
Your Answer
Bond basisx 360/365
Bond basisx 360/365
3 months LIBOR +2 % PA Floating rate
Floating for floating rate currency swap
15% P.A.
Fixed rate
Fixed rate
Money market basis to bond basis
Money market basis x 365/360
Money market basis x 365/360
Select The Blank Question In Indian interbank market forward rates are generally quoted on the basis of ________. Correct Answer Calendar month Your Answer
Calendar month
Multiple Choice Single Answer Question In case of syndication of loans the amount of loan and currency is finalised by :Correct Answer Borrower Your Answer
Underwriter of the syndicate
Multiple Choice Single Answer Question European currency Unit Correct Answer Basket of Currencies of members of EMS Your Answer
Basket of Currencies of members of EMS
Select The Blank Question The counter party in option is ________. Correct Answer The exchange Your Answer
Trustworthy corporation, who hedges the risks of market uncertainty
Multiple Choice Single Answer Question A Spot Transaction between Japanese Yen and Sterling carried out on Friday in Singapore, the settlement day will be
Correct Answer Following Tuesday if it is a working day in all the three centers Your Answer
Following Tuesday if it is a working day in all the three centers
Select The Blank Question EEFC account holder is allowed to have ________ facility. Correct Answer Cheque book and nomination Your Answer
Cheque book and nomination
Multiple Choice Multiple Answer Question A Usance bill of exchange may be drawn in 2 ways. Which are they? Correct Answer Documents against payment , Documents against acceptance Your Answer
Documents against payment , Documents against acceptance
Multiple Choice Single Answer Question Why have futures and options come into existence? Correct Answer To avoid business risk. Your Answer
To avoid business risk.
True/False Question
In an interest rate swap if the payment schedules are identical, only diffrence between the two payments is delivered. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What are the main causes of fluctuations in Exchange rates? Correct Answer Market demand and supply, sentiments , Government regulatios, fiscal policies, political instabilities Your Answer Government regulatios, fiscal policies, political instabilities , Market demand and supply, sentiments , The purchasing power of currency changes every second Multiple Choice Single Answer Question What do you understand by a swap? Correct Answer 2 counter parties agree to exchange streams of payments over a period of time Your Answer 2 counter parties agree to exchange streams of payments over a period of time
True/False Question
Import finance is nomally available at rates of interest cheaper than domestic finance rates. Correct Answer False Your Answer
False
Multiple Choice Single Answer Question A weight list, a packing list used in international trade are which type of documents? Correct Answer Operational Documents Your Answer
Operational Documents
Multiple Choice Multiple Answer Question What do you understand by 'Foreign Exchange Risk'? Correct Answer The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows Your Answer The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer Preshipment credit beyond six months for construction and turnkey projects abroad Multiple Choice Single Answer Question Which Indian Co. is not eligible to make investment abroad under automatic route? Correct Answer Co which is caution listed by RBI Your Answer
Co which is caution listed by RBI
True/False Question
Naked position is when investor does not hedge against market risk. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer
Question
In DAF, the frontier means :-
Correct Answer Frontier of exporter's country , Frontier of importer's country Your Answer
Frontier of exporter's country , Frontier of importer's country
Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer
USD 1 trillion
Match The Following Question
Correct Answer
Your Answer
European option
On or after maturity
On or after maturity
Out of money
Loss
Profit
In the money
Profit
Loss
American option
Before maturity
Before maturity
Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
True/False Question
PP Form is required when exports are made to any country by post parcel on value payable basis. Correct Answer False Your Answer
False
Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Core activity
Multiple Choice Single Answer Question How many Countries participated in the third survey on Foreign Exchange, coordinated by BIS in 1992? Correct Answer 26 Your Answer
26
Select The Blank Question Indian Co. intending to make investment under Automatic route needs to submit form ________ to RBI with enclosures. Correct Answer ODA Your Answer
ODA
Multiple Choice Single Answer Question In International trade, Advance payment means :Correct Answer Providing up front cash Your Answer
Providing up front cash
True/False Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates Select The Blank Question Correct Answer
________ is the agency of ICC which deals with the maritime crime. International Maritime Bureau
Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer
Buffer Stock Facility
Your Answer
Buffer Stock Facility
True/False Question Correct Answer
Cross currency forward contract is not meaningful if original contract is in Rupees to USD True
Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer Your Answer
The exercise or strike price, the amount , The expiration date and time, the method of payment The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option
Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer US Dollar Your Answer Match The Following
US Dollar
Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Factors' values
Weightages %
Factors' values
100% of total
Select The Blank Question Correct Answer Your Answer
Global capital market can be understood from the study of ________. Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer Match The Following Question
Pegged to Single currency
Correct Answer
Your Answer
Maturity of future
Time when actual commodity Last date of exercising option is delivered
Note issuance facility
Euronotes
Euronotes
Bearer security issued in currency other than that of the country of issue
Eurobonds
Eurobonds
Margin on future
Peformance bond or security Peformance bond or security deposit deposit
True/False Question
Postal receipt is an acknowledgement of receipt of goods, a quasi
negotiable instrument. Correct Answer
False
Your Answer
False
True/False Question Correct Answer
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. True
Your Answer
True
Multiple Choice Multiple Answer Question What are margins, with reference to futures market? Correct Answer Your Answer
Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts
Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer Your Answer
By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Which enables the investor to market the same in the secondary market
Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad
Your Answer
Select The Blank Question
Preshipment credit up to six months for construction and turnkey projects abroad
Correct Answer
Over the years ________has been the most widely accepted currency in international capital market. American Dollar
Your Answer
American Dollar
Select The Blank Question Correct Answer
As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily. Economies
Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer US Dollar Your Answer
US Dollar
Select The Blank Question
________ is the acid test for events to be included in country risk.
Correct Answer
Control by Government'
Your Answer
Recurrence
Select The Blank Question Correct Answer
The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Brussels
Your Answer
Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer
Sharing of risk of non payment by supplier
Your Answer
Sharing risk of Non payment by the Syndicate of Banks giving loans
True/False
Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer Your Answer
It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Your Answer
True/False Question
Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them
Correct Answer
Funding Options in domestic yen market are Futures, FRAs, Call and put options. True
Your Answer
True
True/False Question Correct Answer
There is no difference between CIP and CIF contracts except the mode of transportation. True
Your Answer
True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer
Companies which have international trade
Your Answer
Companies which have international trade
Select The Blank Question
When an Indian Company earns at least 50% of its average
Correct Answer
turnover from a particular activity then that activity is considered as ________. Core activity
Your Answer
Primary activity
Select The Blank Question
A Credit can be a confirmed credit only if it is also ________.
Correct Answer
An Irrevocable credit
Your Answer
An Irrevocable credit
True/False Question Correct Answer
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. False
Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer
Preshipment credit , Post shipment credit , Duty Draw back
Your Answer
Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Your Answer
Which are convertible , Which have liquidity confirmed in Euro market operations Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value
Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Your Answer
Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Your Answer
Select The Blank Question
Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue
Correct Answer
Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Euro Commercial Papers
Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer
Buy when you are having short position
Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer? Correct Answer Your Answer
Select The Blank Question
He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies
Correct Answer
Forward margin makes a currency cheaper then the currency is at ________. Discount
Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate?
Correct Answer Your Answer
Unfavourable fluctuations in exchange rate can wipe out the normal business profit Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer Your Answer
Prices of capital market instruments change and are expected to change drastically Prices of capital market instruments change and are expected to change drastically
True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer
False
Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Your Answer True/False Question
Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue
Correct Answer
Out of 15 member countries in European Union 12 countries commiteed themselves for a single currency. False
Your Answer
False
True/False Question Correct Answer
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. False
Your Answer
False
Select The Blank Question Correct Answer
A Credit can be a confirmed credit only if it is also ________. An Irrevocable credit
Your Answer
An Irrevocable credit
Match The Following Question
Correct Answer
Intolerable risk
Drop the investment project Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Banks are ahead
Weightages %
Factors' values
Factors' values
Select The Blank Question
Your Answer
Correct Answer
Over the years ________has been the most widely accepted currency in international capital market. American Dollar
Your Answer
American Dollar
Multiple Choice Single Answer Question What is the meaning of a country risk? Correct Answer Your Answer
Risk of events in a particular country which may cause loss to a person dealing with that country Risk of events in a particular country which may cause loss to a person dealing with that country
Multiple Choice Multiple Answer Question Which common details will be available in any bill of Lading? Correct Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment Your Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment Multiple Choice Single Answer Question What help does EXIM Bank provide under the scheme 'Direct Financial assistance to exporters'? Correct Answer Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer
Your Answer
Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer
Match The Following Question
Correct Answer
Your Answer
PP Form
Export Declaration form
Export Declaration form
Health Certificate
Fumigation certificate
Fumigation certificate
Certificate of Inspection
As per importers requirement
As per importers requirement
Certifiate of Origin
Export Promotion Council
Export Promotion Council
Select The Blank Question
Correct Answer
Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries OECD
Your Answer
OECD
Multiple Choice Single Answer Question How many INCOTERMS are there in "Departure" Group? Correct Answer
One
Your Answer
Two
Multiple Choice Single Answer Question What is a bill of lading? Correct Answer Your Answer
True/False Question
Transport document representing movement of goods by water. Transport document representing movement of goods by water.
Correct Answer
The American Dollar market comprises of the domestic segment of USD the offshore segment of USD. True
Your Answer
True
Select The Blank Question
The creditworthiness of the futures seller and the futures buyer is ________ because of the presence of the Futures
exchange. Correct Answer
Irrelevant
Your Answer
Irrelevant
Multiple Choice Single Answer Question What was the collective assessment of International financial market about the country risk of many cnuntries in the last decade? Correct Answer Whatever it was, was disastrously wrong. Your Answer
Whatever it was, was disastrously wrong.
Multiple Choice Multiple Answer Question How is the entry into any conuntry's money market or capital market is restricted? Correct Answer Because of different tax systems , Because of different credit standards Your Answer Because of different tax systems , Because of different credit standards True/False Question Correct Answer
Till August 1994 India was following the Indirect Methodof Rate quotation. False
Your Answer
True
Select The Blank Question Correct Answer
In Indian interbank market forward rates are generally quoted on the basis of ________. Calendar month
Your Answer
Calendar month
Select The Blank Question Correct Answer
Rupee was liberalised on ________ account in 1993, and on current account in 1994. Trade
Your Answer
Trade
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating
Your Answer
Other managed Floating
Multiple Choice Multiple Answer Question Which of these are considered as miscellaneous documents? Correct Answer Packing list , Weight certificate Your Answer True/False Question
Packing list , Weight certificate
Correct Answer
Funding Options in domestic yen market are Futures, FRAs, Call and put options. True
Your Answer
True
Select The Blank Question Correct Answer
ECGC provides cover to an Indian contractor for construction work abroad under ________. Construction works policy
Your Answer
Construction works policy
Multiple Choice Single Answer Question Equity can be raised internationallly by a company through :Correct Answer Fund raising, underwriting, hedging , arbitration operations Your Answer
Fund raising, underwriting, hedging , arbitration operations
Multiple Choice Single Answer Question How many Countries participated in the third survey on Foreign Exchange, coordinated by BIS in 1992? Correct Answer 26 Your Answer
26
True/False Question
In red clause credit some clauses are printed in Red ink.
Correct Answer
True
Your Answer
True
True/False Question
Prior approval of RBI is needed for payment of all imports.
Correct Answer
False
Your Answer
True
Multiple Choice Multiple Answer Question The factors which affect the performance of an option are:Correct Answer Your Answer
Underlying asset price , Time before expiration, rate of interest Underlying asset price , Time before expiration, rate of interest
Multiple Choice Single Answer Question What is the immediate cause for the growth of futures and options in the last two decades? Correct Answer Increase in volatile trading conditions Your Answer Select The Blank Question
Management of external risk
Correct Answer
For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme. Overseas investment facility
Your Answer
Overseas investment facility
Select The Blank Question Correct Answer
To make the export more competitive and remunerative, the Indian Govt extends ________ facility. Cash Incentives
Your Answer
Advance against cash incentives
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Multiple Choice Multiple Answer Question External Commercial Debt market :Correct Answer
Prevails in Domestic market of foreign country , Prevails in offshore markets
Your Answer
Prevails in Domestic market of foreign country , Prevails in offshore markets
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer
Companies which have international trade
Your Answer
Companies which have international trade
Multiple Choice Multiple Answer Question What do you understand by 'Foreign Exchange Risk'? Correct Answer
Your Answer
The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows , Certainty of an event which would happen in favour of the importer/ exporter
Multiple Choice Single Answer Question For a spot transaction carried out on Tuesday, where both centers have holiday on Wednesday, currencies will be exchanged on :Correct Answer Thursday if it is a working day at both the centers Your Answer
Friday
Multiple Choice Single Answer Question Which details about forward contracts do the Exchange Controls verify ? Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000 Your Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000 True/False Question Correct Answer
In the forward rate quotations between two currencies, when one currency is at discount the other currency is at premium. True
Your Answer
True
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand
Correct Answer Your Answer
Select The Blank Question
Which are convertible , Which have liquidity confirmed in Euro market operations Which are convertible , Which have liquidity confirmed in Euro market operations
Correct Answer
A Bill of exchange payable 45 days from date of shipment, is a means of ________ from seller to the buyer. Credit
Your Answer
Credit
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer Preshipment credit beyond six months for construction and turnkey projects abroad Select The Blank Question Correct Answer Your Answer
True/False Question
Global capital market can be understood from the study of ________. Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Correct Answer
Import finance is nomally available at rates of interest cheaper than domestic finance rates. False
Your Answer
False
Multiple Choice Multiple Answer Question Major s in NIF are :Correct Answer Your Answer Select The Blank Question
Commercial Banks , Non banking Finance companies , Insurance Companies Commercial Banks , Non banking Finance companies
Correct Answer
In mid 1992 ________ rejected the ratification of Maastricht treaty Denmark
Your Answer
Denmark
True/False Question Correct Answer
Indian companies are now allowed to freely invest abroad up to $1.5 million, raised through GDE or EEFC without prior permission from RBI. False
Your Answer
True
Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates Select The Blank Question ________ is the agency of ICC which deals with the maritime crime. Correct Answer International Maritime Bureau Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer
Buffer Stock Facility
Your Answer
Buffer Stock Facility
True/False Question Correct Answer
Cross currency forward contract is not meaningful if original contract is in Rupees to USD True
Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer Your Answer
The exercise or strike price, the amount , The expiration date and time, the method of payment The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option
Multiple Choice Single Answer
Question Correct Answer
Which is the most actively traded currency in the international market today? US Dollar
Your Answer
US Dollar
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not Cost of evluation does not justify analysis justify analysis
Stock market analysis
Banks are ahead
Factors' values
Weightages %
Factors' values
100% of total
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer
Pegged to Single currency
Match The Following Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity is delivered
Last date of exercising option
Note issuance facility
Euronotes
Euronotes
Bearer security issued in Eurobonds currency other than that of the country of issue
Eurobonds
Margin on future
Peformance bond or security deposit
True/False Question
Peformance bond or security deposit
Correct Answer
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. False
Your Answer
False
True/False Question Correct Answer
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. True
Your Answer
True
Multiple Choice Multiple Answer Question What are margins, with reference to futures market? Correct Answer Your Answer
Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts
Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer Your Answer
By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Which enables the investor to market the same in the secondary market
Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion
Your Answer
USD 275 Billion
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer Preshipment credit up to six months for construction and turnkey projects abroad Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily. Correct Answer Economies Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer US Dollar Your Answer
US Dollar
Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer Control by Government' Your Answer
Recurrence
Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
Multiple Choice Single Answer
Question
What is Risk Syndication facility?
Correct Answer
Sharing of risk of non payment by supplier
Your Answer
Sharing risk of Non payment by the Syndicate of Banks giving loans
True/False Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer Your Answer
It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Your Answer
True/False Question
Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them
Correct Answer
Funding Options in domestic yen market are Futures, FRAs, Call and put options. True
Your Answer
True
True/False Question Correct Answer
There is no difference between CIP and CIF contracts except the mode of transportation. True
Your Answer
True
Multiple Choice Single Answer
Question
Financial management is complex process for
Correct Answer
Companies which have international trade
Your Answer
Companies which have international trade
Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Primary activity
Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer
An Irrevocable credit
Your Answer
An Irrevocable credit
True/False Question Correct Answer
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. False
Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer
Preshipment credit , Post shipment credit , Duty Draw back
Your Answer
Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer
Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer
Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value
Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Your Answer
Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Your Answer
Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue
Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer
Buy when you are having short position
Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer? Correct Answer Your Answer
Select The Blank
He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies
Question Correct Answer
Forward margin makes a currency cheaper then the currency is at ________. Discount
Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer Your Answer
Prices of capital market instruments change and are expected to change drastically Prices of capital market instruments change and are expected to change drastically
True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer
False
Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed
Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates Select The Blank Question ________ is the agency of ICC which deals with the maritime crime.
Correct Answer International Maritime Bureau Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your Answer
Buffer Stock Facility
True/False Question
Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of payment Your Answer The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer US Dollar Your Answer
US Dollar
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Factors' values
Weightages %
Factors' values
100% of total
Select The Blank
Question
Global capital market can be understood from the study of ________.
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer
Pegged to Single currency
Match The Following Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity Last date of exercising option is delivered
Note issuance facility
Euronotes
Euronotes
Bearer security issued in currency other than that of the country of issue
Eurobonds
Eurobonds
Margin on future
Peformance bond or security Peformance bond or security deposit deposit
True/False Question
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct Answer False Your Answer
False
True/False Question
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What are margins, with reference to futures market? Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Your Answer Which enables the investor to market the same in the secondary market Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer Preshipment credit up to six months for construction and turnkey projects abroad Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily.
Correct Answer Economies Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer US Dollar Your Answer
US Dollar
Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer Control by Government' Your Answer
Recurrence
Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer Sharing of risk of non payment by supplier Your Answer
Sharing risk of Non payment by the Syndicate of Banks giving loans
True/False Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them True/False Question
Funding Options in domestic yen market are Futures, FRAs, Call and put options. Correct Answer True Your Answer
True
True/False Question
There is no difference between CIP and CIF contracts except the mode of transportation. Correct Answer True Your Answer
True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade Your Answer
Companies which have international trade
Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Primary activity
Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer True/False Question
An Irrevocable credit
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total.
Correct Answer False Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer Preshipment credit , Post shipment credit , Duty Draw back Your Answer
Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer Buy when you are having short position Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer? Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer Prices of capital market instruments change and are expected to change drastically Your Answer Prices of capital market instruments change and are expected to change drastically True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer False
Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates Select The Blank Question ________ is the agency of ICC which deals with the maritime crime. Correct Answer International Maritime Bureau Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your Answer
Buffer Stock Facility
True/False Question
Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option?
Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of payment Your Answer The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer US Dollar Your Answer
US Dollar
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Factors' values
Weightages %
Factors' values
100% of total
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer
Pegged to Single currency
Match The Following
Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity is delivered
Last date of exercising option
Note issuance facility
Euronotes
Euronotes
Bearer security issued in Eurobonds currency other than that of the country of issue
Eurobonds
Margin on future
Peformance bond or security deposit
Peformance bond or security deposit
True/False Question
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct Answer False Your Answer
False
True/False Question
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What are margins, with reference to futures market? Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers
Your Answer
Which enables the investor to market the same in the secondary market
Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer Preshipment credit up to six months for construction and turnkey projects abroad Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily. Correct Answer Economies Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer US Dollar Your Answer
US Dollar
Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer Control by Government' Your Answer
Recurrence
Select The Blank
Question
The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer Sharing of risk of non payment by supplier Your Answer
True/False Question
Sharing risk of Non payment by the Syndicate of Banks giving loans
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them True/False Question
Funding Options in domestic yen market are Futures, FRAs, Call and put options. Correct Answer True Your Answer
True/False
True
Question
There is no difference between CIP and CIF contracts except the mode of transportation. Correct Answer True Your Answer
True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade Your Answer
Companies which have international trade
Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Primary activity
Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer
An Irrevocable credit
True/False Question
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. Correct Answer False Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Your Answer
Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer Buy when you are having short position Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer
Question
What is the effect of cross currency option on the customer?
Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer Prices of capital market instruments change and are expected to change drastically Your Answer Prices of capital market instruments change and are expected to change drastically True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer False Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False
Question
Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer
True
True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer False Your Answer
False
Select The Blank Question The rate of interest on rupee finance for exports is not exceeding ________ less than PLR. Correct Answer 0.025 Your Answer
50 basis points over LIBOR
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of payment Your Answer The exercise or strike price, the amount , The expiration date and time, the method of paym ent Multiple Choice Single Answer Question In the syndicated loan arrangement the borrower has to execute :Correct Answer Single Principal loan agreement Your Answer
Single Principal loan agreement
True/False Question
At Least one principal Lender bank is essential for issue of the ADR or GDR. Correct Answer False Your Answer
True
Multiple Choice Single Answer Question US financial system is the freest system because Correct Answer Institutions can introduce new products and instuments at the price of their choice.
Your Answer
Institutions can introduce new products and instuments at the price of their choice.
Multiple Choice Single Answer Question In a coupon swap who is called the buyer? Correct Answer One who pays the fixed rate of interest Your Answer
One who pays the fixed rate of interest
True/False Question
Till August 1994 India was following the Indirect Methodof Rate quotation. Correct Answer False Your Answer
False
Select The Blank Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme. Correct Answer Overseas investment facility Your Answer
Overseas investment facility
Multiple Choice Single Answer Question Under the automatic route of Direct Investment Abroad, what is the restriction on market purchases? Correct Answer 50% of the net worth of the investing company Your Answer
50% of the net worth of the investing company
Multiple Choice Single Answer Question What are the powers of money changers? Correct Answer Purchase and sell foreign currency notes and travellers cheques Your Answer
Purchase and sell foreign currency notes and travellers cheques and also Give export finance
Select The Blank Question Any company involved in foreign exchange transactions is exposed to ________ risk. Correct Answer Currency Your Answer
Currency
Multiple Choice Multiple Answer
Question
What are the features of Settlement price ?
