International Finance Match The Following Question Correct AnswerIntolerable risk Drop the investment projectCountry risk analysis Cost of evaluation does not justify

analysisStock market analysis

Banks are ahead

Weightages % Factors' values Match The Following Question Correct AnswerMaturity of future Time when actual commodity is

deliveredNote issuance facility Euro notesBearer security issued in currency other than that of the country of issue

Eurobonds

Margin on future Performance bond or security deposit

  Multiple Choice Multiple AnswerQuestion: Export 3financeCorrect Answer: Preshipment credit, Post shipment credit, Duty Draw back Multiple Choice Single AnswerQuestion: In a coupon swap who is called the buyer?Correct Answer: One who pays the fixed rate of interest Multiple Choice Single AnswerQuestion: What are the powers of money changers?Correct Answer: Purchase and sell foreign currency notes and travellers cheques Multiple Choice Multiple AnswerQuestion: 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 Multiple Choice Multiple AnswerQuestion: What are the activities of ICC?Correct Answer: Aribtration and dispute resolving, Canvass for open trade combat commercial crime Select The BlankQuestion: The currency swaps used ________.Correct Answer: To lower the risk of currency exposure 

Multiple Choice Multiple AnswerQuestion: Which factors affect the exchange rates in short time period?Correct Answer: Demand and supply, interest rates, inflation, Sentiment, Speculation Multiple Choice Multiple AnswerQuestion: Who can issue the Certificate of Inspection?Correct Answer: Export Inspection Council, Person authorised by Importer. Select The BlankQuestion: In Overseas market the forward rate is generally quoted on the basis of ________.Correct Answer: Fixed date Multiple Choice Single AnswerQuestion: Fixed, Floating or Limited flexibility are used in the context ofCorrect Answer: Exchange Rates Multiple Choice Single AnswerQuestion: Name the common forex derivatives:-Correct Answer: Options, futures Match The Following Question Correct AnswerIssues linked with LIBOR,LIBID,LIMEAN FRNsIssue of bonds without fixed rate of interest, linked to short term interest rate in the global market

FloatingRate Note

Issue of loans internationally,through arranger, underwriter,co manager, for a large amount for sharing risk of lending

Syndicated Loans

Equity issues in the foreign markets either as direct investments or portfolio investments

American or Global Depository Receipts

  Multiple Choice Single AnswerQuestion: What is the meaning of a country risk?Correct Answer: Risk of events in a particular country which may cause loss to a person dealing with that country Match The Following Question Correct AnswerPP Form Export Declaration formHealth Certificate Fumigation certificateCertificate of Inspection As per importers

requirementCertifiate of Origin Export Promotion Council Multiple Choice Single AnswerQuestion: How many INCOTERMS are there in "Departure" Group?Correct Answer: One 

Multiple Choice Single AnswerQuestion: What is a bill of lading?Correct Answer: Transport document representing movement of goods by water. Multiple Choice Multiple AnswerQuestion: 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 True/FalseQuestion: Prior approval of RBI is needed for payment of all imports.Correct Answer: False Multiple Choice Multiple AnswerQuestion: The factors which affect the performance of an option are:-Correct Answer: Underlying asset price, Time before expiration, rate of interest Multiple Choice Multiple AnswerQuestion: External Commercial Debt market:-Correct Answer: Prevails in Domestic market of foreign country, Prevails in offshore markets Multiple Choice Multiple AnswerQuestion: What do you understand by 'Foreign Exchange Risk'? True/FalseQuestion: In the orward rate quotations between two currencies, when one currency is at discount the other currency is at premium.Correct Answer: True Select The BlankQuestion: A Bill f exchange payable 45 days from date of shipment, is a means of ________ from seller to the buyer.Correct Answer: Credit True/FalseQuestion: Import inance is nomally available at rates of interest cheaper than domestic finance rates.Correct Answer: False Multiple Choice Multiple AnswerQuestion: Major nvestors in NIF are:-Correct Answer: Commercial Banks, Non banking Finance companies, Insurance Companies True/FalseQuestion: Indian ompanies 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 Multiple Choice Multiple AnswerQuestion: Which unctions does the Bill of Lading serve?Correct Answer: It is a document of title to goods, It is receipt of goods 