Correct Answer Price established by the clearing house at the end of each trading session , It is used to determine the net gain, loss, margin call and next days price limits Your Answer Price established by the clearing house at the end of each trading session , It is used to determine the net gain, loss, margin call and next days price limits Multiple Choice Multiple Answer Question What are the activities of ICC? Correct Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime Your Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime , Increased Govt regulation of Business True/False Question
Cause of increase in cost of public issues Underwriting fees , selling commission Correct Answer True Your Answer
False
Select The Blank Question The currency swaps used ________. Correct Answer To lower the risk of currency exposure Your Answer
To lower the risk of currency exposure
True/False Question
The Option period in the forward contract is at the option of the Banker, hence the bank has to be very conservative in quoting rates. Correct Answer False Your Answer
True
Multiple Choice Multiple Answer Question Which factors affect the exchange rates in short time period? Correct Answer Demand and supply, interest rates, inflation, , Sentiment, Speculation Your Answer Demand and supply, interest rates, inflation, , Sentiment, Speculation , GDP,Balance of trade and payment,Unemployment Match The Following
Question
Correct Answer
Your Answer
Departure
EXW
EXW
Main carriage paid
CFR
CFR
Main carriage unpaid
FAS
FAS
Arrival
DES
DES
Multiple Choice Multiple Answer Question Sterling Market is attractive for an international investor because Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Your Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds , Linking of issues to currency swaps True/False Question
In red clause credit some clauses are printed in Red ink.
Correct Answer True Your Answer
False
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the bid rate for USD? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Multiple Answer Question Criteria for investment abroad under automatic route :Correct Answer Activity for investment is core activity of Indian Company. , Total Financial commitment in JV/WOS as per prescribed ceiling Your Answer Activity for investment is core activity of Indian Company. , Total Financial commitment in JV/WOS as per prescribed ceiling Multiple Choice Multiple Answer Question Who can issue the Certificate of Inspection? Correct Answer Export Inspection Council , Person authorised by Importer. Your Answer
Export Inspection Council , Person authorised by Importer.
Multiple Choice Single Answer Question Large number of exporters from which country are enjoying the privilege of receiving up front cash from importers in Russia? Correct Answer United Kingdom Your Answer
United Kingdom
True/False Question
In developed markets, speculators play important role in determining the trend of currency rates. Correct Answer True Your Answer
True
Select The Blank Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________. Correct Answer Shelf Registration Your Answer
Shelf Registration
Select The Blank Question In Overseas market the forward rate is generally quoted on the basis of ________. Correct Answer Fixed date Your Answer
Calendar month
Select The Blank Question Forward Margin makes a currency costlier then the currency is at ________.
Correct Answer Premium Your Answer
Discount
Multiple Choice Multiple Answer Question These are the parties to the documentary credit :Correct Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bank Your Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bank Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Multiple Choice Single Answer Question Fixed, Floating or Limited flexibility are used in the context of Correct Answer Exchange Rates Your Answer
Exchange Rates
Select The Blank Question In mid 1992 ________ rejected the ratification of Maastricht treaty Correct Answer Denmark Your Answer
UK
Multiple Choice Multiple Answer Question Under the liberalisation through FEMA, what can an AD offer to the clients, without the prior permission of RBI or Government? Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Your Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Multiple Choice Single Answer Question To whom is an AD required to report the cancellation of forward contracts? Correct Answer No one at all. Your Answer
To Reserve Bank of India, fortnightly
Select The Blank Question ECGC provides cover to an Indian contractor for construction work abroad under ________. Correct Answer Construction works policy Your Answer
Export Performance Guarantee
True/False Question
The Negotiating bank examines the documents submitted by the seller and makes payment if they comply the terms and conditions of the LC. Correct Answer True Your Answer
True
Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Multiple Answer Question What are the sources of raising funds for exports? Correct Answer Suppliers credit , Forfaiting Your Answer
Suppliers credit , Forfaiting
Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount Your Answer
Discount
Multiple Choice Single Answer Question Name the common forex derivatives :Correct Answer Options, futures Your Answer True/False Question
Options, futures
Country risk analysis is a futile exercise in the background of cost of analysis.
Correct Answer True Your Answer
False
Select The Blank Question Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer
OECD
Match The Following Question Issues linked with LIBOR,LIBID,LIMEAN
Correct Answer
Your Answer
FRNs
FRNs
Issue of bonds without FloatingRate Note fixed rate of interest, linked to short term interest rate in the global market
FloatingRate Note
Issue of loans Syndicated Loans internationally,through arranger, underwriter,co manager, for a large amount for sharing risk of lending
Syndicated Loans
Equity issues in the American or Global foreign markets either as Depository Receipts direct investments or portfolio investments.
American or Global Depository Receipts
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single Answer Question Proforma Invoice, Commercial Invoice, Consaular Invoice are which type of documents? Correct Answer Commercial Documents Your Answer True/False Question
Commercial Documents
Charter party bills of lading are generally not acceptable to bankers as security because Sea Charters are full of problems.
Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question Why does a Transaction exposure arise? Correct Answer Trading flows , Dividend or capital flows Your Answer
Trading flows , Dividend or capital flows
Multiple Choice Single Answer Question If a dealer of securities is quoting rate as 200-250 then the rate 200 signifies which rate with reference to him? Correct Answer Bid rate Your Answer
Bid rate
Select The Blank Question A Documentary credit issued on the strength of another documentary credit is known as ________. Correct Answer Back to Back credit Your Answer
Back to Back credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations True/False Question
Tranche' is a managed issue of securities in smaller denominations. Correct Answer True Your Answer
False
True/False Question
Funding Options in domestic yen market are Futures, FRAs, Call and put options. Correct Answer True Your Answer
True
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Multiple Answer Question Which events can lead to materialisation of country risk? Correct Answer Change in Government policies , Change in Government rules and laws Your Answer Change in Government policies , Change in Government rules and laws , Unpredicted Earthquake, Tsunami waves Multiple Choice Multiple Answer Question What is a 'speculator'? Correct Answer Trader who is neither hedger nor arbitragor , He takes risks for profit Your Answer Trader who is neither hedger nor arbitragor , He takes risks for profit Select The Blank Question The major industrial power whose economy was not affected after the II world war was ________. Correct Answer USA Your Answer
USA
Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Multiple Choice Multiple Answer Question What do you understand by Commercial Risk? Correct Answer Protracted default by the buyer , Insolvency of the buyer Your Answer
Protracted default by the buyer , Insolvency of the buyer
Select The Blank Question Legalised invoice is also called ________ invoice. Correct Answer Visaed
Your Answer
Visaed
Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer
Monday
True/False Question
The American Dollar market comprises of the domestic segment of USD the offshore segment of USD. Correct Answer True Your Answer
True
Match The Following Question
Correct Answer
Your Answer
LastStage
Form a single currency
Meet in Maastricht in Netherland
The First stage in the Free movement of capital Establish EURO Bank Europeand and Monetary in EC Union (EMU) Stage II in EMU
Establishment of European Monetary Institute
Establishment of European Monetary Institute
Stage III in EMU
Members to meet the convergence criteria and fix the exchange rates
Members to meet the convergence criteria and fix the exchange rates
Select The Blank Question Under the ________ standard the Country's Central Bank promised to buy back the currency at certain rate of Gold. Correct Answer Gold Your Answer
Gold
True/False Question
An Indian exporting goods to New York receives dollars in New York. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer
Question
The factors which affect the performance of an option are:-
Correct Answer Underlying asset price , Time before expiration, rate of interest Your Answer
Underlying asset price , Time before expiration, rate of interest
Multiple Choice Multiple Answer Question Which contracts are used for transportation by road? Correct Answer FCA , CPT Your Answer
FCA , CPT , CFR
True/False Question
Bid rate is bidders buying rate and offered rate is bidders selling rate. Correct Answer True Your Answer
False
Match The Following Question
Correct Answer
Cancellation of contracts ECD above USD 500000
Your Answer ECD
Forward Purchase contract currency at premium
Presume earliest delivery Presume earliest delivery
Forward purchase contract currency at discount
Presume latest delivery
Presume latest delivery
Exchange margins
FEDAI
FEDAI
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer
Other managed Floating
Multiple Choice Multiple Answer Question Which two countries were included to convert the group of five into the group of seven? Correct Answer Italy , Canada Your Answer
Canada , Italy
Multiple Choice Single Answer Question Who can open an EEFC account? Correct Answer Individuals , firms, companies, resident in India Your Answer
Individuals , firms, companies, resident in India
Multiple Choice Single Answer Question Method of advance payment is not disadvantageous to :Correct Answer The seller Your Answer
The seller
Multiple Choice Single Answer Question What is the immediate cause for the growth of futures and options in the last two decades? Correct Answer Increase in volatile trading conditions Your Answer
Increase in volatile trading conditions
Multiple Choice Single Answer Question What do you mean by a derivative? Correct Answer One which has been derived from other fundamental instruments Your Answer Derived from Mathematical expressions Multiple Choice Single Answer Question "Currency Snake" Correct Answer Plus or minus movement of exchange rate around the parity rate Your Answer
Currency of European Country in the early 70's
True/False Question
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct Answer False Your Answer
False
Multiple Choice Single Answer Question In which currency can the EEFC account be opened? Correct Answer Any Convertible currency
Your Answer
Any Convertible currency
Multiple Choice Multiple Answer Question Criteria for Direct investment abroad under normal route :Correct Answer Viability of the proposal, and excellent track record of business , Experience and expertise of promoters, benefit to the country Your Answer Total Financial commitment in JV/WOS as per prescribed ceiling , Activity for investment is core activity of Indian Co. Select The Blank Question ________ enables bankers to extend purchase, negotiation or discount of export bills. Correct Answer Post shipment credit guarantee Your Answer
Post shipment credit guarantee
Multiple Choice Single Answer Question For setting up a joint venture or WOS abroad, Indian banks operating in India need a clearance :Correct Answer Under Banking Regulation Act Your Answer
Under Banking Regulation Act
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade Your Answer
Companies which have international trade
True/False Question
Indian companies are now allowed to freely invest abroad up to $1.5 million, raised through GDE or EEFC without prior permission from RBI. Correct Answer False Your Answer
False
Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer True/False
American Dollar
Question
Terms in an Irrevocable credit can not be alterred at all.
Correct Answer False Your Answer
True
Select The Blank Question Position in a currency is said to be ________, when sales equal purchases. Correct Answer Square Your Answer
Square
Multiple Choice Multiple Answer Question How is the entry into any conuntry's money market or capital market is restricted? Correct Answer Because of different tax systems , Because of different credit standards Your Answer Because of different tax systems , Because of different credit standards Select The Blank Question The currency notes and coins of individual countries participating in "Euro" have ceased to be a legal tender from ________. Correct Answer 2002 Your Answer
2002
Select The Blank Question Partnership firm not eligible for Overseas Direct Investment needs to apply to RBI Approval in form ________. Correct Answer ODI Your Answer
ODI
Multiple Choice Single Answer Question Where does the word derivative originate from? Correct Answer Mathematics Your Answer
Mathematics
Select The Blank Question To make the export more competitive and remunerative, the Indian Govt extends ________ facility. Correct Answer Cash Incentives
Your Answer
Cash Incentives
Multiple Choice Single Answer Question The financial system of any country consists of Correct Answer Network of commercial banks, domestic and foreign investment banks, NBFCs, etc Your Answer The Central bank, IMF and world bank
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Select The Blank Question Association of several scheduled commercial banks for forex business is ________. Correct Answer Foreign Exchange Dealers Association of India Your Answer
Foreign Exchange Dealers Association of India
True/False Question
Installment credit is issued for specific quantities of goods to be shipped every week or month. Correct Answer True Your Answer
True
Select The Blank Question Combined Certificate of Origin and Value are required by ________. Correct Answer Commonwealth Countries Your Answer
Commonwealth Countries
Select The Blank Question The creditworthiness of the futures seller and the futures buyer is ________ because of the presence of the Futures exchange. Correct Answer Irrelevant Your Answer
Irrelevant
Select The Blank Question When interest rate changes by 0.05 per cent then it has changed ________ basis points. Correct Answer 50 Your Answer
5
Multiple Choice Multiple Answer Question What were the primary objectives of the group of seven countries? Correct Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries Your Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries Multiple Choice Multiple Answer Question The crisis in global capital market in 2002-04 was due to Correct Answer Collapse of Enron , Collapse of Argentina's currency board , The war against terrorism Your Answer Collapse of Enron , Collapse of Argentina's currency board Multiple Choice Multiple Answer Question Mr A sells an option conferring the right to buy a kilogram of silver at Rs 8000/- for next six months means :Correct Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, in next 6 months, even if the price goes up, , The buyer of option can sell silver to Mr A at 8000/- per Kg, in next 6 months, even if the price goes down. Your Answer The buyer of option can buy silver from Mr A at 8000/- per Kg, in next 6 months, even if the price goes up, , Mr A has choice of selling or not selling silver on his own Multiple Choice Multiple Answer Question Major investors in NIF are :Correct Answer Commercial Banks , Non banking Finance companies , Insurance Companies Your Answer Commercial Banks , Non banking Finance companies , Insurance Companies True/False Question
With the advent of futures and Options there is no need for additional instruments of risk hedging. Correct Answer False Your Answer
False
Select The Blank Question During the fixed rate exchange system prevailing in India, the intervention currency was ________. Correct Answer Sterling Pound Your Answer
USDollar
Multiple Choice Single Answer Question What help does EXIM Bank provide under the scheme 'Direct Financial assistance to exporters'? Correct Answer Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer Your Answer Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer Multiple Choice Single Answer Question What is a bill of lading? Correct Answer Transport document representing movement of goods by water. Your Answer
Transport document representing movement of goods by water.
Multiple Choice Single Answer Question Which controls are not permitted by IMF? Correct Answer Current account controls Your Answer
Exchange controls
Multiple Choice Multiple Answer Question What are the objectives of International Chamber of Commerce? Correct Answer Champion the global economy as a force of economic growth , Creating of job and prosperity Your Answer Champion the global economy as a force of economic growth , Creating of job and prosperity True/False Question
Yankee bond is issued for domestic borrowers.
Correct Answer False Your Answer
True
Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market True/False Question
An AD can book a forward contract for a part of the amount of Sale Contract
Correct Answer True Your Answer
False
True/False Question
Sterling FRNs are issued in Europe, USA ,Asia
Correct Answer False Your Answer
True
Match The Following Question Bond basis to money market basis
Correct Answer
Your Answer
Bond basisx 360/365
Bond basisx 360/365
3 months LIBOR +2 % PA Floating rate
Floating for floating rate currency swap
15% P.A.
Fixed rate
Fixed rate
Money market basis to bond basis
Money market basis x 365/360
Money market basis x 365/360
Select The Blank Question In Indian interbank market forward rates are generally quoted on the basis of ________. Correct Answer Calendar month Your Answer
Calendar month
Multiple Choice Single Answer Question In case of syndication of loans the amount of loan and currency is finalised by :Correct Answer Borrower Your Answer
Underwriter of the syndicate
Multiple Choice Single Answer Question European currency Unit Correct Answer Basket of Currencies of members of EMS Your Answer
Basket of Currencies of members of EMS
Select The Blank Question The counter party in option is ________.
Correct Answer The exchange Your Answer
Trustworthy corporation, who hedges the risks of market uncertainty
Multiple Choice Single Answer Question A Spot Transaction between Japanese Yen and Sterling carried out on Friday in Singapore, the settlement day will be Correct Answer Following Tuesday if it is a working day in all the three centers Your Answer
Following Tuesday if it is a working day in all the three centers
Select The Blank Question EEFC account holder is allowed to have ________ facility. Correct Answer Cheque book and nomination Your Answer
Cheque book and nomination
Multiple Choice Multiple Answer Question A Usance bill of exchange may be drawn in 2 ways. Which are they? Correct Answer Documents against payment , Documents against acceptance Your Answer
Documents against payment , Documents against acceptance
Multiple Choice Single Answer Question Why have futures and options come into existence? Correct Answer To avoid business risk. Your Answer
To avoid business risk.
True/False Question
In an interest rate swap if the payment schedules are identical, only diffrence between the two payments is delivered. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What are the main causes of fluctuations in Exchange rates? Correct Answer Market demand and supply, sentiments , Government regulatios, fiscal policies, political instabilities Your Answer Government regulatios, fiscal policies, political instabilities , Market demand and supply, sentiments , The purchasing power of currency changes every second
Multiple Choice Single Answer Question What do you understand by a swap? Correct Answer 2 counter parties agree to exchange streams of payments over a period of time Your Answer 2 counter parties agree to exchange streams of payments over a period of time True/False Question
Import finance is nomally available at rates of interest cheaper than domestic finance rates. Correct Answer False Your Answer
False
Multiple Choice Single Answer Question A weight list, a packing list used in international trade are which type of documents? Correct Answer Operational Documents Your Answer
Operational Documents
Multiple Choice Multiple Answer Question What do you understand by 'Foreign Exchange Risk'? Correct Answer The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows Your Answer The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer Preshipment credit beyond six months for construction and turnkey projects abroad Multiple Choice Single Answer Question Which Indian Co. is not eligible to make investment abroad under automatic route? Correct Answer Co which is caution listed by RBI Your Answer True/False
Co which is caution listed by RBI
Question
Naked position is when investor does not hedge against market risk. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question In DAF, the frontier means :Correct Answer Frontier of exporter's country , Frontier of importer's country Your Answer
Frontier of exporter's country , Frontier of importer's country
Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer
USD 1 trillion
Match The Following Question
Correct Answer
Your Answer
European option
On or after maturity
On or after maturity
Out of money
Loss
Profit
In the money
Profit
Loss
American option
Before maturity
Before maturity
Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
True/False Question
PP Form is required when exports are made to any country by post parcel on value payable basis. Correct Answer False Your Answer
False
Select The Blank
Question
When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Core activity
Multiple Choice Single Answer Question How many Countries participated in the third survey on Foreign Exchange, coordinated by BIS in 1992? Correct Answer 26 Your Answer
26
Select The Blank Question Indian Co. intending to make investment under Automatic route needs to submit form ________ to RBI with enclosures. Correct Answer ODA Your Answer
ODA
Multiple Choice Single Answer Question In International trade, Advance payment means :Correct Answer Providing up front cash Your Answer
Providing up front cash
True/False Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True Your Answer
True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question Which functions does the Bill of Lading serve? Correct Answer It is a document of title to goods. , It is receipt of goods Your Answer It is a document of title to goods. , It is receipt of goods Multiple Choice Single Answer Question A Bank quotes interest rate of 9.50/10.00 for six months dollar deposit, here the bid rate is :Correct Answer 9.50% P.A.
Your Answer 9.50% P.A. Multiple Choice Single Answer Question What is Sovereign Risk? Correct Answer Risk of lending to the government of a country Your Answer Risk of lending to the government of a country Multiple Choice Single Answer Question How does ICC help poor countries? Correct Answer Attract Foreign Direct investments togeather with UNCTAD Your Answer Attract Foreign Direct investments togeather with UNCTAD Multiple Choice Multiple Answer Question As per BIS, recovery from the recent crisis in global capital market was mainly due to Correct Answer Rapid and appropriate policy response in US and other countries , Increase in Foreign Direct Investments , free flow of credit Your Answer Rapid and appropriate policy response in US and other countries , Increase in Foreign Direct Investments , free flow of credit True/False Question Out of 15 member countries in European Union 12 countries commiteed themselves for a single currency. Correct Answer False Your Answer True True/False Question In red clause credit some clauses are printed in Red ink. Correct Answer True Your Answer True True/False Question Transfer of funds for investment abroad is allowed freely. Correct Answer True Your Answer False Select The Blank Question EEFC account holder is allowed to have ________ facility. Correct Answer Cheque book and nomination Your Answer Credit card, safe custody, safe deposit locker without any fee Select The Blank Question Fixed interest rate Eurobond without the option to convert to equity is known as ________. Correct Answer Straight Debt
Your Answer Interest rate swap True/False Question An Indian importing goods from USA pays dollars in India. Correct Answer False Your Answer True Match The Following Question Correct Answer Your Answer PP Form Export Declaration form Export Declaration form Health Certificate Fumigation certificate Export Declaration form Certificate of Inspection As per importers requirement Export Declaration form Certifiate of Origin Export Promotion Council Export Declaration form Multiple Choice Multiple Answer Question For issuing a Documentary credit The applicant is required to provide to the issuing bank details about Correct Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents Your Answer The purchase-sales contract, the mode of payment, the tenor of payment , The track record of the buyer and seller Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given on behalf of a certain person to another person in different country , It is a stamped agreement and is not valid unless it is signed by the issuer True/False Question CFR = FOB plus freight paid by seller + insurance paid by seller. Correct Answer False Your Answer True Select The Blank Question Even after liberalisation of exchange
controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer OPEC True/False Question Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer True Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your Answer Supplemental Reserve Policy Multiple Choice Multiple Answer Question What are the sources of raising funds for exports? Correct Answer Suppliers credit , Forfaiting Your Answer Suppliers credit , Forfaiting , Buyers credit , Foreign currency or Rupee finance True/False Question Normally the forward contracts are booked for making huge profits. Correct Answer False Your Answer False True/False Question Head office of ICC is in Paris because of its First President Eliance Clementel. Correct Answer True Your Answer False Select The Blank Question A ________ Bill of lading does not specify the terms and conditions of carriage. Correct Answer Short Form Your Answer Short Form Multiple Choice Single Answer Question What is the volume of the world's total speculative transactions? Correct Answer Roughly 90 % of the total turnover Your Answer 70% of the total turnover True/False Question Till August 1994 India was following the Indirect Methodof Rate quotation. Correct Answer False Your Answer False
Select The Blank Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme. Correct Answer Overseas investment facility Your Answer Overseas investment facility Multiple Choice Single Answer Question Mr P has exported goods in May 2005 and is expecting payment of Euro 25000 by the last week of Sept 2005. Give details of the forward contract he can book :Correct Answer He can book a sale contract any time from May 2005 till Mid Sept 2005, for Euro 25000 or less, for maturity last week of Sept. Your Answer He can book a contract for Forward Purchase, any time from May 2005 till Mid Sept 2005, for Euro 25000 or less, for maturity last week of Sept. Select The Blank Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________. Correct Answer Shelf Registration Your Answer Shell Registration Multiple Choice Multiple Answer Question Which common details will be available in any bill of Lading? Correct Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment Your Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment , The name of the vessel , The date of transportation and contract of transportation Select The Blank Question Under the ________ standard the Country's Central Bank promised to buy back the currency at certain rate of Gold. Correct Answer Gold Your Answer Interest Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer ADRs Select The Blank Question The type of trade where a country sells orange juice in return for cars is known as ________. Correct Answer Counter Trade Your Answer Non money trade
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment to EOUs in India for services rendered by them , Payment of Gifts of GBP 5000 per year per donor Multiple Choice Multiple Answer Question Under the liberalisation through FEMA, what can an AD offer to the clients, without the prior permission of RBI or Government? Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Your Answer Caps and collars, and forward rate agreements , Good and competitive exchange rates and cross currency rates Multiple Choice Multiple Answer Question Sterling Market is attractive for an international investor because Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Your Answer Choice of issuing medium term and long term bonds , Less controls and less formalities to be completed , Linking of issues to currency swaps Multiple Choice Single Answer Question Under which contracts the seller pays the import duty for the buyer? Correct Answer DDP Your Answer DDP True/False Question PP Form is required when exports are made to any country by post parcel on value payable basis. Correct Answer False Your Answer True Multiple Choice Multiple Answer Question What were the immediate causes of converting the group of 5 into group of 7 and convene their meeting in late 1985? Correct Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased Your Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased , The heads of G5 insisted to have a meeting , Failure of IMF to control
the exchange rates Multiple Choice Single Answer Question What are the powers of money changers? Correct Answer Purchase and sell foreign currency notes and travellers cheques Your Answer Purchase and sell foreign currency notes and travellers cheques, give import and export finance Multiple Choice Single Answer Question Who can open an EEFC account? Correct Answer Individuals , firms, companies, resident in India Your Answer Individuals , firms, companies, resident in India Multiple Choice Single Answer Question What is the role of ICC towards WTO? Correct Answer To provide world business recommendations to WTO Your Answer To further the cause of WTO Match The Following Question Correct Answer Your Answer Swap price Difference in prices of two legs of buying and selling Quoting rate for both buying and selling a currency Euro Market Market in Euro currencies Market in Euro currencies Making market Quoting rate for both buying and selling a currency Difference in prices of two legs of buying and selling Spread Price difference between bid and offer Maket of 'Euro' Select The Blank Question Position in a currency is said to be ________, when sales equal purchases. Correct Answer Square Your Answer Awkward Select The Blank Question Hotels and Airline companies are allowed to receive payments in Indian rupees from foreign tourist without insisiting on ________. Correct Answer Encashment certificate Your Answer Encashment certificate Multiple Choice Multiple Answer Question Why is Bill of Exchange a Quasi
Negotiable Instrument? Correct Answer It represents title to goods , It is issued under Sale of Goods act Your Answer It represents title to goods , It is issued under Transportation act , It is issued under Bill of exchange act Multiple Choice Single Answer Question Which details about forward contracts do the Exchange Controls verify ? Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000 Your Answer Details of all contracts booked and cancelled beyond a specified limit Multiple Choice Single Answer Question In the context of International economy ,the period between 1920s and 1930s is known as Correct Answer Great Depression Your Answer Great Depression Multiple Choice Multiple Answer Question What do you understand by Commercial Risk? Correct Answer Protracted default by the buyer , Insolvency of the buyer Your Answer Protracted default by the buyer , Insolvency of the buyer
Chapter – 1 – Introduction to international capital markets Euro currency ; domestic markets ; US Japan ; Switzerland ; UK ; Australia ; Canada ; European ; centers in ECU; Chapter – 2 – International Finance Markets - the U.S. dollar Market ; The U.S. Dollar Market ; The Japanese Yen Market ; The Sterling Market ; The Euro Market Has Been discussed in the next chapter ; Recent development in international Finance Markets ; Chapter – 3 – International Monetary and Financial System The country’s central ban agreed to buy back their currency at a certain rate of gold; Melting down of gold was freely allowed ; There was unrestricted movement of gold (i.e. import and / or export) The total money supply in the country was determined by the quantum of gold reserves in the country The international monetary fund ; quotas ; funding facilities ; regular facilities tranche policies ; restore Tranche credit Tranche ; extended arrangement (extended fund facility (EEF) ; Standard Arrangement (enlarged Arrears Policy) Special facilities (compensatory and contingency financing facility (CCFF) Buffer stock Financing Facility ; Supplemental Reserve Policy (SRP); Reserve Tranche ; Credit Tranche ; Stand by arrangement ;
1 5 – 10
13 – 14
15 – 17
Extended arrangement or extended fund facilities (EFF) special facilities ; CCFF ; Buffer stock financing Facility (BSFF) ; Supplemental resources facility (SRF) Enhanced structural adjustment facility (ESAF) The fixed exchange rate system Problems faced by the fixed exchange rate system ; failure of fixed rate system ; the European monetary system (EMS) ; Economic and monetary union ; Recent developments ; post – Maastricht developments; emergence of EURO The group of seven ; special drawing rights (SDRS) ; The liquidity problems (SDRS) ; the world bank group ; the world bank; international development agency (IDA) ; international finance corporation (IFC) ; The multinational investment Guarantee Agency (MIGA) Chapter – 4 – External commercial borrowing – country ; company ; Equity ; Fund raising ; underwriting ; hedging ; arbitraging ; note issuance facility ; Mechanism and documentation ; syndicated loans ; floating rate notes ; Flip – Flop FRN ; MIS – Mich FRN ; MINI Max FRN ; Capped FRNs, Perpetual FRNs; VRN structured FRNs; Terms and conditions of FRN Ero Commercial paper (ECP) ; ADRs and GDRs; GDR – Global depositary Receipts ; The roles of different parties involved in launching of GDR GDR – Global Depositary Receipts ; The roles of different parties involved in launching of GDR steps involved in issuance of GDR are as follows Pricing and Closing ; costs ; Advantages & Disadvantages of external commercial borrowing Chapter – 5 – Documents used in International Trade ; Regulatory requirements ; operational requirements ; commercial documents ; financial documents transport documents ; risk covering documents ; official / regulatory documents ; miscellaneous documents ; Commercial documents ; proforma invoice ; commercial invoice ; consular invoice customs invoice ; legalized invoice ; combined certificate of origin and value ; financial documents ; bill of exchange ; The second of the same tenor and date unpaid ; the first of the same tenor and date unpaid ; or similar words ; sight B/E; Tenor ; time B/E; DP Basis ; document against Payment Basis ; Documents against Acceptance Basis Transport documents; bill of lading ; received for shipment bill of lading ; on board bill of lading ; Short form bill of lading ; long form bill of lading clean bill of lading ; claused bill of lading ; through bill of lading ; straight bill of lading ; charter party Bill of lading ; container bill of lading container bill of lading ; combined transport B/L or Mulit Modal B/L lash bill of lading house bill of lading ; Airway bill ; Air consignment Note ; House Air way bill ; Postal Receipt ; Courier /Expected delivery service ; multimodal transport document ; risk covering documents ; insurance policy ; Insurance cover note ; official documents export declaration forms ; export certificate; Certificate of origin ; Miscellaneous documents ; packing list ; weight certificate ; certificate of analysis and quality ; certificate of inspection ; health certificate ; phytosanitary / Radiation / Fumigation Chapter 6 – Methods of payment ; advance payment ; bill for collection ; open account ; barter trade ; bank guarantee ; letter of credit (L / C) Seller wants buyer wants ; parties to a documentary credit ; applicant issuing bank advising ; confirming bank beneficiary ; negotiating bank ; reimbursing bank Types of letters of credit ; revocal letter of credit ; irrevocable letter of credit ; confimed irrevocable letter of credit ; transferable l / c revolving letter of credit ; credit available by installments; back to back letter of credit ; anticipatory credit or red clause letter of credit ;
18 – 19 20 – 23 24 – 27 31 – 35 36 – 39
40 – 41 43 – 46
47 – 49
50 – 53
55 – 57
61 – 66
67 – 69
green clause letter of credit ; deferred payment letter of credit ; standby letter of credit ; flow chart of export transaction under letter of credit Flow chart of export transaction under letter of credit ; various steps in the transaction are as under ; steps no. description Chapter 7 – Export / Import Finance ; - Part I import finance ; import financing through trust receipts / import loans ; import financing through issuing l/ c or bank guarantee ; part II – Export Finance Timely ; adequate ; cheaper on liberal terms ; sources for raising finance ; own funds ; 2 friends and relative ; 3 advance payment from buyer ; 4 Trade credit from suppliers 5 banks and financial institutions ; pre-shipment credit (P.C) Post shipment credit ; advance agains t cash incentives / duty draw back ; forfeiting ; rediscounting of export bills abroad ; buyer’s credit ; supplier’s credit Chapter – 8 – Procedure in connection with foreign investment in India – Seciton – I foreign direct investment ; FERA ; the practice at which a company can issue shares to non residents ; fema ; esop ; section II – Foreign technical collaboration ; General Hotel & Tourism Related Industries ; procedure for granting approval; I / We hereby certify that ; Documentation ; Standard conditions attached to approval for technology agreement ; no objection ; the agreement shall be subject to Indian laws: Section – III – Portfolio investment ; explanation ; the regulations regarding portfolio investments by NRIs / PIOs are as under ; NRI / PIOs ; Section – IV – Other investments ; Section V – procedure for opening branch / project / Liaison office ; Chapter – 9 – Direct investment outside India – overseas investment division TDR ADR GDR the criteria for investment under the automatic route are as under ; JV/WOS; ODA; The schemes for overseas investment by partnership firms ; criteria for overseas investment by a registered partnership firm under the automatic route ; The procedure to be followed by a partnership firm for making investment under the automatic route ; the procedure to be followed by partnership firms which are not eligible under the automatic route ; restrictions for setting up of a second generation company ; resident individual India can acquire foreign securities without prior approval in the following cases ; provided that ; WOS Chapter – 10 – Taxation ; Bilateral relief Unilateral relief ; for the purpose of this provision Part – 2 Forex risk management and hedging techniques Chapter – 1 Foreign exchange markets – The international Market ; survey were ; the market ; the participants ; information and communication system ; the payment system ; the foreign exchange market in India Chapter – 2 – Exchange Rates – Exchange rage quotes ; direct and indirect rates ; direct rates ; indirect rates; spot and forward rates value rate; ready or cash ; value today ; TOM; spot ; forwards; glossary of market terms; Foreign exchange risks ; transactions exposure ; translation exposure ; economic exposure; Translation – moving towards a consensus ; economic exposure ; an overview ; scenario exchange rages in India ; Inward remittances export encashment of foreign currency travelers cheques ; encashment of foreign currency notes; outward remittances ; imports ; issuing foreign currency travelers cheques issuing foreign currency notes ; Type of transaction exchange rate nomenclature ; Factors affecting movement of exchange rates ; summary
70 – 71 73 – 74
75 -76 79 – 83 84 – 88 89 - 92 95 – 99
100 – 102
105 – 106 109 – 114 117 – 123
124 – 127
128 – 129
Chapter – 3 – Forward contracts - Forward cover for merchants – forward purchase cover forward sales contract - repayment of foreign currency loans – period of delivery – cross currency booking (sale / Purchase ) ; utilization of the forward cover ; cancellation ; calculation of exchange rates for forward contracts Cancellation ; early delivery and rollover of forward contracts ; forward sale contracts ; forward purchase contract ; early delivery ; rollover charges Chapter 4 – Options and Futures – History and development ; recent trends ; key features of options and futures ; premium ; maturity or expiration date ; exercise ; in the money ; at the money ; out of the money American option European option ; underlying asset price time before expiration ; underlying asset price ; time before expiration the rate of interest volatility Pricing and analysis ; pricing of options ; underlying asset price ; exercise price ; options and futures products today ; interest rate options ; foreign exchange options and futures ; equity linked options ; commodity linked futures and options Chapter – 5 - Swaps What are swaps ; interest rate swaps ; lowering financial cost ; hedge exposure to interest rate risk ; restructuring the debt in the balance sheet ; amortizing and accreting swaps ; forward swaps ; Reversible swaps ; basis swaps Currency swaps ; lowering funding cost ; entering restricted capital markets ; reducing currency risk ; supply demand imbalances in the markets ; amortizing currency swaps ; accreting currency swaps ; floating – for floating rate currency swaps ; interest payments ; asset swaps PART 3 – AGENCIES INVOLVED IN INTERNATIONAL TRADE Chapter – 1 – Export import Bank of India ; Functions of Exim Bank ; the exim bank performs the following functions ; incidental functions ; operations programmes ; direct financial assistance to exporters ; consultancy and technology services ; pre-shipment credit ; facilities for export – oriented units ; overseas investment facility buyer credit facilities for deemed exports small scale industry export bills rediscounting; the latest new schemes in operation since 1992 are the following Chapter – 2 – Reserve Bank of India Exchange controls in India – RBI as the exchange control authority ; Authorized dealers (Ads) ; Money changers ; other receipts ; payment for imports ; other payments ; delegation to Ads; securities ; foreign currency accounts; liberalization of exchange control Sodhani Committee Recommendations ; Exchange rate management ; Chapter – 3 – Foreign Exchange dealers association of India ; Uniform customs and practice for collection ; Chapter 4 – International chamber of commerce – ICC – WCF – IBCC – WCF Chapter – 5 – Export credit guarantee corporation of India ; ECGC; need for export credit insurance ; credit insurance policies ; scr or standard policy ; turnover policy ; small exporter policy ; specific shipment policy (short term); buyer wise policy ; specific policy for supply contract insurance cover for buyer’s credit and line of credit Services Policy ; construction works policy ; maturity factoring ; Guarantees to banks ; packing credit guarantee ; export production finance guarantee ; post – shipment credit guarantee ; export finance guarantee ; export performance guarantee; export finance (overseas lending ) Guarantee Part – 4 – Miscellaneous Chapter 1 – Exchange Earner’s foreign currency (EEFC)
131 – 137
138 – 141 143- 147
148 – 152 155 – 157
158 – 161
163 – 166
169 – 173
174 – 177 179 – 180 183 – 183 189 – 190
191
195
Status holder exporter ; individual professional ; others; permissible credits ; permissible debits ; Chapter 2 – Country Risk ; Quantifying country risk ; A comprehensive example ; use of country risk ; assessment ; Chapter 3 – International capital Budgeting - The Basic Frame work Chapter 4 – Incoterms – Group E departure EXW ; Group F Main carriage unpaid ; FAS ; FOB ; CFR ; CIF ; CPT ; CIP ; Group C; Group D ; Arrival DAF ; DES ; DEQ; DDU CTD / MTO ; DDP ; delivered duty paid (CTD / MTO) Chapter – 5 – Actuals ; arbitrage ; bankers’ acceptance bond (BAS) ; Bearer Bond ; Bid rate ; Bond ; Bull; call option ; caps ; cash commodity ; cash market ; cedel ; certificate of deposit (CD) class of option ; closing price ; commission ; commercial paper (CP) ; contract specifications ; convertible bond ; coupon ; cover; delivery ; delivery month ; equity ; equity swaps ; equity collar ; Eurobond ; Euro clear ; euro commercial paper; euro –currency ; Exercise price ; expiration date; floating rate note ; fundamental Analysis ; futures contract hedge ; Hybrid ; Interest Rate swap; Intermediation ; Intrinsic Value ; Libor ; Long margin ; margin call maturity naked position ; note issuance facility (NIF) Option ; overbought ; oversold ; physical market ; position ; premium purchaser ; put option ; settlement price short ; speculator ; strike price ; straight debt tap ; technical analysis tranche ; tombstone volatility ; volume ; withholding tax ; yankee bond ;
Chapter – 1 – Introduction to international capital markets
1
Ero currency market ; Domestic market ; US, Japan Switzerland ; uk, australia canada ; european conters in ECU ; Euro ; Asian doller market ; forex marker SDR ; ECU ; US dollar ; German ; Swiss ; Japanees ; France ; Canada ; Australia; Chaper - 2 - International financial Markets - The U.S.Dollar Market ; pricing ; federal reservice board; curency ; central bank of US ; The Japanese Yen Market ; Mof; Long Term Prime Rate ; 1970 japanese The Sterling Market ; 20th 19th century 1979 ; OECD Organization for economic co-operation & development EMS Exchange rate Mechanism; FRN ; Bulldog; the EURO Market has been discussed in the nex chapter Recent development in international financial markets ; septer 11 enron LtCN (Long term capital Management Brazil china and mexico; 1990 ; 1980 ; severe tests financial system; securitization forces banks ; attractive to browwerw; legal issues flexibility ; financial market development segement of ; swaps cash flow ; roject related; gain access to international ; marketability ; new financing techniques;
10
Chapter – 3 – International Monetary and Financial System
13
1945 ; 1944 ; intenrational world Bank for reconstruciton and development; second world war was european ; IMF International Monetary Fund; Gold standard first world war The country's Central Bank agreed to buy back their currency at a certain rate of gold; melting down of gold was freely allowed There was unrestricted movement of gold (I.e. import and / export The total money supply in the country was determined by the quantum of gold reserves in the country 1870 ; 1914 ; 1821 ; 1834 ; 1870 ; European countries gold standard in 1933 ; 1930 International Monetary Co-operation ; IBRD ; IMF ;
1 2 5 6 7 7 8 9
13 13 13 14 14 14
199 203 – 204 207- 212 215 – 217
218 -219 220 – 221
popularly known as world bank IMF ; the international monetary fund 1945 ; 1971 ; 25 years ; aims SDR ((special drawing rights ) 25% 1960 ; 1963 ; Gross domestic product; 5 years ; SDR 146 bn to SDR 212 ; 45% ; 1998 ; Two parts Funding Facilities ; Regular Facilities ; Special facilities ; restore tranche credit tranche ; compensatory and contingency financing facility (CCFF) ; Extended arrangement (Extended Fund Facility EEF) ; Buffer stock Financing Facility ; Standard Arrangement (Enlarged Arrears Policy ) ; Supplemental Reserve Policy (Supplemental Reserve Policy (SRP Reserve Tranche ; Credit Tranches ; Stand - By Arrangement Extended arrangement or extended fund facilities (EFF) Special Facilities ; CCFF ; Buffer Stock Financing Facility ; BSFF ; Supplemental Resource Facility (SRF) ; 1997 Enhance Structural Adjustment Facility (ESAF) ; The fixed exchange rate system US dollars 35 ounce of gold Problem faced by the fixed exchange rate system ; 1960 ; value apprehension ; delay in adjustment failure of fixed rate system ; the european monetary system (EMS) European Community Currency Snake ; 1973 ; EMS EC ECU European Currency Unit ; SDR ; ERM ; DM ; matrix german bundesbank EM ; PST ; ERM ; Economic and monetary Union ;
15 16 16 16 17 17 18 18 19 20 20 21
FEDAI does not require RBI perm business
True False
Corporates are allowed to raise funds abroad up to $ 15 million as short term finance if they have EPCG lice
True False Who books an option forward contract?
Party who is not definite about crystallisation of delivery date Party who is speculator Party who wants to make more profit Party who wants to accommodate the other party
b) c) d) IMF
India is a founder member of Which causes may force a country to restrict imports or restrict transfer of payments?