Multiple Choice Single AnswerQuestion: What is Sovereign Risk?Correct Answer: Risk of lending to the governmentof a country Multiple Choice Single AnswerQuestion: How does ICC help poor countries?Correct Answer: Attract Foreign Direct investments togeather with UNCTAD True/FalseQuestion: Normally the forward contracts are booked for making huge profits.Correct Answer: False Multiple Choice Single AnswerQuestion: Who can open an EEFC account?Correct Answer: Individuals, firms, companies, resident in India Multiple Choice Single AnswerQuestion: What is the role of ICC towards WTO?Correct Answer: To provide world business recommendations to WTO Match The Following Question Correct AnswerSwap price Difference in prices of two legs of buying and

sellingEuro Market Market in Euro currenciesMaking market Quoting rate for both buying and sellinga currencySpread Price Difference between bid and offer  Select The BlankQuestion: The counter party in option is ________.Correct Answer: The exchange Select The BlankQuestion: An exchange rate for $ was 48.2050, it is now 48.2075, then one says that it has moved ________ basis pointsCorrect Answer: 25 Multiple Choice Single AnswerQuestion: What do you understand by a swap?Correct Answer: 2 counter parties agree to exchange streams of payments over a period of time True/FalseQuestion: ECGC offers isurance protection to Indian exporters againt payment risks.Correct Answer: True Select The BlankQuestion: Value 3of USDollar is ________ in the world market but RBI is trying to match the Rupee value with it.

Correct Answer: Depreciating Multiple Choice Single AnswerQuestion: Borrower from a developing country can borrow from US marketCorrect Answer: Only if it has high credit rating and the country's Govt gives a guarantee for the same. Multiple Choice Single AnswerQuestion: What 3was the purpose of reviewing FERA 1973 in the year 1993?Correct Answer: Economic Liberalisation relating to Foreign trade and Foreign investments Select The BlankQuestion: Legalised invoice is also called ________ invoice.Correct Answer: Visaed Multiple Choice Single AnswerQuestion: In Import financing through trust receipts, with whom does the ownership of goods remain?Correct Answer: Bank releasing the import documents Multiple Choice Multiple AnswerQuestion: The integrated treasury branches of commercial banks handle which type of business?Correct Answer: Forex transactions, Derivatives transactions, Mney market and bond market transactions Match The Following Question Correct AnswerLast Stage Form a single currencyThe First stage in the Europeand and Monetary Union (EMU)

Free movement of capital in EC

Stage II in EMU Establishment of European Monetary InstituteStage III in EMU Members to meet the convergence criteria and fix

the exchange rates Multiple Choice Single AnswerQuestion: What do you call a 'decreasing principal swap'?Correct Answer: Amortizing swap Match The Following Question Correct AnswerInvestment under Automatic route Form ODAProposal under non automatic route RBIProposal under Normal route Special CommitteeInvestment by partnerships not in core activity

Form ODI

 Multiple Choice Multiple AnswerQuestion: Name the services provided by 'Reuter 3000' in forex market:-

Correct Answer: Quotation of forex rates, interest rates, Electronic broking by matching the rates Multiple Choice Single AnswerQuestion: Before abandoning the Fixed exchange rate system, the Dollar gold parity was fixed by USA atCorrect Answer: USD 35 per Ounce of gold Multiple Choice Single AnswerQuestion: A country needs external commercial borrowings to:-Correct Answer: Meet the adverse balance of payments position Multiple Choice Single AnswerQuestion: With whom can an exporter or importer book the forward contract?Correct Answer: Authorised dealer/Authorised person Multiple Choice Multiple AnswerQuestion: World Bank gives loans forCorrect Answer: Structural Adjustments, Infrastructure projects, BOP problems Multiple Choice Single AnswerQuestion: How does ECGC protect exporters against risks for export finance?Correct Answer: Issuing various insurance policies covering different risks connected with exports at nominal premium True/FalseQuestion: Sterling FRNs are issued in Europe, USA, AsiaCorrect Answer: False Multiple Choice Multiple AnswerQuestion: Transaction exposures arises because of:-Correct Answer: The cost of settlement of future payment changes, Receipt denominated in a foreign currency varies due to exchange rate fluctuation Multiple Choice Single AnswerQuestion: Name the single most important factor which may devastate the economic viability of an operation in international trade:-Correct Answer: Unfavourable fluctuation in the exchange rate Select The BlankQuestion: In ________ Contract seller is like a domestic seller in destination countryCorrect Answer: DDP Select The BlankQuestion: For importing goods in India RBI insists on ________ value.Correct Answer: CIF True/FalseQuestion: In forward sales, the delivery refers to actual cash flows on due date.Correct Answer: True 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 Multiple Choice Single AnswerQuestion: What is the primary concern of the buyer in the International Trade?Correct Answer: To get the goods of the quantity and quality demanded in the stipulated time Multiple Choice Single AnswerQuestion: Whose permission was necessary for forming the Association of Foreign Exchange Dealers, in India?Correct Answer: Reserve Bank of India Multiple Choice Single AnswerQuestion: A Specific date forward contract can be booked so as to be:-Correct Answer: Payable on a specific date of the calendar month Multiple Choice Multiple AnswerQuestion: Which factors influence the valuation of cash flows?Correct Answer: Incomplete capital market, Availability of projkect specific concessional finance, Multiple Choice Multiple AnswerQuestion: 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 Multiple Choice Multiple AnswerQuestion: Which of these are not considered as good securities by the banker?Correct Answer: House Airway bill, Postal Receipt Select The BlankQuestion: "Flip-Flop', 'Mini-Max', 'Capped' 'Perpetual' are the various types of ________.Correct Answer: Floating Rate Note (FRN) True/FalseQuestion: Terms in an Irrevocable credit can not be alterred at all.Correct Answer: False Select The BlankQuestion: An option on a future is ________.Correct Answer: Derivative on a derivative Multiple Choice Multiple AnswerQuestion: How does RBI control Exports?Correct Answer: Through Rule like "Full value of Export bills must be realised in 180 days", Through Rule like “Export must be denominated In a currency of the Importing country or a freely convertible currency" Multiple Choice Single AnswerQuestion: 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. Match The Following Question Correct AnswerMerchant banking Portfolio managementSecuritization Issue of debt in the form of tradeable