.
a)
Economic difficulties
b)
Balance of payment problems such as non availability of c) exchange reserves
d)
Strike by banks employees Non availability of appropriate transfer technology with banks
Buyer's Credit 2. Seller's
4
1
1. Available to seller abroad 2. Export Finance
Credit 3. Usance LC
6
3. Discounting export receivables
4. Forfaiting
3
4. Available to Buyer abroad 5. Seller paid only on maturity date 6. Import finance
International Finance_6
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single Answer Question What do you mean by a derivative? Correct Answer One which has been derived from other fundamental instruments Your Answer One which has been derived from other fundamental instruments Multiple Choice Multiple Answer Question With reference to ECB, fund raising activity includes :Correct Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of shares Your Answer Syndicate loans, issue of shares , Floating rate notes, bonds, debentures Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer USD 1=Rs 50.5000 Match The Following Question Correct Answer Your Answer Merchant banking Portfolio management Note issuing and underwrting facility Securitization Issue of debt in the form of tradeable security Issue of debt in the form of tradeable security Prime borrower Highest credit rating Venture capital Traditional banking service Loans and cash credit against security Highest credit rating Select The Blank Question A Bill of exchange payable 45 days from date of shipment, is a means of ________ from seller to the buyer. Correct Answer Credit Your Answer Intimation of shipment Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer An Irrevocable credit Multiple Choice Single Answer Question Who introduced the worlds first exchange traded currency futures? Correct Answer Chicago Mercantile Exchange Your Answer Bretton woods Agreement Multiple Choice Single Answer Question Name the members of Exchange Banks association :Correct Answer Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar, Your Answer All banks at any business center True/False Question In developed markets, speculators play important role in determining the trend of currency rates. Correct Answer True Your Answer True
-1-
International Finance_6
Multiple Choice Multiple Answer Question What are the objectives of International Chamber of Commerce? Correct Answer Champion the global economy as a force of economic growth , Creating of job and prosperity Your Answer Champion the global economy as a force of economic growth , Creating of job and prosperity Multiple Choice Single Answer Question Under which contracts the seller pays the import duty for the buyer? Correct Answer DDP Your Answer DDU Multiple Choice Multiple Answer Question In which cases can a Resident Individual in India acquire foreign securities without prior approval? Correct Answer Gift from a person outside India, or Inheritance from a person resident in or outside India , Security issued under Cashless employees stock option scheme Your Answer Gift from a person outside India, or Inheritance from a person resident in or outside India , Security issued under Cashless employees stock option scheme Multiple Choice Single Answer Question The document formulated by the borrower of syndicated loan, and the arranger, which contains details of individual shares etc of co-lenders is known as :Correct Answer Memorandum of information Your Answer Memorandum of information Multiple Choice Multiple Answer Question Why does a Transaction exposure arise? Correct Answer Trading flows , Dividend or capital flows Your Answer Trading flows , Dividend or capital flows Match The Following Question Correct Answer Your Answer LastStage Form a single currency Form a single currency The First stage in the Europeand and Monetary Union (EMU) Free movement of capital in EC Free movement of capital in EC Stage II in EMU Establishment of European Monetary Institute Establishment of European Monetary Institute Stage III in EMU Members to meet the convergence criteria and fix the exchange rates Members to meet the convergence criteria and fix the exchange rates Multiple Choice Single Answer Question Value date means the date on which :Correct Answer Delivery of both the currencies will be made Your Answer Delivery of both the currencies will be made True/False Question Till August 1994 India was following the Indirect Methodof Rate quotation. Correct Answer False Your Answer True
-2-
International Finance_6
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Single Answer Question A Specific date forward contract can be booked so as to be :Correct Answer Payable on a specific date of the calendar month Your Answer Payable on a specific date of the calendar month True/False Question ECGC offers isurance protection to Indian exporters againt payment risks. Correct Answer True Your Answer True Multiple Choice Single Answer Question What is a bill of lading? Correct Answer Transport document representing movement of goods by water. Your Answer Transport document representing movement of goods by water. Multiple Choice Multiple Answer Question Which document is used for transportation by air, rail, road, marine? Correct Answer Multimodal transport document , Combined Transport document Your Answer Multimodal transport document , Combined Transport document True/False Question Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct Answer False Your Answer False Select The Blank Question After the second world war many countries adopted the route of ________ to give facelift to sagging economies. Correct Answer Devaluation of their currencies Your Answer Devaluation of their currencies Multiple Choice Multiple Answer Question What do you understand by Commercial Risk? Correct Answer Protracted default by the buyer , Insolvency of the buyer Your Answer Insolvency of the buyer , Risk of strikes due to which commercial activity is haulted Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment of Gifts of GBP 5000 per year per donor Multiple Choice Single Answer Question A Spot Transaction between Japanese Yen and Sterling carried out on Friday in Singapore, the settlement day will be Correct Answer Following Tuesday if it is a working day in all the three centers Your Answer Following Tuesday if it is a working day in all the three centers
-3-
International Finance_6
Multiple Choice Multiple Answer Question Name the services provided by 'Reuter 3000' in forex market:Correct Answer Quotation of forex rates, interest rates , Electronic broking by matching the rates Your Answer Quotation of forex rates, interest rates , Calculate and quote rates for transactions Multiple Choice Single Answer Question What do you understand by a forex option? Correct Answer Right and not the obligation to take or give future delivery of an agreed quantity at certain price Your Answer Right and not the obligation to take or give future delivery of an agreed quantity at certain price True/False Question Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer True Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade Your Answer Companies which have international trade Select The Blank Question The ________is a Floating rate index for swaps. Correct Answer US Commercial paper rate Your Answer US Commercial paper rate True/False Question Services of a Paying bank are taken when currencies of exporters country or the importers country is not involved in the transaction. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question Which two countries were included to convert the group of five into the group of seven? Correct Answer Canada , Italy Your Answer Canada , Italy Multiple Choice Multiple Answer Question Which factors influence the valuation of cash flows? Correct Answer Incomplete capital market , Availability of projkect specific concessional finance, Your Answer Availability of projkect specific concessional finance, , volatility of exchange rates True/False Question PP Form is required when exports are made to any country by post parcel on value payable basis. Correct Answer False Your Answer False True/False Question Sandby credis are introduced by US Banks because they were not permitted to issue on demand guarantees. Correct Answer True Your Answer True
-4-
International Finance_6
Select The Blank Question The international liquidity problem was tackled effectively by a reserve asset known as ________. Correct Answer Special drawing right Your Answer Floating exchange True/False Question Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True Your Answer True Multiple Choice Single Answer Question For a spot transaction carried out on Tuesday, where both centers have holiday on Wednesday, currencies will be exchanged on :Correct Answer Thursday if it is a working day at both the centers Your Answer Thursday if it is a working day at both the centers Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer Monday Select The Blank Question During the fixed rate exchange system prevailing in India, the intervention currency was ________. Correct Answer Sterling Pound Your Answer Indian Rupees Multiple Choice Single Answer Question Inhow many groups are INCOTERMS classified? Correct Answer Four Your Answer Four Multiple Choice Single Answer Question The Direct Investment abroad through share swap arrangement under normal route is permitted in a :Correct Answer JV/WOS Your Answer Holding Co Multiple Choice Single Answer Question Samuraibonds are Correct Answer Foreign yen bonds issued to non resident entities in Japanese Market Your Answer Foreign yen bonds issued to non resident entities in Japanese Market Select The Blank Question The large flow of money internationally was caused primarily by the oil price hikes engineered by ________. Correct Answer OPEC countries Your Answer European Countries True/False Question Proposal for Investment abroa by Indian not falling under automatic route are submitted to Exchange Control Department of RBI. Correct Answer True Your Answer True
-5-
International Finance_6
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single Answer Question What do you mean by a derivative? Correct Answer One which has been derived from other fundamental instruments Your Answer One which has been derived from other fundamental instruments Multiple Choice Multiple Answer Question With reference to ECB, fund raising activity includes :Correct Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of shares Your Answer Syndicate loans, issue of shares , Floating rate notes, bonds, debentures Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer USD 1=Rs 50.5000 Match The Following Question Correct Answer Your Answer Merchant banking Portfolio management Note issuing and underwrting facility Securitization Issue of debt in the form of tradeable security Issue of debt in the form of tradeable security Prime borrower Highest credit rating Venture capital Traditional banking service Loans and cash credit against security Highest credit rating Select The Blank Question A Bill of exchange payable 45 days from date of shipment, is a means of ________ from seller to the buyer. Correct Answer Credit Your Answer Intimation of shipment Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer An Irrevocable credit Multiple Choice Single Answer Question Who introduced the worlds first exchange traded currency futures? Correct Answer Chicago Mercantile Exchange Your Answer Bretton woods Agreement Multiple Choice Single Answer Question Name the members of Exchange Banks association :Correct Answer Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar, Your Answer All banks at any business center True/False Question In developed markets, speculators play important role in determining the trend of currency rates. Correct Answer True Your Answer True
-6-
International Finance_6
Multiple Choice Multiple Answer Question What are the objectives of International Chamber of Commerce? Correct Answer Champion the global economy as a force of economic growth , Creating of job and prosperity Your Answer Champion the global economy as a force of economic growth , Creating of job and prosperity Multiple Choice Single Answer Question Under which contracts the seller pays the import duty for the buyer? Correct Answer DDP Your Answer DDU Multiple Choice Multiple Answer Question In which cases can a Resident Individual in India acquire foreign securities without prior approval? Correct Answer Gift from a person outside India, or Inheritance from a person resident in or outside India , Security issued under Cashless employees stock option scheme Your Answer Gift from a person outside India, or Inheritance from a person resident in or outside India , Security issued under Cashless employees stock option scheme Multiple Choice Single Answer Question The document formulated by the borrower of syndicated loan, and the arranger, which contains details of individual shares etc of co-lenders is known as :Correct Answer Memorandum of information Your Answer Memorandum of information Multiple Choice Multiple Answer Question Why does a Transaction exposure arise? Correct Answer Trading flows , Dividend or capital flows Your Answer Trading flows , Dividend or capital flows Match The Following Question Correct Answer Your Answer LastStage Form a single currency Form a single currency The First stage in the Europeand and Monetary Union (EMU) Free movement of capital in EC Free movement of capital in EC Stage II in EMU Establishment of European Monetary Institute Establishment of European Monetary Institute Stage III in EMU Members to meet the convergence criteria and fix the exchange rates Members to meet the convergence criteria and fix the exchange rates Multiple Choice Single Answer Question Value date means the date on which :Correct Answer Delivery of both the currencies will be made Your Answer Delivery of both the currencies will be made True/False Question Till August 1994 India was following the Indirect Methodof Rate quotation. Correct Answer False Your Answer True
-7-
International Finance_6
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Single Answer Question A Specific date forward contract can be booked so as to be :Correct Answer Payable on a specific date of the calendar month Your Answer Payable on a specific date of the calendar month True/False Question ECGC offers isurance protection to Indian exporters againt payment risks. Correct Answer True Your Answer True Multiple Choice Single Answer Question What is a bill of lading? Correct Answer Transport document representing movement of goods by water. Your Answer Transport document representing movement of goods by water. Multiple Choice Multiple Answer Question Which document is used for transportation by air, rail, road, marine? Correct Answer Multimodal transport document , Combined Transport document Your Answer Multimodal transport document , Combined Transport document True/False Question Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct Answer False Your Answer False Select The Blank Question After the second world war many countries adopted the route of ________ to give facelift to sagging economies. Correct Answer Devaluation of their currencies Your Answer Devaluation of their currencies Multiple Choice Multiple Answer Question What do you understand by Commercial Risk? Correct Answer Protracted default by the buyer , Insolvency of the buyer Your Answer Insolvency of the buyer , Risk of strikes due to which commercial activity is haulted Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment of Gifts of GBP 5000 per year per donor Multiple Choice Single Answer Question A Spot Transaction between Japanese Yen and Sterling carried out on Friday in Singapore, the settlement day will be Correct Answer Following Tuesday if it is a working day in all the three centers Your Answer Following Tuesday if it is a working day in all the three centers
-8-
International Finance_6
Multiple Choice Multiple Answer Question Name the services provided by 'Reuter 3000' in forex market:Correct Answer Quotation of forex rates, interest rates , Electronic broking by matching the rates Your Answer Quotation of forex rates, interest rates , Calculate and quote rates for transactions Multiple Choice Single Answer Question What do you understand by a forex option? Correct Answer Right and not the obligation to take or give future delivery of an agreed quantity at certain price Your Answer Right and not the obligation to take or give future delivery of an agreed quantity at certain price True/False Question Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer True Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade Your Answer Companies which have international trade Select The Blank Question The ________is a Floating rate index for swaps. Correct Answer US Commercial paper rate Your Answer US Commercial paper rate True/False Question Services of a Paying bank are taken when currencies of exporters country or the importers country is not involved in the transaction. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question Which two countries were included to convert the group of five into the group of seven? Correct Answer Canada , Italy Your Answer Canada , Italy Multiple Choice Multiple Answer Question Which factors influence the valuation of cash flows? Correct Answer Incomplete capital market , Availability of projkect specific concessional finance, Your Answer Availability of projkect specific concessional finance, , volatility of exchange rates True/False Question PP Form is required when exports are made to any country by post parcel on value payable basis. Correct Answer False Your Answer False True/False Question Sandby credis are introduced by US Banks because they were not permitted to issue on demand guarantees. Correct Answer True Your Answer True
-9-
International Finance_6
Select The Blank Question The international liquidity problem was tackled effectively by a reserve asset known as ________. Correct Answer Special drawing right Your Answer Floating exchange True/False Question Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True Your Answer True Multiple Choice Single Answer Question For a spot transaction carried out on Tuesday, where both centers have holiday on Wednesday, currencies will be exchanged on :Correct Answer Thursday if it is a working day at both the centers Your Answer Thursday if it is a working day at both the centers Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer Monday Select The Blank Question During the fixed rate exchange system prevailing in India, the intervention currency was ________. Correct Answer Sterling Pound Your Answer Indian Rupees Multiple Choice Single Answer Question Inhow many groups are INCOTERMS classified? Correct Answer Four Your Answer Four Multiple Choice Single Answer Question The Direct Investment abroad through share swap arrangement under normal route is permitted in a :Correct Answer JV/WOS Your Answer Holding Co Multiple Choice Single Answer Question Samuraibonds are Correct Answer Foreign yen bonds issued to non resident entities in Japanese Market Your Answer Foreign yen bonds issued to non resident entities in Japanese Market Select The Blank Question The large flow of money internationally was caused primarily by the oil price hikes engineered by ________. Correct Answer OPEC countries Your Answer European Countries True/False Question Proposal for Investment abroa by Indian not falling under automatic route are submitted to Exchange Control Department of RBI. Correct Answer True Your Answer True
- 10 -
International Finance_6
- 11 -
International Finance_7
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Select The Blank Question A Documentary credit issued on the strength of another documentary credit is known as ________. Correct Answer Back to Back credit Your Answer Back to Back credit True/False Question The Option period in the forward contract is at the option of the Banker, hence the bank has to be very conservative in quoting rates. Correct Answer False Your Answer True True/False Question JV means Joint venture and WOS means World of Security. Correct Answer False Your Answer True Select The Blank Question The rate of interest on rupee finance for exports is not exceeding ________ less than PLR. Correct Answer 0.025 Your Answer 50 basis points over LIBOR True/False Question The working of the IBRD and IMF in recent has blurred the difference between the two Correct Answer True Your Answer True Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Single Answer Question In case the value date happens to be a holiday then the settlement is done :Correct Answer On the next working day Your Answer On the next spot day(third day) Select The Blank Question Legalised invoice is also called ________ invoice. Correct Answer Visaed Your Answer Visaed True/False Question The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. Correct Answer False Your Answer False Select The Blank Question An exchange rate for $ was48.2050, it is now 48.2075, then one says that it has moved ________ basis points Correct Answer 25
-1-
International Finance_7
Your Answer 0.0025 Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer An Irrevocable credit Select The Blank Question Profitability of a project in China to an Indian may be enhanced by ________. Correct Answer Concessionary finance available in China Your Answer Concessionary Finance available in India Multiple Choice Single Answer Question A country needs external commercial borrowings to :Correct Answer Meet the adverse balance of payments position Your Answer Meet the adverse balance of payments position Match The Following Question Correct Answer Your Answer Maturity of future Time when actual commodity is delivered Last date of exercising option Note issuance facility Euronotes Euronotes Bearer security issued in currency other than that of the country of issue Eurobonds Peformance bond or security deposit Margin on future Peformance bond or security deposit Time when actual commodity is delivered Multiple Choice Single Answer Question A Bank quotes interest rate of 9.50/10.00 for six months dollar deposit, here the bid rate is :Correct Answer 9.50% P.A. Your Answer 9.50 divided by 6 =1.58% P.A. Multiple Choice Multiple Answer Question With reference to ECB, fund raising activity includes :Correct Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of shares Your Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of shares Multiple Choice Single Answer Question In which of the funding facilities the repayment period is between 3 to 5 years ? Correct Answer C.C.F.F. Your Answer Stand By Arrangement Multiple Choice Multiple Answer Question Why is Bill of Exchange a Quasi Negotiable Instrument? Correct Answer It represents title to goods , It is issued under Sale of Goods act Your Answer It represents title to goods , It is issued under Sale of Goods act Multiple Choice Multiple Answer Question What do you understand by 'Foreign Exchange Risk'? Correct Answer The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows Your Answer The change in value of currency alters the home currency value of an asset , liability, , Inability to control various factors contributing to International trade
-2-
International Finance_7
Multiple Choice Single Answer Question The document formulated by the borrower of syndicated loan, and the arranger, which contains details of individual shares etc of co-lenders is known as :Correct Answer Memorandum of information Your Answer Participation certificate Multiple Choice Multiple Answer Question Why does a Transaction exposure arise? Correct Answer Trading flows , Dividend or capital flows Your Answer Trading flows , Dividend or capital flows Multiple Choice Single Answer Question What is the volume of the world's total speculative transactions? Correct Answer Roughly 90 % of the total turnover Your Answer 70% of the total turnover Multiple Choice Multiple Answer Question A Forward purchase contract was booked with an authorised dealer and subsequently cancelled .It :Correct Answer Can be booked again with another dealer , Can be booked again with the same dealer Your Answer Can be booked again with another dealer , Can be booked again with the same dealer True/False Question Floating rate notes are traded in secondary market also. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question What were the immediate causes of converting the group of 5 into group of 7 and convene their meeting in late 1985? Correct Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased Your Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased Multiple Choice Single Answer Question For a spot transaction carried out on Tuesday, where both centers have holiday on Wednesday, currencies will be exchanged on :Correct Answer Thursday if it is a working day at both the centers Your Answer Thursday if it is a working day at both the centers Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer American Dollar Multiple Choice Single Answer Question When was the first currency swap introduced in world market? Correct Answer 1970 Your Answer 1970 Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations
-3-
International Finance_7
Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations , which have greater gold parity Multiple Choice Single Answer Question Under which method of payments is the buyer not required to pay till he gets the possession of the documents? Correct Answer Documents against payment terms specified in the bill of exchange Your Answer Documents against payment terms specified in the bill of exchange Multiple Choice Single Answer Question How does ECGC protect banker's against risks for export finance? Correct Answer Issuing various guarantees covering different risks connected with exports at nominal premium Your Answer Issuing various guarantees covering different risks connected with exports at nominal premium Multiple Choice Single Answer Question What is a bill of lading? Correct Answer Transport document representing movement of goods by water. Your Answer Transport document representing movement of goods by water. Select The Blank Question In Indian interbank market forward rates are generally quoted on the basis of ________. Correct Answer Calendar month Your Answer Calendar month Select The Blank Question Fixed interest rate Eurobond without the option to convert to equity is known as ________. Correct Answer Straight Debt Your Answer Straight Debt True/False Question Yankee bond is issued for domestic borrowers. Correct Answer False Your Answer False Multiple Choice Single Answer Question Examples of hedge are: Correct Answer Buy when you are having short position Your Answer Buy when you are expecting fall in prices Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer USD 1=Rs 50.5000 + margin True/False Question Proposal for Investment abroa by Indian not falling under automatic route are submitted to Exchange Control Department of RBI. Correct Answer True Your Answer True Multiple Choice Single Answer Question What is LIBOR? Correct Answer Rate of interest for inter bank lending of funds for various maturities
-4-
International Finance_7
Your Answer Interest rate in Money Market in London Multiple Choice Multiple Answer Question The various arms of World Bank are: Correct Answer International Development Agency , Multinational Investment Guarantee Agency Your Answer International Development Agency , Multinational Investment Guarantee Agency , Asian Development Bank True/False Question The American Dollar market comprises of the domestic segment of USD the offshore segment of USD. Correct Answer True Your Answer False Match The Following Question Correct Answer Your Answer Cancellation of contracts above USD 500000 ECD ECD Forward Purchase contract currency at premium Presume earliest delivery Presume earliest delivery Forward purchase contract currency at discount Presume latest delivery Presume latest delivery Exchange margins FEDAI FEDAI Multiple Choice Single Answer Question Value date means the date on which :Correct Answer Delivery of both the currencies will be made Your Answer Value of currency will be paid in terms of goods or commodities Multiple Choice Multiple Answer Question How is the entry into any conuntry's money market or capital market is restricted? Correct Answer Because of different tax systems , Because of different credit standards Your Answer Because of different tax systems , Because of protectionism Multiple Choice Single Answer Question What are the functions of Export Import Bank of India? Correct Answer Finance functions and development functions Your Answer Finance functions and development functions Multiple Choice Single Answer Question A weight list, a packing list used in international trade are which type of documents? Correct Answer Operational Documents Your Answer Bipartite documents Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade Your Answer Companies which have international trade
-5-
Chapter – 1 – Introduction to international capital markets Euro currency ; domestic markets ; US Japan ; Switzerland ; UK ; Australia ; Canada ; European ; centers in ECU; Chapter – 2 – International Finance Markets - the U.S. dollar Market ; The U.S. Dollar Market ; The Japanese Yen Market ; The Sterling Market ; The Euro Market Has Been discussed in the next chapter ; Recent development in international Finance Markets ; Chapter – 3 – International Monetary and Financial System The country’s central ban agreed to buy back their currency at a certain rate of gold; Melting down of gold was freely allowed ; There was unrestricted movement of gold (i.e. import and / or export) The total money supply in the country was determined by the quantum of gold reserves in the country The international monetary fund ; quotas ; funding facilities ; regular facilities tranche policies ; restore Tranche credit Tranche ; extended arrangement (extended fund facility (EEF) ; Standard Arrangement (enlarged Arrears Policy) Special facilities (compensatory and contingency financing facility (CCFF) Buffer stock Financing Facility ; Supplemental Reserve Policy (SRP); Reserve Tranche ; Credit Tranche ; Stand by arrangement ; Extended arrangement or extended fund facilities (EFF) special facilities ; CCFF ; Buffer stock financing Facility (BSFF) ; Supplemental resources facility (SRF) Enhanced structural adjustment facility (ESAF) The fixed exchange rate system Problems faced by the fixed exchange rate system ; failure of fixed rate system ; the European monetary system (EMS) ; Economic and monetary union ; Recent developments ; post – Maastricht developments; emergence of EURO The group of seven ; special drawing rights (SDRS) ; The liquidity problems (SDRS) ; the world bank group ; the world bank; international development agency (IDA) ; international finance corporation (IFC) ; The multinational investment Guarantee Agency (MIGA) Chapter – 4 – External commercial borrowing – country ; company ; Equity ; Fund raising ; underwriting ; hedging ; arbitraging ; note issuance facility ; Mechanism and documentation ; syndicated loans ; floating rate notes ; Flip – Flop FRN ; MIS – Mich FRN ; MINI Max FRN ; Capped FRNs, Perpetual FRNs; VRN structured FRNs; Terms and conditions of FRN Ero Commercial paper (ECP) ; ADRs and GDRs; GDR – Global depositary Receipts ; The roles of different parties involved in launching of GDR GDR – Global Depositary Receipts ; The roles of different parties involved in launching of GDR steps involved in issuance of GDR are as follows Pricing and Closing ; costs ; Advantages & Disadvantages of external commercial borrowing Chapter – 5 – Documents used in International Trade ; Regulatory requirements ; operational requirements ; commercial documents ; financial documents transport documents ; risk covering documents ; official / regulatory documents ; miscellaneous documents ; Commercial documents ; proforma invoice ; commercial invoice ; consular invoice customs invoice ; legalized invoice ; combined certificate of origin and value ; financial documents ; bill of exchange ; The second of the same tenor and date unpaid ; the first of the same tenor and date unpaid ;
1 5 – 10
13 – 14
15 – 17
18 – 19 20 – 23 24 – 27 31 – 35 36 – 39
40 – 41 43 – 46
47 – 49
or similar words ; sight B/E; Tenor ; time B/E; DP Basis ; document against Payment Basis ; Documents against Acceptance Basis Transport documents; bill of lading ; received for shipment bill of lading ; on board bill of lading ; Short form bill of lading ; long form bill of lading clean bill of lading ; claused bill of lading ; through bill of lading ; straight bill of lading ; charter party Bill of lading ; container bill of lading container bill of lading ; combined transport B/L or Mulit Modal B/L lash bill of lading house bill of lading ; Airway bill ; Air consignment Note ; House Air way bill ; Postal Receipt ; Courier /Expected delivery service ; multimodal transport document ; risk covering documents ; insurance policy ; Insurance cover note ; official documents export declaration forms ; export certificate; Certificate of origin ; Miscellaneous documents ; packing list ; weight certificate ; certificate of analysis and quality ; certificate of inspection ; health certificate ; phytosanitary / Radiation / Fumigation Chapter 6 – Methods of payment ; advance payment ; bill for collection ; open account ; barter trade ; bank guarantee ; letter of credit (L / C) Seller wants buyer wants ; parties to a documentary credit ; applicant issuing bank advising ; confirming bank beneficiary ; negotiating bank ; reimbursing bank Types of letters of credit ; revocal letter of credit ; irrevocable letter of credit ; confimed irrevocable letter of credit ; transferable l / c revolving letter of credit ; credit available by installments; back to back letter of credit ; anticipatory credit or red clause letter of credit ; green clause letter of credit ; deferred payment letter of credit ; standby letter of credit ; flow chart of export transaction under letter of credit Flow chart of export transaction under letter of credit ; various steps in the transaction are as under ; steps no. description Chapter 7 – Export / Import Finance ; - Part I import finance ; import financing through trust receipts / import loans ; import financing through issuing l/ c or bank guarantee ; part II – Export Finance Timely ; adequate ; cheaper on liberal terms ; sources for raising finance ; own funds ; 2 friends and relative ; 3 advance payment from buyer ; 4 Trade credit from suppliers 5 banks and financial institutions ; pre-shipment credit (P.C) Post shipment credit ; advance against cash incentives / duty draw back ; forfeiting ; rediscounting of export bills abroad ; buyer’s credit ; supplier’s credit Chapter – 8 – Procedure in connection with foreign investment in India – Seciton – I foreign direct investment ; FERA ; the practice at which a company can issue shares to non residents ; fema ; esop ; section II – Foreign technical collaboration ; General Hotel & Tourism Related Industries ; procedure for granting approval; I / We hereby certify that ; Documentation ; Standard conditions attached to approval for technology agreement ; no objection ; the agreement shall be subject to Indian laws: Section – III – Portfolio investment ; explanation ; the regulations regarding portfolio investments by NRIs / PIOs are as under ; NRI / PIOs ; Section – IV – Other investments ; Section V – procedure for opening branch / project / Liaison office ; Chapter – 9 – Direct investment outside India – overseas investment division TDR ADR GDR the criteria for investment under the automatic route are as under ; JV/WOS; ODA; The schemes for overseas investment by partnership firms ; criteria for overseas investment by a registered partnership firm under the automatic route ; The procedure to be followed by a partnership firm for making investment under the automatic route ; the procedure to be followed by partnership firms which are not eligible
50 – 53
55 – 57
61 – 66
67 – 69
70 – 71 73 – 74
75 -76 79 – 83 84 – 88 89 - 92 95 – 99
100 – 102
under the automatic route ; restrictions for setting up of a second generation company ; resident individual India can acquire foreign securities without prior approval in the following cases ; provided that ; WOS Chapter – 10 – Taxation ; Bilateral relief Unilateral relief ; for the purpose of this provision Part – 2 Forex risk management and hedging techniques Chapter – 1 Foreign exchange markets – The international Market ; survey were ; the market ; the participants ; information and communication system ; the payment system ; the foreign exchange market in India Chapter – 2 – Exchange Rates – Exchange rage quotes ; direct and indirect rates ; direct rates ; indirect rates; spot and forward rates value rate; ready or cash ; value today ; TOM; spot ; forwards; glossary of market terms; Foreign exchange risks ; transactions exposure ; translation exposure ; economic exposure; Translation – moving towards a consensus ; economic exposure ; an overview ; scenario exchange rages in India ; Inward remittances export encashment of foreign currency travelers cheques ; encashment of foreign currency notes; outward remittances ; imports ; issuing foreign currency travelers cheques issuing foreign currency notes ; Type of transaction exchange rate nomenclature ; Factors affecting movement of exchange rates ; summary Chapter – 3 – Forward contracts - Forward cover for merchants – forward purchase cover forward sales contract - repayment of foreign currency loans – period of delivery – cross currency booking (sale / Purchase ) ; utilization of the forward cover ; cancellation ; calculation of exchange rates for forward contracts Cancellation ; early delivery and rollover of forward contracts ; forward sale contracts ; forward purchase contract ; early delivery ; rollover charges Chapter 4 – Options and Futures – History and development ; recent trends ; key features of options and futures ; premium ; maturity or expiration date ; exercise ; in the money ; at the money ; out of the money American option European option ; underlying asset price time before expiration ; underlying asset price ; time before expiration the rate of interest volatility Pricing and analysis ; pricing of options ; underlying asset price ; exercise price ; options and futures products today ; interest rate options ; foreign exchange options and futures ; equity linked options ; commodity linked futures and options Chapter – 5 - Swaps What are swaps ; interest rate swaps ; lowering financial cost ; hedge exposure to interest rate risk ; restructuring the debt in the balance sheet ; amortizing and accreting swaps ; forward swaps ; Reversible swaps ; basis swaps Currency swaps ; lowering funding cost ; entering restricted capital markets ; reducing currency risk ; supply demand imbalances in the markets ; amortizing currency swaps ; accreting currency swaps ; floating – for floating rate currency swaps ; interest payments ; asset swaps PART 3 – AGENCIES INVOLVED IN INTERNATIONAL TRADE Chapter – 1 – Export import Bank of India ; Functions of Exim Bank ; the exim bank performs the following functions ; incidental functions ; operations programmes ; direct financial assistance to exporters ; consultancy and technology services ; pre-shipment credit ; facilities for export – oriented units ; overseas investment facility buyer credit facilities for
105 – 106 109 – 114 117 – 123
124 – 127
128 – 129 131 – 137
138 – 141 143- 147
148 – 152 155 – 157
158 – 161
163 – 166
deemed exports small scale industry export bills rediscounting; the latest new schemes in operation since 1992 are the following Chapter – 2 – Reserve Bank of India Exchange controls in India – RBI as the exchange control authority ; Authorized dealers (Ads) ; Money charges ; other receipts ; payment for imports ; other payments ; delegation to Ads; securities ; foreign currency accounts; liberalization of exchange control Sodhani Committee Recommendations ; Exchange rate management ; Chapter – 3 – Foreign Exchange dealers association of India ; Uniform customs and practice for collection ; Chapter 4 – International chamber of commerce – ICC – WCF – IBCC – WCF Chapter – 5 – Export credit guarantee corporation of India ; ECGC; need for export credit insurance ; credit insurance policies ; scr or standard policy ; turnover policy ; small exporter policy ; specific shipment policy (short term); buyer wise policy ; specific policy for supply contract insurance cover for buyer’s credit and line of credit Services Policy ; construction works policy ; maturity factoring ; Guarantees to banks ; packing credit guarantee ; export production finance guarantee ; post – shipment credit guarantee ; export finance guarantee ; export performance guarantee; export finance (overseas lending ) Guarantee Part – 4 – Miscellaneous Chapter 1 – Exchange Earner’s foreign currency (EEFC) Status holder exporter ; individual professional ; others; permissible credits ; permissible debits ; Chapter 2 – Country Risk ; Quantifying country risk ; A comprehensive example ; use of country risk ; assessment ; Chapter 3 – International capital Budgeting - The Basic Frame work Chapter 4 – Incoterms – Group E departure EXW ; Group F Main carriage unpaid ; FAS ; FOB ; CFR ; CIF ; CPT ; CIP ; Group C; Group D ; Arrival DAF ; DES ; DEQ; DDU CTD / MTO ; DDP ; delivered duty paid (CTD / MTO) Chapter – 5 – Actuals ; arbitrage ; bankers’ acceptance bond (BAS) ; Bearer Bond ; Bid rate ; Bond ; Bull; call option ; caps ; cash commodity ; cash market ; cedel ; certificate of deposit (CD) class of option ; closing price ; commission ; commercial paper (CP) ; contract specifications ; convertible bond ; coupon ; cover; delivery ; delivery month ; equity ; equity swaps ; equity collar ; Eurobond ; Euro clear ; euro commercial paper; euro –currency ; Exercise price ; expiration date; floating rate note ; fundamental Analysis ; futures contract hedge ; Hybrid ; Interest Rate swap; Intermediation ; Intrinsic Value ; Libor ; Long margin ; margin call maturity naked position ; note issuance facility (NIF) Option ; overbought ; oversold ; physical market ; position ; premium purchaser ; put option ; settlement price short ; speculator ; strike price ; straight debt tap ; technical analysis tranche ; tombstone volatility ; volume ; withholding tax ; yankee bond ;
169 – 173
174 – 177 179 – 180 183 – 183 189 – 190
191
195 199 203 – 204 207- 212 215 – 217
218 -219 220 – 221
International Finance_9 LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question Which functions does the Bill of Lading serve? Correct Answer It is a document of title to goods. , It is receipt of goods Your Answer It is a document of title to goods. , It is receipt of goods Multiple Choice Single Answer Question A Bank quotes interest rate of 9.50/10.00 for six months dollar deposit, here the bid rate is :Correct Answer 9.50% P.A. Your Answer 9.50% P.A. Multiple Choice Single Answer Question What is Sovereign Risk? Correct Answer Risk of lending to the government of a country Your Answer Risk of lending to the government of a country Multiple Choice Single Answer Question How does ICC help poor countries? Correct Answer Attract Foreign Direct investments togeather with UNCTAD Your Answer Attract Foreign Direct investments togeather with UNCTAD Multiple Choice Multiple Answer Question As per BIS, recovery from the recent crisis in global capital market was mainly due to Correct Answer Rapid and appropriate policy response in US and other countries , Increase in Foreign Direct Investments , free flow of credit Your Answer Rapid and appropriate policy response in US and other countries , Increase in Foreign Direct Investments , free flow of credit True/False Question Out of 15 member countries in European Union 12 countries commiteed themselves for a single currency. Correct Answer False Your Answer True True/False Question In red clause credit some clauses are printed in Red ink. Correct Answer True Your Answer True True/False Question Transfer of funds for investment abroad
-1 -
International Finance_9 is allowed freely. Correct Answer True Your Answer False Select The Blank Question EEFC account holder is allowed to have ________ facility. Correct Answer Cheque book and nomination Your Answer Credit card, safe custody, safe deposit locker without any fee Select The Blank Question Fixed interest rate Eurobond without the option to convert to equity is known as ________. Correct Answer Straight Debt Your Answer Interest rate swap True/False Question An Indian importing goods from USA pays dollars in India. Correct Answer False Your Answer True Match The Following Question Correct Answer Your Answer PP Form Export Declaration form Export Declaration form Health Certificate Fumigation certificate Export Declaration form Certificate of Inspection As per importers requirement Export Declaration form Certifiate of Origin Export Promotion Council Export Declaration form Multiple Choice Multiple Answer Question For issuing a Documentary credit The applicant is required to provide to the issuing bank details about Correct Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents Your Answer The purchase-sales contract, the mode of payment, the tenor of payment , The track record of the buyer and seller Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an
-2 -
International Finance_9 undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given on behalf of a certain person to another person in different country , It is a stamped agreement and is not valid unless it is signed by the issuer True/False Question CFR = FOB plus freight paid by seller + insurance paid by seller. Correct Answer False Your Answer True Select The Blank Question Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer OPEC True/False Question Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer True Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your Answer Supplemental Reserve Policy Multiple Choice Multiple Answer Question What are the sources of raising funds for exports? Correct Answer Suppliers credit , Forfaiting Your Answer Suppliers credit , Forfaiting , Buyers credit , Foreign currency or Rupee finance True/False Question Normally the forward contracts are booked for making huge profits. Correct Answer False Your Answer False True/False Question Head office of ICC is in Paris because of its First President Eliance Clementel. Correct Answer True Your Answer False Select The Blank Question A ________ Bill of lading does not specify the terms and conditions of carriage.
-3 -
International Finance_9 Correct Answer Short Form Your Answer Short Form Multiple Choice Single Answer Question What is the volume of the world's total speculative transactions? Correct Answer Roughly 90 % of the total turnover Your Answer 70% of the total turnover True/False Question Till August 1994 India was following the Indirect Methodof Rate quotation. Correct Answer False Your Answer False Select The Blank Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme. Correct Answer Overseas investment facility Your Answer Overseas investment facility Multiple Choice Single Answer Question Mr P has exported goods in May 2005 and is expecting payment of Euro 25000 by the last week of Sept 2005. Give details of the forward contract he can book :Correct Answer He can book a sale contract any time from May 2005 till Mid Sept 2005, for Euro 25000 or less, for maturity last week of Sept. Your Answer He can book a contract for Forward Purchase, any time from May 2005 till Mid Sept 2005, for Euro 25000 or less, for maturity last week of Sept. Select The Blank Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________. Correct Answer Shelf Registration Your Answer Shell Registration Multiple Choice Multiple Answer Question Which common details will be available in any bill of Lading? Correct Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment Your Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment , The name of the vessel , The date of transportation and contract of transportation Select The Blank Question Under the ________ standard the Country's Central Bank promised to buy back the currency at certain rate of Gold.
-4 -
International Finance_9 Correct Answer Gold Your Answer Interest Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer ADRs Select The Blank Question The type of trade where a country sells orange juice in return for cars is known as ________. Correct Answer Counter Trade Your Answer Non money trade Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment to EOUs in India for services rendered by them , Payment of Gifts of GBP 5000 per year per donor Multiple Choice Multiple Answer Question Under the liberalisation through FEMA, what can an AD offer to the clients, without the prior permission of RBI or Government? Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Your Answer Caps and collars, and forward rate agreements , Good and competitive exchange rates and cross currency rates Multiple Choice Multiple Answer Question Sterling Market is attractive for an international investor because Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Your Answer Choice of issuing medium term and long term bonds , Less controls and less formalities to be completed , Linking of issues to currency swaps Multiple Choice Single Answer Question Under which contracts the seller pays the import duty for the buyer? Correct Answer DDP Your Answer DDP True/False Question PP Form is required when exports are made
-5 -
International Finance_9 to any country by post parcel on value payable basis. Correct Answer False Your Answer True Multiple Choice Multiple Answer Question What were the immediate causes of converting the group of 5 into group of 7 and convene their meeting in late 1985? Correct Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased Your Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased , The heads of G5 insisted to have a meeting , Failure of IMF to control the exchange rates Multiple Choice Single Answer Question What are the powers of money changers? Correct Answer Purchase and sell foreign currency notes and travellers cheques Your Answer Purchase and sell foreign currency notes and travellers cheques, give import and export finance Multiple Choice Single Answer Question Who can open an EEFC account? Correct Answer Individuals , firms, companies, resident in India Your Answer Individuals , firms, companies, resident in India Multiple Choice Single Answer Question What is the role of ICC towards WTO? Correct Answer To provide world business recommendations to WTO Your Answer To further the cause of WTO Match The Following Question Correct Answer Your Answer Swap price Difference in prices of two legs of buying and selling Quoting rate for both buying and selling a currency Euro Market Market in Euro currencies Market in Euro currencies Making market Quoting rate for both buying and selling a currency Difference in prices of two legs of buying and selling Spread Price difference between bid and offer Maket of 'Euro'
-6 -
International Finance_9 Select The Blank Question Position in a currency is said to be ________, when sales equal purchases. Correct Answer Square Your Answer Awkward Select The Blank Question Hotels and Airline companies are allowed to receive payments in Indian rupees from foreign tourist without insisiting on ________. Correct Answer Encashment certificate Your Answer Encashment certificate Multiple Choice Multiple Answer Question Why is Bill of Exchange a Quasi Negotiable Instrument? Correct Answer It represents title to goods , It is issued under Sale of Goods act Your Answer It represents title to goods , It is issued under Transportation act , It is issued under Bill of exchange act Multiple Choice Single Answer Question Which details about forward contracts do the Exchange Controls verify ? Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000 Your Answer Details of all contracts booked and cancelled beyond a specified limit Multiple Choice Single Answer Question In the context of International economy ,the period between 1920s and 1930s is known as Correct Answer Great Depression Your Answer Great Depression Multiple Choice Multiple Answer Question What do you understand by Commercial Risk? Correct Answer Protracted default by the buyer , Insolvency of the buyer Your Answer Protracted default by the buyer , Insolvency of the buyer
-7 -
International Finance_10
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates Select The Blank Question ________ is the agency of ICC which deals with the maritime crime. Correct Answer International Maritime Bureau Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your Answer
Buffer Stock Facility
True/False Question
Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of payment Your Answer The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer US Dollar
-1 -
International Finance_10 Your Answer
US Dollar
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not Cost of evluation does not justify analysis justify analysis
Stock market analysis
Banks are ahead
Factors' values
Weightages %
Factors' values
100% of total
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer
Pegged to Single currency
Match The Following Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity is delivered
Last date of exercising option
Note issuance facility
Euronotes
Euronotes
Bearer security issued in Eurobonds currency other than that of the country of issue
Eurobonds
-2 -
International Finance_10 Margin on future
Peformance bond or security deposit
Peformance bond or security deposit
True/False Question
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct Answer False Your Answer
False
True/False Question
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What are margins, with reference to futures market? Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Your Answer Which enables the investor to market the same in the secondary market Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
-3 -
International Finance_10 Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer Preshipment credit up to six months for construction and turnkey projects abroad Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily. Correct Answer Economies Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer US Dollar Your Answer
US Dollar
Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer Control by Government' Your Answer
Recurrence
Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer Sharing of risk of non payment by supplier
-4 -
International Finance_10 Your Answer
True/False Question
Sharing risk of Non payment by the Syndicate of Banks giving loans
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them True/False Question
Funding Options in domestic yen market are Futures, FRAs, Call and put options. Correct Answer True Your Answer
True
True/False Question
There is no difference between CIP and CIF contracts except the mode of transportation. Correct Answer True Your Answer
True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade
-5 -
International Finance_10 Your Answer
Companies which have international trade
Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Primary activity
Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer
An Irrevocable credit
True/False Question
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. Correct Answer False Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer Preshipment credit , Post shipment credit , Duty Draw back Your Answer
Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value Multiple Choice Multiple Answer
-6 -
International Finance_10 Question
What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer Buy when you are having short position Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer? Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount
-7 -
International Finance_10 Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer Prices of capital market instruments change and are expected to change drastically Your Answer Prices of capital market instruments change and are expected to change drastically True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer False Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed
-8 -
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question What are the features of Settlement price ? Correct Answer Price established by the clearing house at the end of each trading session , It is used to determine the net gain, loss, margin call and next days price limits Your Answer Price established by the clearing house at the end of each trading session , It is used to determine the net gain, loss, margin call and next days price limits Select The Blank Question Legalised invoice is also called ________ invoice. Correct Answer Visaed Your Answer
Visaed
True/False Question
The working of the IBRD and IMF in recent has blurred the difference between the two Correct Answer True Your Answer
False
Multiple Choice Multiple Answer Question Under the liberalisation through FEMA, what can an AD offer to the clients, without the prior permission of RBI or Government? Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Your Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements , Good and competitive exchange rates and cross currency rates Select The Blank Question ________Bill of lading must specify the name of the ship. Correct Answer "On Board" Your Answer
"On Board"
Multiple Choice Single Answer Question What is the immediate cause for the growth of futures and options in the last two decades? Correct Answer Increase in volatile trading conditions
Your Answer
General market investments
Multiple Choice Single Answer Question In the context of International economy ,the period between 1920s and 1930s is known as Correct Answer Great Depression Your Answer
Great Depression
Match The Following Question
Correct Answer
Your Answer
Departure
EXW
EXW
Main carriage paid
CFR
CFR
Main carriage unpaid
FAS
FAS
Arrival
DES
DES
Multiple Choice Single Answer Question What is the statutory requirement about receivables of exports from India? Correct Answer The export receivables must be repatriated within six months of the date of shipment. Your Answer The export receivables must be repatriated within six months of the date of shipment. True/False Question
An exporter expecting payment in$ next month will book a forward purchase contract. Correct Answer False Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of IDA Loan are: Correct Answer It gives loans to poorer countries , The rate of interest is zero percent , The repayment period is very long 40 years Your Answer It gives loans to poorer countries , The rate of interest is zero percent , The repayment period is very long 40 years Multiple Choice Multiple Answer Question What is the duty of the AD while booking a forward contract?
Correct Answer Verify the suitable documentary evidence, and that the customer is exposed to risk , Ensure that a genuine transaction exists Your Answer Verify the suitable documentary evidence, and that the customer is exposed to risk , Ensure that a genuine transaction exists , Protect the customer fully from exchange risk Multiple Choice Multiple Answer Question Criteria for Direct investment abroad under normal route :Correct Answer Viability of the proposal, and excellent track record of business , Experience and expertise of promoters, benefit to the country Your Answer Viability of the proposal, and excellent track record of business , Experience and expertise of promoters, benefit to the country , Total Financial commitment in JV/WOS as per prescribed ceiling Multiple Choice Single Answer Question When was the first currency swap introduced in world market? Correct Answer 1970 Your Answer
1970
True/False Question
Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question Who can issue the Certificate of Inspection? Correct Answer Export Inspection Council , Person authorised by Importer. Your Answer
Export Inspection Council , Person authorised by Importer. , Reserve Bank of India
Match The Following Question
Correct Answer
Your Answer
Cancellation of contracts above USD 500000
ECD
FEDAI
Forward Purchase contract currency at premium
Presume earliest delivery Presume earliest delivery
Forward purchase contract currency at discount
Presume latest delivery
Presume latest delivery
Exchange margins
True/False Question
FEDAI
ECD
Both futures and options are traded on a public exchange.