securityPrime borrower Highest credit ratingTraditional banking service Loans and cash credit against security  Multiple Choice Multiple AnswerQuestion: 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 True/FalseQuestion: In UK in london Market the Indirect Quote Method is still adopted.Correct Answer: True Select The BlankQuestion: ________ is 3drawn by taking mean of the bid and offered rates.Correct Answer: Middle rate Multiple Choice Multiple AnswerQuestion: The crisis in global capital market in 2002-04 was due toCorrect Answer: Collapse of Enron, Collapse of Argentina's currency board, The war against terrorism Select The BlankQuestion: The option which can be exercised on the maturity date and not before it is known as________.Correct Answer: European Option True/FalseQuestion: Floating rate notes are traded in secondary market also.Correct Answer: True Multiple Choice Multiple AnswerQuestion: What facilities are proposed by Sodhani Committee for NRIs?Correct Answer: Housing Loan to NRI staff of Indian Companies, NRIs be permitted to invest in MMMF Multiple Choice Single AnswerQuestion: What is the effect of interweaving of national economies?Correct Answer: Govt decisions have stronger international repercussions Select The Blank

Question: For opening JV/WOS in Nepal, Bhutan, the ceiling for financial commitment per annum is _______Correct Answer: Rs. 350 crore Select The BlankQuestion: Partnership firm not eligible for Overseas Direct Investment needs to apply to RBI Approval in form.Correct Answer: ODI Multiple Choice Single AnswerQuestion: How many types of documents are required in the International trade?Correct Answer: Six True/FalseQuestion: Multimodal transport document is also known as "IntermobileTransport Document"Correct Answer: True True/FalseQuestion: In a coupon swap the principal amount is identical in the same currency.Correct Answer: True Multiple Choice Multiple AnswerQuestion: Underwriters are more attracted to NIF issue because of:-Correct Answer: Lesser risks, Increased returns, Easy marketability features Multiple Choice Single AnswerQuestion: The financial system of any country consists ofCorrect Answer: Network of commercial banks, domestic and foreign investment banks, NBFCs, etc Multiple Choice Single AnswerQuestion: What is the main purpose of a commercial invoice?Correct Answer: To establish the contract of sale between the two parties. Multiple Choice Single AnswerQuestion: What was the reason for launching swap as an risk hedging instrument?Correct Answer: To avoid the effects of currency control imposed in UK Multiple Choice Multiple AnswerQuestion: The World Bank Group Consists ofCorrect Answer: International Development Association, International finance Corporation, Multinational Investment Guarantee Agency True/FalseQuestion: Long in futures means a commitment to sell futures at a future date.Correct Answer: False Select The BlankQuestion: When credit is made to available to additional beneficiary wholly or partly it is called as ________.Correct Answer: Transferable credit