Correct Answer False Your Answer
True
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
GBP 300 billion
Multiple Choice Single Answer Question A Bank quotes interest rate of 9.50/10.00 for six months dollar deposit, here the bid rate is :Correct Answer 9.50% P.A. Your Answer
9.50 divided by 6 =1.58% P.A.
True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer False Your Answer
True
Multiple Choice Multiple Answer Question How is the entry into any conuntry's money market or capital market is restricted? Correct Answer Because of different tax systems , Because of different credit standards Your Answer Because of different tax systems , Because of different credit standards , Because of protectionism True/False
Question
The American Dollar market comprises of the domestic segment of USD the offshore segment of USD. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question The major cost components of NIF are :Correct Answer Underwriters fees , Margins of notes Your Answer
Underwriters fees , Documentation charges , Issue registration fees
True/False Question
FRN's issued with ceiling on interest beyond which the issues is not required to pay interest is known as Mini-Max FRN Correct Answer True Your Answer
False
Multiple Choice Single Answer Question A weight list, a packing list used in international trade are which type of documents? Correct Answer Operational Documents Your Answer
Optional documents
Select The Blank Question The credit which does not constitute a legally binding undertaking between the bank and the beneficiary is ________. Correct Answer Revocable Credit Your Answer
Revocable Credit
Multiple Choice Multiple Answer Question Sterling Market is attractive for an international investor because Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Your Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds , Linking of issues to currency swaps Multiple Choice Single Answer Question European currency Unit Correct Answer Basket of Currencies of members of EMS
Your Answer
Basket of Currencies of members of EMS
True/False Question
At Least one principal Lender bank is essential for issue of the ADR or GDR. Correct Answer False Your Answer
True
True/False Question
In an already booked forward contract, a person may seek early delivery, extension in period, or cancellation. Correct Answer True Your Answer
True
Multiple Choice Single Answer Question A Run on gold gold by a country means Correct Answer Exchange of reserve currency in to gold Your Answer
Exchange of gold into Reserve Currency
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the bid rate for USD? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Single Answer Question The Direct Investment abroad through share swap arrangement under normal route is permitted in a :Correct Answer JV/WOS Your Answer
JV/WOS
Select The Blank Question FRNs are issued for a maturity period of ________ and are normally redeemed in one shot. Correct Answer 5-7 years Your Answer True/False
5-7 years
Question
Bid rate is bidders buying rate and offered rate is bidders selling rate. Correct Answer True Your Answer
True
True/False Question
Corporates are allowed to raise funds abroad up to $ 15 million as short term finance if they have EPCG license. Correct Answer True Your Answer
False
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer IMF, World Bank and local markets Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer
Euro Commercial Papers
Select The Blank Question Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer
OECD
Multiple Choice Multiple Answer Question For issuing a Documentary credit The applicant is required to provide to the issuing bank details about Correct Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents Your Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents , Authority who will issue the documents Multiple Choice Multiple Answer
Question
The crisis in global capital market in 2002-04 was due to
Correct Answer Collapse of Enron , Collapse of Argentina's currency board , The war against terrorism Your Answer Collapse of Enron , Collapse of Argentina's currency board , The war against terrorism Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Select The Blank Question "Flip-Flop', 'Mini-Max', 'Capped' 'Perpetual' are the various types of ________. Correct Answer Floating Rate Note (FRN) Your Answer
Floating Rate Note (FRN)
Select The Blank Question Combined Certificate of Origin and Value are required by ________. Correct Answer Commonwealth Countries Your Answer
Commonwealth Countries
Multiple Choice Single Answer Question Bank with lowest Bid for fees etc and which undertakes the responsibility of loan syndication is called :Correct Answer The lead bank- leadmanager- arranger Your Answer
The lead bank- leadmanager- arranger
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question Which functions does the Bill of Lading serve? Correct Answer It is a document of title to goods. , It is receipt of goods Your Answer It is a document of title to goods. , It is receipt of goods Multiple Choice Single Answer Question A Bank quotes interest rate of 9.50/10.00 for six months dollar deposit, here the bid rate is :Correct Answer 9.50% P.A. Your Answer 9.50% P.A.
Multiple Choice Single Answer Question What is Sovereign Risk? Correct Answer Risk of lending to the government of a country Your Answer Risk of lending to the government of a country Multiple Choice Single Answer Question How does ICC help poor countries? Correct Answer Attract Foreign Direct investments togeather with UNCTAD Your Answer Attract Foreign Direct investments togeather with UNCTAD Multiple Choice Multiple Answer Question As per BIS, recovery from the recent crisis in global capital market was mainly due to Correct Answer Rapid and appropriate policy response in US and other countries , Increase in Foreign Direct Investments , free flow of credit Your Answer Rapid and appropriate policy response in US and other countries , Increase in Foreign Direct Investments , free flow of credit True/False Question Out of 15 member countries in European Union 12 countries commiteed themselves for a single currency. Correct Answer False Your Answer True True/False Question In red clause credit some clauses are printed in Red ink. Correct Answer True Your Answer True True/False Question Transfer of funds for investment abroad is allowed freely. Correct Answer True Your Answer False Select The Blank Question EEFC account holder is allowed to have ________ facility. Correct Answer Cheque book and nomination Your Answer Credit card, safe custody, safe deposit locker without any fee Select The Blank Question Fixed interest rate Eurobond without the option to convert to equity is known as ________. Correct Answer Straight Debt Your Answer Interest rate swap True/False Question An Indian importing goods from USA pays dollars in India. Correct Answer False Your Answer True Match The Following Question Correct Answer Your Answer PP Form Export Declaration form Export Declaration form Health Certificate Fumigation certificate Export
Declaration form Certificate of Inspection As per importers requirement Export Declaration form Certifiate of Origin Export Promotion Council Export Declaration form Multiple Choice Multiple Answer Question For issuing a Documentary credit The applicant is required to provide to the issuing bank details about Correct Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents Your Answer The purchase-sales contract, the mode of payment, the tenor of payment , The track record of the buyer and seller Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given on behalf of a certain person to another person in different country , It is a stamped agreement and is not valid unless it is signed by the issuer True/False Question CFR = FOB plus freight paid by seller +insurance paid by seller. Correct Answer False Your Answer True Select The Blank Question Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer OPEC True/False Question Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer True Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your Answer Supplemental Reserve Policy Multiple Choice Multiple Answer Question What are the sources of raising funds for exports? Correct Answer Suppliers credit , Forfaiting Your Answer Suppliers credit , Forfaiting , Buyers credit , Foreign currency or Rupee finance
True/False Question Normally the forward contracts are booked for making huge profits.
Correct Answer False Your Answer False True/False Question Head office of ICC is in Paris because of its First President Eliance Clementel. Correct Answer True Your Answer False Select The Blank Question A ________ Bill of lading does not specify the terms and conditions of carriage. Correct Answer Short Form Your Answer Short Form Multiple Choice Single Answer Question What is the volume of the world's total speculative transactions? Correct Answer Roughly 90 % of the total turnover Your Answer 70% of the total turnover True/False Question Till August 1994 India was following the Indirect Methodof Rate quotation. Correct Answer False Your Answer False Select The Blank Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme. Correct Answer Overseas investment facility Your Answer Overseas investment facility Multiple Choice Single Answer Question Mr P has exported goods in May 2005 and is expecting payment of Euro 25000 by the last week of Sept 2005. Give details of the forward contract he can book :Correct Answer He can book a sale contract any time from May 2005 till Mid Sept 2005, for Euro 25000 or less, for maturity last week of Sept. Your Answer He can book a contract for Forward Purchase, any time from May 2005 till Mid Sept 2005, for Euro 25000 or less, for maturity last week of Sept. Select The Blank Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________. Correct Answer Shelf Registration Your Answer Shell Registration Multiple Choice Multiple Answer Question Which common details will be available in any bill of Lading? Correct Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment Your Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment , The name of the vessel , The date of transportation and contract of transportation Select The Blank Question Under the ________ standard the Country's Central Bank promised to buy back the currency at certain rate of Gold. Correct Answer Gold Your Answer Interest
Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer ADRs Select The Blank Question The type of trade where a country sells orange juice in return for cars is known as ________. Correct Answer Counter Trade Your Answer Non money trade Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment to EOUs in India for services rendered by them , Payment of Gifts of GBP 5000 per year per donor Multiple Choice Multiple Answer Question Under the liberalisation through FEMA, what can an AD offer to the clients, without the prior permission of RBI or Government? Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Your Answer Caps and collars, and forward rate agreements , Good and competitive exchange rates and cross currency rates Multiple Choice Multiple Answer Question Sterling Market is attractive for an international investor because Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Your Answer Choice of issuing medium term and long term bonds , Less controls and less formalities to be completed , Linking of issues to currency swaps Multiple Choice Single Answer Question Under which contracts the seller pays the import duty for the buyer? Correct Answer DDP Your Answer DDP True/False Question PP Form is required when exports are made to any country by post parcel on value payable basis. Correct Answer False Your Answer True Multiple Choice Multiple Answer Question What were the immediate causes of converting the group of 5 into group of 7 and convene their meeting in late 1985? Correct Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased Your Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased , The heads of G5 insisted to have a meeting , Failure of IMF to control the exchange rates
Multiple Choice Single Answer Question What are the powers of money changers? Correct Answer Purchase and sell foreign currency notes and travellers cheques Your Answer Purchase and sell foreign currency notes and travellers cheques, give import and export finance Multiple Choice Single Answer Question Who can open an EEFC account? Correct Answer Individuals , firms, companies, resident in India Your Answer Individuals , firms, companies, resident in India Multiple Choice Single Answer Question What is the role of ICC towards WTO? Correct Answer To provide world business recommendations to WTO Your Answer To further the cause of WTO Select The Blank Question Position in a currency is said to be ________, when sales equal purchases. Correct Answer Square Your Answer Awkward Select The Blank Question Hotels and Airline companies are allowed to receive payments in Indian rupees from foreign tourist without insisiting on ________. Correct Answer Encashment certificate Your Answer Encashment certificate Multiple Choice Multiple Answer Question Why is Bill of Exchange a Quasi Negotiable Instrument? Correct Answer It represents title to goods , It is issued under Sale of Goods act Your Answer It represents title to goods , It is issued under Transportation act , It is issued under Bill of exchange act Multiple Choice Single Answer Question Which details about forward contracts do the Exchange Controls verify ? Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000 Your Answer Details of all contracts booked and cancelled beyond a specified limit Multiple Choice Single Answer Question In the context of International economy,the period between 1920s and 1930s is known as Correct Answer Great Depression Your Answer Great Depression Multiple Choice Multiple Answer Question What do you understand by Commercial Risk? Correct Answer Protracted default by the buyer, Insolvency of the buyer Your Answer Protracted default by the buyer, Insolvency of the buyer
LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question
Tranche' is a managed issue of securities in smaller denominations. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them , Payment of Gifts of GBP 5000 per year per donor Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Select The Blank Question The creditworthiness of futures exchange is maintained through imposition of ________. Correct Answer Margin Your Answer
Penalty
Select The Blank Question After the second world war many countries adopted the route of ________ to give facelift to sagging economies. Correct Answer Devaluation of their currencies Your Answer True/False Question
Change of governments
FEDAI does not require RBI permission to frame and revise rules of business
Correct Answer False Your Answer
True
Select The Blank Question Position in a currency is said to be ________, when sales equal purchases. Correct Answer Square Your Answer
Deficit
Multiple Choice Multiple Answer Question Underwriters are more attracted to NIF issue because of :Correct Answer Lesser risks , Increased returns , Easy marketability features Your Answer
Lesser risks , Increased returns , Easy marketability features
True/False Question
Import finance is nomally available at rates of interest cheaper than domestic finance rates. Correct Answer False Your Answer
True
Multiple Choice Single Answer Question What is the Indian Govt's obligation of becoming member of IMF? Correct Answer Ensure orderly exchange arrangement, promote stable exchange rate Your Answer Introduce gold standard in exchange rate Multiple Choice Multiple Answer Question Export finance Correct Answer Preshipment credit , Post shipment credit , Duty Draw back Your Answer
Preshipment credit , Post shipment credit
Select The Blank Question ________ enables bankers to extend purchase, negotiation or discount of export bills. Correct Answer Post shipment credit guarantee Your Answer
Specific shipment policy
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Cost of evluation does not justify analysis
Country risk analysis
Cost of evluation does not Banks are ahead justify analysis
Stock market analysis
Banks are ahead
Factors' values
Weightages %
Factors' values
Drop the investment project
Select The Blank Question In mid 1992 ________ rejected the ratification of Maastricht treaty Correct Answer Denmark Your Answer
Austria
Multiple Choice Multiple Answer Question Name the services provided by 'Reuter 3000' in forex market:Correct Answer Quotation of forex rates, interest rates , Electronic broking by matching the rates Your Answer Quotation of forex rates, interest rates , Electronic broking by matching the rates , Demat securities Multiple Choice Multiple Answer Question What options does the merchant have while booking a forward contract? Correct Answer Delivery on a Fixed date, within six months , Delivery on a date between two days separated by a period of maximum one month Your Answer Delivery on a Fixed date, within six months , Delivery on a date between two days separated by a period of maximum one month Multiple Choice Single Answer Question What is the volume of the world's total speculative transactions? Correct Answer Roughly 90 % of the total turnover Your Answer
Roughly 90 % of the total turnover
True/False Question
ECGC offers isurance protection to Indian exporters againt payment risks. Correct Answer True Your Answer
True
True/False Question
CFR = FOB plus freight paid by seller + insurance paid by seller.
Correct Answer False Your Answer
False
Multiple Choice Multiple Answer Question Sterling Market is attractive for an international investor because Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Your Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Multiple Choice Multiple Answer Question In a documentary credit the word document means :Correct Answer Specified documents of title, transportation, insurance , Specified certificates, and other papers required as per the regulations in the buyers country Your Answer Specified documents of title, transportation, insurance Multiple Choice Single Answer Question What is the meaning of right to buy or sell the future contract? Correct Answer An Option Your Answer
A future
Select The Blank Question ECGC provides cover to an Indian contractor for construction work abroad under ________. Correct Answer Construction works policy Your Answer
Maturity Factoring
True/False Question
An Indian importing goods from USA pays dollars in India.
Correct Answer False Your Answer True/False Question
True
An Indian exporting goods to New York receives dollars in New York.
Correct Answer True Your Answer
True
Select The Blank Question A Dealer bought USD at 47.5000, in morning and the USD is quoted in the noon at 1 USD =48.2000/49.7000, then he has the opportunity for ________. Correct Answer Arbitrage Your Answer
Swap
Multiple Choice Single Answer Question The Direct Investment abroad through share swap arrangement under normal route is permitted in a :Correct Answer JV/WOS Your Answer
JV/WOS
Select The Blank Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________. Correct Answer Shelf Registration Your Answer
Shelf Registration
Multiple Choice Single Answer Question How many Countries participated in the third survey on Foreign Exchange, coordinated by BIS in 1992? Correct Answer 26 Your Answer
26
Multiple Choice Single Answer Question A Spot Transaction between Japanese Yen and Sterling carried out on Friday in Singapore, the settlement day will be Correct Answer Following Tuesday if it is a working day in all the three centers Your Answer
Following Thursday if it is a working day in all the three centers
Select The Blank Question Legalised invoice is also called ________ invoice. Correct Answer Visaed
Your Answer
Proforma
Multiple Choice Single Answer Question Who are the members of the Special committee on Indian Direct Investments abroad, for normal route? Correct Answer Representatives of Ministry of finance, Ministry of Economic affairs, Ministry of Commerce and RBI Your Answer Representatives of Ministry of finance, Ministry of Economic affairs, Ministry of Commerce and RBI Select The Blank Question For opening JV/WOS in Nepal, Bhutan, the ceiling for financial commitment per annum is ________. Correct Answer Rs. 350 crore Your Answer
Rs. 350 crore
Select The Blank Question The price at which a person may purchase or sell the underlying ________. Correct Answer Exercise or strike price Your Answer
Market price
True/False Question
Installment credit is issued for specific quantities of goods to be shipped every week or month. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question The participants in the Forex Markets are :Correct Answer Non banking entities wishing to exchange currencies, , Banks and their clients , Speculators, arbitragers Your Answer Non banking entities wishing to exchange currencies, , Banks and their clients , Speculators, arbitragers Multiple Choice Multiple Answer Question What were the primary objectives of the group of seven countries? Correct Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries Your Answer Bring down the external value of US Dollar , Bring some stability to exchange rates of all the countries True/False
Question
Transfer of funds for investment abroad is allowed freely.
Correct Answer True Your Answer
False
Multiple Choice Single Answer Question In which currency can the EEFC account be opened? Correct Answer Any Convertible currency Your Answer
Any Convertible currency
Multiple Choice Single Answer Question In International trade, Advance payment means :Correct Answer Providing up front cash Your Answer
Providing up front cash
Multiple Choice Single Answer Question Who books an option forward contract? Correct Answer Party who is not definite about crystallisation of delivery date Your Answer
Party who is speculator
Multiple Choice Single Answer Question What is a "Received for shipment" bill of lading ? Correct Answer It is not considered by the banks as a good security for financing. Your Answer
It is considered a very safe document
Multiple Choice Multiple Answer Question What are margins, with reference to futures market? Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts , Given by buyer or seller as commission Multiple Choice Single Answer Question How does ICC access Govt and influence Governmental decisions? Correct Answer Through national committees
Your Answer
Through national committees
Match The Following Question
Correct Answer
Your Answer
Investment under Automatic route
Form ODA
Form ODA
Proposal under non automatic route
RBI
Form NAR
Proposal under Normal route
Special Committee
Special Committee
Investment by partnerships not in core activity
form ODI
form ODI
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an unconditional undertaking True/False Question
Services of a Paying bank are taken when currencies of exporters country or the importers country is not involved in the transaction. Correct Answer False Your Answer
True
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single Answer Question Fixed, Floating or Limited flexibility are used in the context of Correct Answer Exchange Rates Your Answer
Exchange Rates
Select The Blank Question Exim acts as ________ for Government, RBI and IDBI . Correct Answer An agent Your Answer
Authorised dealer
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade Your Answer
Public Limited companies without international presence
Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer
Anticipatory Credit
Multiple Choice Multiple Answer Question Which of these are considered as miscellaneous documents? Correct Answer Packing list , Weight certificate Your Answer
Packing list , Insurance cover note , PP Form
Select The Blank Question In ________ transaction the delivery is postponed from the agreed date. Correct Answer Rollover Your Answer True/False Question
Forward
Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations
Correct Answer True Your Answer
False
Multiple Choice Multiple Answer Question World Bank gives loans for Correct Answer Structural Adjustments , Infrastructure projects , BOP problems Your Answer
Structural Adjustments , BOP problems , Long term Working capital
Select The Blank Question The credit which does not constitute a legally binding undertaking between the bank and the beneficiary is ________. Correct Answer Revocable Credit Your Answer
Transferable credit
Multiple Choice Multiple Answer Question What non funded facilities are granted by Export Import Bank of India? Correct Answer Guarantee for Bid bond, execution of export project, for borrowings abroad, for retention of money , Advance payment Guarantee, performance guarantee Your Answer Advance payment Guarantee, performance guarantee , Letter of credits True/False Question
There is no difference between CIP and CIF contracts except the mode of transportation. Correct Answer True Your Answer
False
Multiple Choice Single Answer Question What is a coupon swap? Correct Answer Swap contract exchange of fixed rate payment system for a floating rate system Your Answer Exchange of fixed deposits to equity True/False Question
An Indian exporting goods to New York receives dollars in New York. Correct Answer True Your Answer
True
True/False Question
The credit rating of World Bank is high in the world Capital market because it operates at the debt equity ratio of 1:2 Correct Answer False Your Answer
True
Match The Following Question
Correct Answer
Certifiate of Origin
Export Promotion Council Risk covering Document
PP Form
Export Declaration form
Export Declaration form
Health Certificate
Fumigation certificate
Finance document
Certificate of Inspection
As per importers requirement
As per importers requirement
Your Answer
True/ False Question
Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True Your Answer
True
Multiple Choice Single Answer Question Who can open an EEFC account? Correct Answer Individuals , firms, companies, resident in India Your Answer
Individuals , firms, companies, resident in India
Multiple Choice Single Answer Question The 'On Board' bill of lading means bill of lading evidencing that :Correct Answer The goods are put on board a ship for shipment Your Answer
A bill of lading evidencing terms and conditions of carriage printed on it
Match The Following Question
Correct Answer
Your Answer
Netherlands
Guilder
Franc
Germany
Mark
Peseta
Ireland
Punt
Dollar
Luxemberg
Franc
Guilder
Multiple Choice Multiple Answer Question The World Bank Group Consists of Correct Answer International Development Association , International finance Corporation , Multinational Investment Guarantee Agency Your Answer Multinational Investment Guarantee Agency , Multinational Insurance Guarantee Agency Select The Blank Question Any company involved in foreign exchange transactions is exposed to ________ risk. Correct Answer Currency Your Answer
Currency
True/False Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True Your Answer
False
True/False Question
Floating rate notes are traded in secondary market also.
Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value Multiple Choice Multiple Answer Question The investor is in the money when :Correct Answer The exercise price is below the spot price for a call option , The exercise price is above the spot price for a put option Your Answer The exercise price is below the spot price for a call option , The exercise price is above the spot price for a put option , The
exercise price is above the spot price for a call option True/False Question
The working of the IBRD and IMF in recent has blurred the difference between the two Correct Answer True Your Answer
True
Select The Blank Question For importing goods in India RBI insists on ________ value. Correct Answer CIF Your Answer
FOB
Select The Blank Question Position in a currency is said to be ________, when sales equal purchases. Correct Answer Square Your Answer
Surplus
Select The Blank Question FRNs are issued for a maturity period of ________ and are normally redeemed in one shot. Correct Answer 5-7 years Your Answer
Up to 1 year
Multiple Choice Multiple Answer Question What are the functions of International Finance Corporation? Correct Answer Help private enterprise by financing projects , Provide technical assistance to private enterprise Your Answer Help private enterprise by financing projects , Provide technical assistance to private enterprise Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer Sharing of risk of non payment by supplier Your Answer
Sharing risk of Non payment by the Syndicate of Banks giving loans
Select The Blank
Question
A Documentary credit issued on the strength of another documentary credit is known as ________. Correct Answer Back to Back credit Your Answer
Green clause credit
Multiple Choice Single Answer Question Value date means the date on which :Correct Answer Delivery of both the currencies will be made Your Answer
Value of currency will be paid in terms of goods or commodities
True/False Question
FEDAI does not require RBI permission to frame and revise rules of business Correct Answer False Your Answer
True
Select The Blank Question The major industrial power whose economy was not affected after the II world war was ________. Correct Answer USA Your Answer
UK
Multiple Choice Multiple Answer Question Major investors in NIF are :Correct Answer Commercial Banks , Non banking Finance companies , Insurance Companies Your Answer Non banking Finance companies , Insurance Companies , Individual investors abroad Multiple Choice Multiple Answer Question The crisis in global capital market in 2002-04 was due to Correct Answer Collapse of Enron , Collapse of Argentina's currency board , The war against terrorism Your Answer Collapse of Argentina's currency board , The war against terrorism Multiple Choice Multiple Answer Question Criteria for investment abroad under automatic route :Correct Answer Activity for investment is core activity of Indian Company. , Total Financial commitment in JV/WOS as per prescribed ceiling
Your Answer
Activity for investment is core activity of Indian Company. , Credit Rating of the CO to be A++
Multiple Choice Multiple Answer Question How does a company use swap to restructure debt, in its balance sheet? Correct Answer By resorting to floating rate from fixed rate , By resorting to fixed rate from floating rate Your Answer By resorting to floating rate from fixed rate , By resorting to fixed rate from floating rate , Prepayment of existing debts Select The Blank Question ________ is the price at which the market maker is prepared to borrow the money. Correct Answer Bid rate Your Answer
Selling price
Multiple Choice Single Answer Question Which type of Convertibility of Rupee launched in March 1992 ? Correct Answer Limited convertibility Your Answer
Limited convertibility
Multiple Choice Multiple Answer Question A Forward purchase contract was booked with an authorised dealer and subsequently cancelled .It :Correct Answer Can be booked again with another dealer , Can be booked again with the same dealer Your Answer Can be booked again with another dealer , Can be booked only for un booked portion of the contract. Multiple Choice Single Answer Question Name the members of Exchange Banks association :Correct Answer Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar, Your Answer
Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar,
Multiple Choice Single Answer Question If a dealer of securities is quoting rate as 200-250 then the rate 200 signifies which rate with reference to him? Correct Answer Bid rate Your Answer
Bid rate
Multiple Choice Single Answer
Question
What do you call a 'decreasing principal swap'?
Correct Answer Amortizing swap Your Answer
Amortizing swap
Multiple Choice Single Answer Question When does a bank have an absolute advantage, in respect of interest rate swaps? Correct Answer When it has advantage under fixed interest system as well as floating interest rate system Your Answer When it has advantage under fixed interest system as well as floating interest rate system Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Your Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers
Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Your Answer
Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates
Select The Blank Question ________ is the agency of ICC which deals with the maritime crime. Correct Answer
International Maritime Bureau
Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer
Buffer Stock Facility
Your Answer
Buffer Stock Fa cility
True/False Question Correct Answer
Cross currency forward contract is not meaningful if original contract is in Rupees to USD True
Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer Your Answer
The exercise or strike price, the amount , The expiration date and time, the method of payment The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option
Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer
US Dollar
Your Answer
US Dollar
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify Cost of evluation does not justify analysis analysis
Stock market analysis
Banks are ahead
Factors' values
1
Weightages %
Factors' values
100% of total
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Your Answer
Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer
Monday
Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer
Other managed Floating
Your Answer
Pegged to Single currency
Match The Following Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity is delivered
Last date of exercising option
Note issuance facility
Euronotes
Euronotes
Bearer security issued in currency other than that of the country of issue
Eurobonds
Eurobonds
Margin on future
Peformance bond or security deposit
Peformance bond or security deposit
True/False Question Correct Answer
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. False
Your Answer
False
True/False Question Correct Answer
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. True
Your Answer
True
Multiple Choice Multiple Answer
2
Question
What are margins, with reference to futures market?
Correct Answer
Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts
Your Answer
Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer
USD 1 trillion
Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer Your Answer
By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Which enables the investor to market the same in the secondary market
Multiple Choice Single Answer Question What was the official foreign currency reserve of the grou p of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer
Preshipment credit beyond six months for construction and turnkey projects abroad
Your Answer
Preshipment credit up to six months for construction and turnkey projects abroad
Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily. Correct Answer Economies Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions?
3
Correct Answer
US Dollar
Your Answer
US Dollar
Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer
Control by Government'
Your Answer
Recurrence
Select The Blank Question Th e Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer
Sharing of risk of non payment by supplier
Your Answer
Sharing risk of Non payment by the Syndicate of Banks giving loans
True/False Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer Your Answer
It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Your Answer
True/False Question
Payment Payment Payment Payment
of to of to
hotel bills abroad, payment for expenses on Heart operation abroad , EOUs in India for services rendered by them hotel bills abroad, payment for expenses on Heart operation abroad , EOUs in India for services rendered by them
Funding Options in domestic yen market are Futures, FRAs, Call and put options.
4
Correct Answer
True
Your Answer
True
True/False Question Correct Answer
There is no difference between CIP and CIF contracts except the mode of transportation. True
Your Answer
True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer
Companies which have international trade
Your Answer
Companies which have international trade
Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Primary activity
Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer
An Irrevocable credit
Your Answer
An Irrevocable credit
True/False Question Correct Answer
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. False
Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer
Preshipment credit , Post shipment credit , Duty Draw back
Your Answer
Preshipment credit , Post shipment credit , Buyers credit
5
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer
Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer
Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value
Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Your Answer
Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital ma rket Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Your Answer
Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Advertisement which lists the managers, underwriters , , List of Providers of recently floated issue
Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer
Buy when you are having short position
Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer? Correct Answer Your Answer
He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies
Select The Blank
6
Question
Forward margin makes a currency cheaper then the currency is at ________.
Correct Answer
Discount
Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer
Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Your Answer
Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer
Prices of capital market instruments change and are expected to change drastically
Your Answer
Prices of capital market instruments change and are expected to change drastically
True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer
False
Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Your Answer
Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been bla ck listed
1 5 – 10 13 – 14 15 – 17 18 – 19 20 – 23 24 – 27 31 – 35 36 – 39 40 – 41 43 – 46 47 – 49 50 – 53 55 – 57 61 – 66 67 – 69 70 – 71 73 – 74 75 -76 79 – 83 84 – 88
7
89 - 92 95 – 99 100 – 102 105 – 106 109 – 114 117 – 123 124 – 127 128 – 129 131 – 137 138 – 141 143- 147 148 – 152 155 – 157 158 – 161 163 169 174 179 183 189 191
– 166 – 173 – 177 – 180 – 183 – 190
195 199 203 – 204 207- 212 215 – 217 218 -219 220 – 221
Chapter – 1 – Introduction to international capital markets
1 Ero currency market ; Domestic market ; US, Japan Switzerland ; uk, australia canada ; european conters in ECU ; Euro ; Asian doller market ; forex marker 1 SDR ; ECU ; US dollar ; German ; Swiss ; Japanees ; France ; Canada ; Australia; 2 Chaper - 2 - International financial Markets - The U.S.Dollar Market ; pricing ; federal reservice board; curency ; central bank of US ; 5 The Japanese Yen Market ; Mof; Long Term Prime Rate ; 1970 japanese 6 The Sterling Market ; 20th 19th century 1979 ; OECD Organization for economic co-operation & development EMS Exchange rate Mechanism; FRN ; Bulldog; 7 the EURO Market has been discussed in the nex chapter Recent development in international financial markets ; septer 11 enron 7 LtCN (Long term capital Management Brazil china and mexico; 8 1990 ; 1980 ; severe tests financial system; securitization forces banks ; attractive to browwerw; legal issues flexibility ; financial market development segement of ; 9 swaps cash flow ; roject related; gain access to international ; marketability ; new financing techniques; 10 Chapter – 3 – International Monetary and Financial System 13 1945 ; 1944 ; intenrational world Bank for reconstruciton and development; second world war was european ; IMF International
13
8
Monetary Fund; Gold standard first world war The country's Central Bank agreed to buy back their currency at a certain rate of gold; 13 melting down of gold was freely allowed 13 There was unrestricted movement of gold (I.e. import and / export 14 The total money supply in the country was determined by the quantum of gold reserves in the country 14 1870 ; 1914 ; 1821 ; 1834 ; 1870 ; European countries gold standard in 1933 ; 1930 International Monetary Co-operation ; IBRD ; IMF ; 14 popularly known as world bank IMF ; the international monetary fund 1945 ; 1971 ; 25 years ; aims 15 SDR ((special drawing rights ) 25% 1960 ; 1963 ; Gross domestic product; 5 years ; SDR 146 bn to SDR 212 ; 45% ; 1998 ; Two parts 16 Funding Facilities ; Regular Facilities ; Special facilities ; restore tranche credit tranche ; compensatory and contingency financing facility (CCFF) ; 16 Extended arrangement (Extended Fund Facility EEF) ; Buffer stock Financing Facility ; 16 Standard Arrangement (Enlarged Arrears Policy ) ; Supplemental Reserve Policy (Supplemental Reserve Policy (SRP 17 Reserve Tranche ; Credit Tranches ; Stand - By Arrangement 17 Extended arrangement or extended fund facilities (EFF) 18 Special Facilities ; CCFF ; Buffer Stock Financing Facility ; BSFF ; Supplemental Resource Facility (SRF) ; 1997 18 Enhance Structural Adjustment Facility (ESAF) ; The fixed exchange rate system US dollars 35 ounce of gold 19 Problem faced by the fixed exchange rate system ; 1960 ; value apprehension ; delay in adjustment 20 failure of fixed rate system ; the european monetary system (EMS) European Community 20 Currency Snake ; 1973 ; EMS EC ECU European Currency Unit ; SDR ; ERM ; DM ; matrix german bundesbank 21 EM ; PST ; ERM ; Economic and monetary Union ; Top of Form LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question Correct Answer
Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations True
Your Answer
True
True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer
False
Your Answer
False
Select The Blank Question The rate of interest on rupee finance for exports is not exceeding ________ less than PLR. Correct Answer 0.025
9
Your Answer
50 basis points over LIBOR
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer Your Answer
The exercise or strike price, the amount , The expiration date and time, the method of payment The exercise or strike price, the amount , The expiration date and time, the method of payment
Multiple Choice Single Answer Question In the syndicated loan arrangement the borrower has to execute :Correct Answer
Single Principal loan agreement
Your Answer
Single Principal loan agreement
True/False Question
At Least one principal Lender bank is essential for issue of the ADR or GDR.
Correct Answer
False
Your Answer
True
Multiple Choice Single Answer Question US financial system is the freest system because Correct Answer
Institutions can introduce new products and instuments at the price of their choice.
Your Answer
Institutions can introduce new products and instuments at the price of their choice.
Multiple Choice Single Answer Question In a coupon swap who is called the buyer? Correct Answer
One who pays the fixed rate of interest
Your Answer
One who pays the fixed rate of interest
True/False Question
Till August 1994 India was following the Indirect Methodof Rate quotation.
Correct Answer
False
Your Answer
False
Select The Blank Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme. Correct Answer Overseas investment facility Your Answer
Overseas investment facility
Multiple Choice Single Answer
10
Question Correct Answer
Under the automatic route of Direct Investment Abroad, what is the restriction on market purchases? 50% of the net worth of the investing company
Your Answer
50% of the net worth of the investing company
Multiple Choice Single Answer Question What are the powers of money changers? Correct Answer
Purchase and sell foreign currency notes and travellers cheques
Your Answer
Purchase and sell foreign currency notes and travellers cheques and also Give export finance
Select The Blank Question Any company involved in foreign exchange transactions is exposed to ________ risk. Correct Answer
Currency
Your Answer
Currency
Multiple Choice Multiple Answer Question What are the features of Settlement price ? Correct Answer Your Answer
Price established to determine the Price established to determine the
by the clearing house at the end of each trading session , It is used net gain, loss, margin call and next days price limits by the clearing house at the end of each trading session , It is used net gain, loss, margin call and next days price limits
Multiple Choice Multiple Answer Question What are the activities of ICC? Correct Answer
Aribtration and dispute resolving , Canvass for open trade combat commercial crime
Your Answer
Aribtration and dispute resolving , Canvass for open trade combat commercial crime , Increased Govt regulation of Business
True/False Question
Cause of increase in cost of public issues Underwriting fees , selling commission
Correct Answer
True
Your Answer
False
Select The Blank Question The currency swaps used ________. Correct Answer
To lower the risk of currency exposure
Your Answer
To lower the risk of currency exposure
True/False Question
The Option period in the forward contract is at the option of the Banker, hence the bank has to be very conservative in quoting rates.
11
Correct Answer
False
Your Answer
True
Multiple Choice Multiple Answer Question Which factors affect the exchange rates in short time period? Correct Answer
Demand and supply, interest rates, inflation, , Sentiment, Speculation
Your Answer
Demand and supply, interest rates, inflation, , Sentiment, Speculation , GDP,Balance of trade and payment,Unemployment
Match The Following Question
Correct Answer
Your Answer
Departure
EXW
EXW
Main carriage paid
CFR
CFR
Main carriage unpaid
FAS
FAS
Arrival
DES
DES
Multiple Choice Multiple Answer Question Sterling Market is attractive for an international investor because Correct Answer Your Answer
True/False Question
Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds , Linking of issues to currency swaps
In red clause credit some clauses are printed in Red ink.
Correct Answer
True
Your Answer
False
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Your Answer
Payment Payment Payment Payment
of to of to
hotel bills abroad, payment for expenses on Heart operation abroad , EOUs in India for services rendered by them hotel bills abroad, payment for expenses on Heart operation abroad , EOUs in India for services rendered by them
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the bid rate for USD? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
12
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Multiple Answer Question Criteria for investment abroad under automatic route :Correct Answer Your Answer
Activity for investment is core activity of Indian Company. , Total Financial commitment in JV/WOS as per prescribed ceiling Activity for investment is core activity of Indian Company. , Total Financial commitment in JV/WOS as per prescribed ceiling
Multiple Choice Multiple Answer Question Who can issue the Certificate of Inspection? Correct Answer
Export Inspection Council , Person authorised by Importer.
Your Answer
Export Inspection Council , Person authorised by Importer.
Multiple Choice Single Answer Question Large number of exporters from which country are enjoying the privilege of receiving up front cash from importers in Russia? Correct Answer United Kingdom Your Answer
True/False Question
United Kingdom
Correct Answer
In developed markets, speculators play important role in determining the trend of currency rates. True
Your Answer
True
Select The Blank Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________. Correct Answer Shelf Registration Your Answer
Shelf Registration
Select The Blank Question In Overseas market the forward rate is generally quoted on the basis of ________. Correct Answer
Fixed date
Your Answer
Calendar month
Select The Blank Question Forward Margin makes a currency costlier then the currency is at ________.
13
Correct Answer
Premium
Your Answer
Discount
Multiple Choice Multiple Answer Question These are the parties to the documentary credit :Correct Answer
Negotiating Bank, advising bank , Reimbursing bank, Confirming bank
Your Answer
Negotiating Bank, advising bank , Reimbursing bank, Confirming bank
Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Your Answer
Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Single Answer Question Fixed, Floating or Limited flexibility are used in the context of Correct Answer
Exchange Rates
Your Answer
Exchange Rates
Select The Blank Question In mid 1992 ________ rejected the ratification of Maastricht treaty Correct Answer
Denmark
Your Answer
UK
Multiple Choice Multiple Answer Question Under the liberalisation through FEMA, what can an AD offer to the clients, without the prior permission of RBI or Government? Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Your Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Multiple Choice Single Answer Question To whom is an AD required to report the cancellation of forward contracts? Correct Answer
No one at all.
Your Answer
To Reserve Bank of India, fortnightly
Select The Blank Question ECGC provides cover to an Indian contractor for construction work abroad under ________. Correct Answer Construction works policy
14
Your Answer
True/False Question
Export Performance Guarantee
Correct Answer
The Negotiating bank examines the documents submitted by the seller and makes payment if they comply the terms and conditions of the LC. True
Your Answer
True
Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Multiple Answer Question What are the sources of raising funds for exports? Correct Answer
Suppliers credit , Forfaiting
Your Answer
Suppliers credit , Forfaiting
Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer
Discount
Your Answer
Discount
Multiple Choice Single Answer Question Name the common forex derivatives :Correct Answer
Options, futures
Your Answer
Options, futures
True/False Question
Country risk analysis is a futile exercise in the background of cost of analysis.
Correct Answer
True
Your Answer
False
Select The Blank Question Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer
OECD
15
Match The Following Question
Correct Answer
Your Answer
Issues linked with LIBOR,LIBID,LIMEAN
FRNs
FRNs
Issue of bonds without fixed rate of interest, linked to short term interest rate in the global market
FloatingRate Note
FloatingRate Note
Issue of loans internationally,through arranger, underwriter,co manager, for a large amount for sharing risk of lending
Syndicated Loans
Syndicated Loans
Equity issues in the foreign markets either as direct investments or portfolio investments.
American or Global Depository Receipts
American or Global Depository Receipts
Bottom of Form
16
Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Your Answer
Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates
Select The Blank Question ________ is the agency of ICC which deals with the maritime crime. Correct Answer
International Maritime Bureau
Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer
Buffer Stock Facility
Your Answer
Buffer Stock Facility
True/False Question Correct Answer
Cross currency forward contract is not meaningful if original contract is in Rupees to USD True
Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer Your Answer
The exercise or strike price, the amount , The expiration date and time, the method of payment The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option
Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer
US Dollar
Your Answer
US Dollar
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Factors' values
1
Weightages %
Factors' values
100% of total
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Your Answer
Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer
Monday
Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer
Other managed Floating
Your Answer
Pegged to Single currency
Match The Following Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity is delivered
Last date of exercising option
Note issuance facility
Euronotes
Euronotes
Bearer security issued in currency Eurobonds other than that of the country of issue
Eurobonds
Margin on future
Peformance bond or security deposit
True/False Question
Peformance bond or security deposit
Correct Answer
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. False
Your Answer
False
True/False Question Correct Answer
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. True
Your Answer
True
Multiple Choice Multiple Answer
2
Question
What are margins, with reference to futures market?
Correct Answer
Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts
Your Answer
Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer
USD 1 trillion
Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer Your Answer
By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Which enables the investor to market the same in the secondary market
Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer
Preshipment credit beyond six months for construction and turnkey projects abroad
Your Answer
Preshipment credit up to six months for construction and turnkey projects abroad
Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily. Correct Answer Economies Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer
US Dollar
3
Your Answer
US Dollar
Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer
Control by Government'
Your Answer
Recurrence
Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer
Sharing of risk of non payment by supplier
Your Answer
Sharing risk of Non payment by the Syndicate of Banks giving loans
True/False Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer Your Answer
It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Your Answer
True/False Question
Payment Payment Payment Payment
of to of to
hotel bills abroad, payment for expenses on Heart operation abroad , EOUs in India for services rendered by them hotel bills abroad, payment for expenses on Heart operation abroad , EOUs in India for services rendered by them
Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer
True
Your Answer
True
4
True/False Question Correct Answer
There is no difference between CIP and CIF contracts except the mode of transportation. True
Your Answer
True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer
Companies which have international trade
Your Answer
Companies which have international trade
Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Primary activity
Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer
An Irrevocable credit
Your Answer
An Irrevocable credit
True/False Question Correct Answer
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. False
Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer
Preshipment credit , Post shipment credit , Duty Draw back
Your Answer
Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand
5
Correct Answer
Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer
Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value
Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Your Answer
Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Your Answer
Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue
Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer
Buy when you are having short position
Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer? Correct Answer Your Answer
He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies
Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer
Discount
6
Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer
Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Your Answer
Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer
Prices of capital market instruments change and are expected to change drastically
Your Answer
Prices of capital market instruments change and are expected to change drastically
True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer
False
Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Your Answer
Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed
Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Your Answer True/False Question
Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue
Correct Answer
Out of 15 member countries in European Union 12 countries commiteed themselves for a single currency. False
Your Answer
False
True/False Question Correct Answer
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. False
Your Answer
False
Select The Blank
7
Question
A Credit can be a confirmed credit only if it is also ________.
Correct Answer
An Irrevocable credit
Your Answer
An Irrevocable credit
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Banks are ahead
Weightages %
Factors' values
Factors' values
Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Multiple Choice Single Answer Question What is the meaning of a country risk? Correct Answer Your Answer
Risk of events in a particular country which may cause loss to a person dealing with that country Risk of events in a particular country which may cause loss to a person dealing with that country
Multiple Choice Multiple Answer Question Which common details will be available in any bill of Lading? Correct Answer Your Answer
Names of consigner, consignee , The port of loading and unloading, contract of shipment Names of consigner, consignee , The port of loading and unloading, contract of shipment
Multiple Choice Single Answer Question What help does EXIM Bank provide under the scheme 'Direct Financial assistance to exporters'? Correct Answer Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer Your Answer Funds are provided under deferred payment terms to Indian exporter for credit to foreign buyer Match The Following Question
Correct Answer
Your Answer
PP Form
Export Declaration form
Export Declaration form
8
Health Certificate
Fumigation certificate
Fumigation certificate
Certificate of Inspection
As per importers requirement
As per importers requirement
Certifiate of Origin
Export Promotion Council
Export Promotion Council
Select The Blank Question Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer
OECD
Multiple Choice Single Answer Question How many INCOTERMS are there in "Departure" Group? Correct Answer
One
Your Answer
Two
Multiple Choice Single Answer Question What is a bill of lading? Correct Answer
Transport document representing movement of goods by water.
Your Answer
Transport document representing movement of goods by water.
True/False Question Correct Answer
The American Dollar market comprises of the domestic segment of USD the offshore segment of USD. True
Your Answer
True
Select The Blank Question The creditworthiness of the futures seller and the futures buyer is ________ because of the presence of the Futures exchange. Correct Answer Irrelevant Your Answer
Irrelevant
Multiple Choice Single Answer Question What was the collective assessment of International financial market about the country risk of many cnuntries in the last decade? Correct Answer Whatever it was, was disastrously wrong. Your Answer
Whatever it was, was disastrously wrong.
Multiple Choice Multiple Answer Question How is the entry into any conuntry's money market or capital market is restricted?
9
Correct Answer
Because of different tax systems , Because of different credit standards
Your Answer
Because of different tax systems , Because of different credit standards
True/False Question
Till August 1994 India was following the Indirect Methodof Rate quotation.
Correct Answer
False
Your Answer
True
Select The Blank Question In Indian interbank market forward rates are generally quoted on the basis of ________. Correct Answer Calendar month Your Answer
Calendar month
Select The Blank Question Rupee was liberalised on ________ account in 1993, and on current account in 1994. Correct Answer
Trade
Your Answer
Trade
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer
Other managed Floating
Your Answer
Other managed Floating
Multiple Choice Multiple Answer Question Which of these are considered as miscellaneous documents? Correct Answer
Packing list , Weight certificate
Your Answer
Packing list , Weight certificate
True/False Question
Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer
True
Your Answer
True
Select The Blank Question ECGC provides cover to an Indian contractor for construction work abroad under ________. Correct Answer Construction works policy Your Answer
Construction works policy
10
Multiple Choice Single Answer Question Equity can be raised internationallly by a company through :Correct Answer
Fund raising, underwriting, hedging , arbitration operations
Your Answer
Fund raising, underwriting, hedging , arbitration operations
Multiple Choice Single Answer Question How many Countries participated in the third survey on Foreign Exchange, coordinated by BIS in 1992? Correct Answer 26 Your Answer
True/False Question
26
In red clause credit some clauses are printed in Red ink.
Correct Answer
True
Your Answer
True
True/False Question
Prior approval of RBI is needed for payment of all imports.
Correct Answer
False
Your Answer
True
Multiple Choice Multiple Answer Question The factors which affect the performance of an option are:Correct Answer
Underlying asset price , Time before expiration, rate of interest
Your Answer
Underlying asset price , Time before expiration, rate of interest
Multiple Choice Single Answer Question What is the immediate cause for the growth of futures and options in the last two decades? Correct Answer Increase in volatile trading conditions Your Answer
Management of external risk
Select The Blank Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme. Correct Answer Overseas investment facility Your Answer
Overseas investment facility
Select The Blank Question To make the export more competitive and remunerative, the Indian Govt extends ________ facility.
11
Correct Answer
Cash Incentives
Your Answer
Advance against cash incentives
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Your Answer
Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent
Multiple Choice Multiple Answer Question External Commercial Debt market :Correct Answer
Prevails in Domestic market of foreign country , Prevails in offshore markets
Your Answer
Prevails in Domestic market of foreign country , Prevails in offshore markets
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer
Companies which have international trade
Your Answer
Companies which have international trade
Multiple Choice Multiple Answer Question What do you understand by 'Foreign Exchange Risk'? Correct Answer Your Answer
The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows The change in value of currency alters the home currency value of an asset , liability, , The change in value of currency alters the home currency value of profit, loss, or future cash flows , Certainty of an event which would happen in favour of the importer/ exporter
Multiple Choice Single Answer Question For a spot transaction carried out on Tuesday, where both centers have holiday on Wednesday, currencies will be exchanged on :Correct Answer Thursday if it is a working day at both the centers Your Answer
Friday
Multiple Choice Single Answer Question Which details about forward contracts do the Exchange Controls verify ? Correct Answer
Particulars of cancellation of forward cover for the equivalent of USD 500,000
Your Answer
Particulars of cancellation of forward cover for the equivalent of USD 500,000
True/False Question
In the forward rate quotations between two currencies, when one currency is at discount the other currency is at premium.
12
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer
Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer
Which are convertible , Which have liquidity confirmed in Euro market operations
Select The Blank Question A Bill of exchange payable 45 days from date of shipment, is a means of ________ from seller to the buyer. Correct Answer Credit Your Answer
Credit
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer
Preshipment credit beyond six months for construction and turnkey projects abroad
Your Answer
Preshipment credit beyond six months for construction and turnkey projects abroad
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Your Answer
True/False Question
Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Correct Answer
Import finance is nomally available at rates of interest cheaper than domestic finance rates. False
Your Answer
False
Multiple Choice Multiple Answer Question Major investors in NIF are :Correct Answer
Commercial Banks , Non banking Finance companies , Insurance Companies
Your Answer
Commercial Banks , Non banking Finance companies
Select The Blank Question In mid 1992 ________ rejected the ratification of Maastricht treaty Correct Answer
Denmark
Your Answer
Denmark
13
True/False Question Correct Answer
Indian companies are now allowed to freely invest abroad up to $1.5 million, raised through GDE or EEFC without prior permission from RBI. False
Your Answer
True
Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Your Answer
Select The Blank Question
Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates
________ is the agency of ICC which deals with the maritime crime.
Correct Answer
International Maritime Bureau
Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer
Buffer Stock Facility
Your Answer
Buffer Stock Facility
True/False Question Correct Answer
Cross currency forward contract is not meaningful if original contract is in Rupees to USD True
Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer Your Answer
The exercise or strike price, the amount , The expiration date and time, the method of payment The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option
Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer
US Dollar
Your Answer
US Dollar
Match The Following
14
Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Factors' values
Weightages %
Factors' values
100% of total
Select The Blank Question Correct Answer Your Answer
Global capital market can be understood from the study of ________. Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country
Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer
Monday
Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer
Other managed Floating
Your Answer
Pegged to Single currency
Match The Following Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity is delivered
Last date of exercising option
Note issuance facility
Euronotes
Euronotes
Bearer security issued in currency Eurobonds other than that of the country of issue
Eurobonds
Margin on future
Peformance bond or security deposit
True/False Question
Peformance bond or security deposit
Correct Answer
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. False
Your Answer
False
15
True/False Question Correct Answer
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. True
Your Answer
True
Multiple Choice Multiple Answer Question What are margins, with reference to futures market? Correct Answer Your Answer
Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts
Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer
USD 1 trillion
Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer Your Answer
By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Which enables the investor to market the same in the secondary market
Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Your Answer
Select The Blank Question
Preshipment credit beyond six months for construction and turnkey projects abroad Preshipment credit up to six months for construction and turnkey projects abroad
Correct Answer
Over the years ________has been the most widely accepted currency in international capital market. American Dollar
Your Answer
American Dollar
Select The Blank Question
As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily.
16
Correct Answer
Economies
Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer
US Dollar
Your Answer
US Dollar
Select The Blank Question
________ is the acid test for events to be included in country risk.
Correct Answer
Control by Government'
Your Answer
Recurrence
Select The Blank Question Correct Answer
The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Brussels
Your Answer
Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer
Sharing of risk of non payment by supplier
Your Answer
Sharing risk of Non payment by the Syndicate of Banks giving loans
True/False Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer
True
Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer
Your Answer
It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country
Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer
Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them
17
Your Answer
True/False Question
Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them
Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer
True
Your Answer
True
True/False Question Correct Answer
There is no difference between CIP and CIF contracts except the mode of transportation. True
Your Answer
True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer
Companies which have international trade
Your Answer
Companies which have international trade
Select The Blank Question Correct Answer
When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Core activity
Your Answer
Primary activity
Select The Blank Question
A Credit can be a confirmed credit only if it is also ________.
Correct Answer
An Irrevocable credit
Your Answer
An Irrevocable credit
True/False Question Correct Answer
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. False
Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
18
Multiple Choice Multiple Answer Question Export finance Correct Answer
Preshipment credit , Post shipment credit , Duty Draw back
Your Answer
Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand Correct Answer
Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer
Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value
Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Your Answer
Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Your Answer
Select The Blank Question
Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue
Correct Answer
Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Euro Commercial Papers
Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer
Buy when you are having short position
Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer?
19
Correct Answer Your Answer
Select The Blank Question
He gets of rates He gets of rates
the flexibility to exposure , He is exposed to additional risk of movement between 3 currencies the flexibility to exposure , He is exposed to additional risk of movement between 3 currencies
Forward margin makes a currency cheaper then the currency is at ________.
Correct Answer
Discount
Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer Your Answer
True/False Question
Prices of capital market instruments change and are expected to change drastically Prices of capital market instruments change and are expected to change drastically
JV means Joint venture and WOS means World of Security.
Correct Answer
False
Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Your Answer
Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed
LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question Which functions does the Bill of Lading serve? Correct Answer It is a document of title to goods., It is receipt of goods Your Answer It is a document of title to goods. ,It is receipt of goods Multiple Choice Single Answer Question A Bank quotes interest rate of 9.50/10.00for six months dollar deposit, here the bid rate is :Correct Answer 9.50% P.A. Your Answer 9.50% P.A. Multiple Choice Single Answer
20
Question What is Sovereign Risk? Correct Answer Risk of lending to the governmentof a country Your Answer Risk of lending to the government of acountry Multiple Choice Single Answer Question How does ICC help poor countries? Correct Answer Attract Foreign Direct investments togeather with UNCTAD Your Answer Attract Foreign Direct investments togeather with UNCTAD Multiple Choice Multiple Answer Question As per BIS, recovery from the recent crisis in global capital market was mainly due to Correct Answer Rapid and appropriate policy response in US and other countries , Increase in Foreign Direct Investments , free flow of credit Your Answer Rapid and appropriate policy response in US and other countries , Increase in Foreign DirectInvestments , free flow of credit True/False Question Out of 15 member countries in European Union 12 countries commiteed themselves for a single currency. Correct Answer False Your Answer True True/False Question In red clause credit some clauses are printed in Red ink. Correct Answer True Your Answer True True/False Question Transfer of funds for investment abroad is allowed freely. Correct Answer True Your Answer False Select The Blank Question EEFC account holder is allowed to have ________ facility. Correct Answer Cheque book and nomination Your Answer Credit card, safe custody, safe deposit locker without any fee Select The Blank Question Fixed interest rate Eurobond without the option to convert to equity is known as ________. Correct Answer Straight Debt Your Answer Interest rate swap True/False Question An Indian importing goods from USA pays dollars in India. Correct Answer False Your Answer True Match The Following Question Correct Answer Your Answer PP Form Export Declaration form Export Declaration form Health Certificate Fumigation certificate Export Declaration form Certificate of Inspection As per importers requirement Export Declaration form Certifiate of Origin Export Promotion Council Export Declaration form Multiple Choice Multiple Answer
21
Question For issuing a Documentary credit The applicant is required to provide to the issuing bank details about Correct Answer The purchase-sales contract, the mode of payment, the tenor of payment , The documents required, the names of authorities who would issue the documents Your Answer The purchase-sales contract, the mode of payment, the tenor of payment , The track record of the buyer and seller Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given on behalf of a certain person to another person in different country , It is a stamped agreement and is not valid unless it is signed by the issuer True/False Question CFR = FOB plus freight paid by seller + insurance paid by seller. Correct Answer False Your Answer True Select The Blank Question Even after liberalization of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer OPEC True/False Question Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer True Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your Answer Supplemental Reserve Policy Multiple Choice Multiple Answer Question What are the sources of raising funds for exports? Correct Answer Suppliers credit , Forfaiting Your Answer Suppliers credit , Forfaiting , Buyers credit , Foreign currency or Rupee finance True/False Question Normally the forward contracts are booked for making huge profits. Correct Answer False Your Answer False True/False Question Head office of ICC is in Paris because of its First President Eliance Clementel. Correct Answer True Your Answer False Select The Blank Question A ________ Bill of lading does not specify the terms and conditions of carriage.
22
Correct Answer Short Form Your Answer Short Form Multiple Choice Single Answer Question What is the volume of the world's total speculative transactions? Correct Answer Roughly 90 % of the total turnover Your Answer 70% of the total turnover True/False Question Till August 1994 India was following the Indirect Methodof Rate quotation. Correct Answer False Your Answer False Select The Blank Question For setting up joint ventures abroad or equity participation abroad, EXIM bank provides funds under ________ Scheme. Correct Answer Overseas investment facility Your Answer Overseas investment facility Multiple Choice Single Answer Question Mr P has exported goods in May 2005 and is expecting payment of Euro 25000 by the last week of Sept 2005. Give details of the forward contract he can book :Correct Answer He can book a sale contract any time from May 2005 till Mid Sept 2005, for Euro 25000 or less, for maturity last week of Sept. Your Answer He can book a contract for Forward Purchase, any time from May 2005 till Mid Sept 2005, for Euro 25000 or less, for maturity last week of Sept. Select The Blank Question In US Capital Market a Company prepares all the necessary documents in advance of the public issue under the facility known as ________. Correct Answer Shelf Registration Your Answer Shell Registration Multiple Choice Multiple Answer Question Which common details will be available in any bill of Lading? Correct Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment Your Answer Names of consigner, consignee , The port of loading and unloading, contract of shipment , The name of the vessel , The date of transportation and contract of transportation Select The Blank Question Under the ________ standard the Country's Central Bank promised to buy back the currency at certain rate of Gold. Correct Answer Gold Your Answer Interest Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer ADRs Select The Blank Question The type of trade where a country sells orange juice in return for cars is known as
23
________. Correct Answer Counter Trade Your Answer Non money trade Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad , Payment to EOUs in India for services rendered by them Your Answer Payment to EOUs in India for services rendered by them , Payment of Gifts of GBP 5000 per year per donor Multiple Choice Multiple Answer Question Under the liberalisation through FEMA, what can an AD offer to the clients, without the prior permission of RBI or Government? Correct Answer Hedges, interest rate swaps, currency swaps. , Caps and collars, and forward rate agreements Your Answer Caps and collars, and forward rate agreements , Good and competitive exchange rates and cross currency rates Multiple Choice Multiple Answer Question Sterling Market is attractive for an international investor because Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds Your Answer Choice of issuing medium term and long term bonds , Less controls and less formalities to be completed , Linking of issues to currency swaps Multiple Choice Single Answer Question Under which contracts the seller pays the import duty for the buyer? Correct Answer DDP Your Answer DDP True/False Question PP Form is required when exports are made to any country by post parcel on value payable basis. Correct Answer False Your Answer True Multiple Choice Multiple Answer Question What were the immediate causes of converting the group of 5 into group of 7 and convene their meeting in late 1985? Correct Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased Your Answer Many Industries in USA had become uncompetitive with imports , In USA the Trade protectionnism had increased , The heads of G5 insisted to have a meeting , Failure of IMF to control the exchange rates Multiple Choice Single Answer Question What are the powers of money changers? Correct Answer Purchase and sell foreign currency notes and travellers cheques Your Answer Purchase and sell foreign currency notes and travellers cheques, give import and export
24
finance Multiple Choice Single Answer Question Who can open an EEFC account? Correct Answer Individuals , firms, companies, resident in India Your Answer Individuals , firms, companies, resident in India Multiple Choice Single Answer Question What is the role of ICC towards WTO? Correct Answer To provide world business recommendations to WTO Your Answer To further the cause of WTO Match The Following Question Correct Answer Your Answer -Swap price Difference in prices of two legs of buying and selling Quoting rate for both buying and selling a currency -Euro Market Market in Euro currencies Market in Euro currencies -Making market Quoting rate for both buying and sellinga currency Difference in prices of two legs of buying and selling -Spread Price difference between bid and offer Maket of 'Euro' Select The Blank Question Position in a currency is said to be ________, when sales equal purchases. Correct Answer Square Your Answer Awkward Select The Blank Question Hotels and Airline companies are allowed to receive payments in Indian rupees from foreign tourist without insisiting on ________. Correct Answer Encashment certificate Your Answer Encashment certificate Multiple Choice Multiple Answer Question Why is Bill of Exchange a Quasi Negotiable Instrument? Correct Answer It represents title to goods , It is issued under Sale of Goods act Your Answer It represents title to goods , It is issued under Transportation act , It is issued under Bill of exchange act Multiple Choice Single Answer Question Which details about forward contracts do the Exchange Controls verify ? Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000 Your Answer Details of all contracts booked and cancelled beyond a specified limit Multiple Choice Single Answer Question In the context of International economy ,the period between 1920s and 1930s is known as Correct Answer Great Depression Your Answer Great Depression Multiple Choice Multiple Answer Question What do you understand by Commercial Risk? Correct Answer Protracted default by the buyer, Insolvency of the buyer Your Answer Protracted default by the buyer, Insolvency of the buyer
25
Multiple Choice Multiple Answer Question What schemes have been floated by RBI for facilitating Inter bank transactions? Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market intelligence cell to study and monitor developments in Forex Market Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional foreign currency available to ADs at cheaper rates Select The Blank Question ________ is the agency of ICC which deals with the maritime crime. Correct Answer International Maritime Bureau Your Answer
International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your Answer
Buffer Stock Facility
True/False Question
Cross currency forward contract is not meaningful if original contract is in Rupees to USD Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question What does a speculator accept while dealing with an option? Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of payment Your Answer The exercise or strike price, the amount , The expiration date and time, the method of payment , The Market report of the exchange which trades the option Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer US Dollar Your Answer
US Dollar
Match The Following Question
Correct Answer
Your Answer
Intolerable risk
Drop the investment project
Drop the investment project
Country risk analysis
Cost of evluation does not justify analysis
Cost of evluation does not justify analysis
Stock market analysis
Banks are ahead
Factors' values
26
Weightages %
Factors' values
100% of total
Select The Blank Question Global capital market can be understood from the study of ________. Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the country Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday Your Answer
Monday
Multiple Choice Single Answer Question Under which category of exchange rate did the Indian Rupee came from June 92? Correct Answer Other managed Floating Your Answer
Pegged to Single currency
Match The Following Question
Correct Answer
Your Answer
Maturity of future
Time when actual commodity is delivered
Last date of exercising option
Note issuance facility
Euronotes
Euronotes
Bearer security issued in currency Eurobonds other than that of the country of issue
Eurobonds
Margin on future
Peformance bond or security deposit
True/False Question
Peformance bond or security deposit
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument.
Correct Answer False Your Answer
False
True/False Question
The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos. Correct Answer True Your Answer
True
Multiple Choice Multiple Answer
27
Question
What are margins, with reference to futures market?
Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency for honouring contracts Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct Answer USD 1 trillion Your Answer
USD 1 trillion
Multiple Choice Single Answer Question NIF is basically an agreement :Correct Answer By underwriting bank to support funding for a certain period, against which borrowers can issue short term papers Your Answer Which enables the investor to market the same in the secondary market
Multiple Choice Single Answer Question What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992? Correct Answer USD 275 Billion Your Answer
USD 275 Billion
Multiple Choice Single Answer Question What Preshipment facility is granted by EXIM Bank to an exporter? Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad Your Answer
Preshipment credit up to six months for construction and turnkey projects abroad
Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct Answer American Dollar Your Answer
American Dollar
Select The Blank Question As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily. Correct Answer Economies Your Answer
Currencies
Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer US Dollar
28
Your Answer
US Dollar
Select The Blank Question ________ is the acid test for events to be included in country risk. Correct Answer Control by Government' Your Answer
Recurrence
Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer
Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer Sharing of risk of non payment by supplier Your Answer
True/False Question
Sharing risk of Non payment by the Syndicate of Banks giving loans
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True Your Answer
True
Multiple Choice Multiple Answer Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an undertaking given on behalf of a certain person to another person in different country Multiple Choice Multiple Answer Question Which debits are permitted to EEFC accounts? Correct Answer Payment Payment Your Answer Payment Payment True/False Question
of to of to
hotel bills abroad, payment for expenses on Heart operation abroad , EOUs in India for services rendered by them hotel bills abroad, payment for expenses on Heart operation abroad , EOUs in India for services rendered by them
Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer True Your Answer
True
29
True/False Question
There is no difference between CIP and CIF contracts except the mode of transportation.
Correct Answer True Your Answer
True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade Your Answer
Companies which have international trade
Select The Blank Question When an Indian Company earns at least 50% of its average turnover from a particular activity then that activity is considered as ________. Correct Answer Core activity Your Answer
Primary activity
Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct Answer An Irrevocable credit Your Answer
An Irrevocable credit
True/False Question
The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total. Correct Answer False Your Answer
False
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer
USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer Preshipment credit , Post shipment credit , Duty Draw back Your Answer
Preshipment credit , Post shipment credit , Buyers credit
Multiple Choice Multiple Answer Question Internationally only those currencies are in demand
30
Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations Your Answer
Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value
Multiple Choice Multiple Answer Question What are the functions of Asian Development Bank? Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market Multiple Choice Multiple Answer Question What does the word '"Tombstone" stand for? Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recently floated issue Select The Blank Question Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your Answer
Euro Commercial Papers
Multiple Choice Single Answer Question Why are various methods of financial analysis used for assessing a cross border project ? Correct Answer To weed out unviable projects and rank profitable ones Your Answer
To weed out unviable projects and rank profitable ones
Multiple Choice Single Answer Question Examples of hedge are: Correct Answer Buy when you are having short position Your Answer
Buy when you are having short position
Multiple Choice Multiple Answer Question What is the effect of cross currency option on the customer? Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of rates between 3 currencies Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount
31
Your Answer
Discount
Multiple Choice Single Answer Question Why does a person need protection from unfavourable movement of exchange rate? Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit Your Answer
Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Multiple Choice Single Answer Question The capital market is said to be volatile when Correct Answer Prices of capital market instruments change and are expected to change drastically Your Answer
True/False Question
Prices of capital market instruments change and are expected to change drastically
JV means Joint venture and WOS means World of Security.
Correct Answer False Your Answer
False
Multiple Choice Multiple Answer Question What is the criteria for an Indian Company for Direct Investment abroad? Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed
32
Related Documents
International Finance Combined
November 2019 17
International Finance
November 2019 21
International Finance
June 2020 15
International Finance
November 2019 25
International Finance
October 2019 22