 True/FalseQuestion: In coupon swap the receiver is the one who receives fixed rate of interest.Correct Answer: True Select The BlankQuestion: After he second world war, International settlements were done through ________.Correct Answer: GoldMatch The Following Question Correct AnswerEuropean option On or after maturityOut of money LossIn The Money ProfitAmerican option Before maturity  Multiple Choice Single AnswerQuestion: As per article IV of IMF for fixed exchange rates member countries agreed toCorrect Answer: Change exchange rates only for correcting fundamental disequilibrium in external payments with IMF approval Multiple Choice Single AnswerQuestion: How 3is the exporter paid through 'import loan'?Correct Answer: The Bank delivers goods to the importer against his 'trustee' receipt, exporter sells the goods and then pays for the sameMultiple Choice Single AnswerQuestion: In case of forward cover for repayment of foreign currency loan extending over a period of more than six months which type of contract is booked?Correct Answer: Forward sales contract on roll over basis Multiple Choice Multiple AnswerQuestion: Which causes may force a country to restrict imports or restrict transfer of payments?Correct Answer: Economic difficulties, Balance of payment problems such as non availability of exchange reserves Select The BlankQuestion: The large flow of money internationally was caused primarily by the oil price hikes engineered by_.Correct Answer: OPEC countries Multiple Choice Single AnswerQuestion: Where does the word derivative originate from?Correct Answer: Mathematics Select The BlankQuestion: The international liquidity problem was tackled effectively by a reserve asset known as ________.Correct Answer: Special drawing right 

Multiple Choice Single AnswerQuestion: When was the first currency swap introduced in world market?Correct Answer: 1970 Multiple Choice Single AnswerQuestion: Name the members of Exchange Banks association:-Correct Answer: Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar, Multiple Choice Multiple AnswerQuestion: 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 Match The Following Question Correct AnswerBond basis to money market basis Bond basisx 360/3653 months LIBOR +2 % PA Floating rate15% P.A. Fixed rateMoney market basis to bond basis Money market basis x 365/360 Multiple Choice Multiple AnswerQuestion: What is the objective of FEDAI?Correct Answer: Laying down terms and conditions of exchange business between Customers and Bankers, Interbank understanding for transacting forex business and exchange rates Select The BlankQuestion:.Correct Answer: Legalised Multiple Choice Multiple AnswerQuestion: What are the main causes of fluctuations in Exchange rates?Correct Answer: Government regulations, fiscal policies, political instabilities, Market demand and supply, sentiments True/FalseQuestion: The credit rating of World Bank is high in the world Capital market because it operates at the debt equity ratio of 1:2Correct Answer: False Multiple Choice Multiple AnswerQuestion: 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 True/FalseQuestion: Out of 15 member countries in European Union 12 countries committed themselves for a single currency.Correct Answer: False 

Multiple Choice Multiple AnswerQuestion: The major cost components of NIF are:-Correct Answer: Underwriters fees, Margins of notes Multiple Choice Single AnswersQuestion: Which invoice is drawn in specific form to be supplied by the consular office of the importer's country, for treatment of preferential tariff rates?Correct Answer: Customs invoice True/FalseQuestion: The amount in EEFC account can be deposited in FCNR account to get interest.Correct Answer: False Multiple Choice Single AnswersQuestion: Under whose administration does ECGC work?Correct Answer: Ministry of Commerce Multiple Choice Multiple AnswerQuestion: What is a 'speculator'?Correct Answer: Trader who is neither hedger nor arbitragor, He takes risks for profit Multiple Choice Single AnswersQuestion: Why does a person need protection from unfavorable movement of exchange rate?Correct Answer: Unfavorable fluctuations in exchange rate can wipe out the normal business profit Multiple Choice Multiple AnswerQuestion: Which general risks are covered by any insurance policy for transit?Correct Answer: Theft, loss, Damage, sea perils, non delivery Select The BlankQuestion: Over the year’s ________has been the most widely accepted currency in international capital market.Correct Answer: American Dollar Match The Following Question Correct AnswerCancellation of contracts above USD 500000 ECDforward Purchase contract currency at premium

Presume earliest delivery

forward purchase contract currency at discount Presume latest deliveryexchange margins FEDAI Multiple Choice Single AnswerQuestion: Who introduced the world’s first exchange traded currency futures?Correct Answer: Chicago Mercantile Exchange Multiple Choice Single AnswerQuestion: Bill for collection system is not secure system for:-

Correct Answer: The seller True/FalseQuestion: Resident Individuals in India can acquire foreign bonus shares on the foreign securities already held by them without prior approval of RBICorrect Answer: True True/FalseQuestion: Both futures and options are traded on a public exchange.Correct Answer: False Multiple Choice Single AnswerQuestion: What was the collective assessment of International financial market about the country risk of many countries in the last decade?Correct Answer: Whatever it was, was disastrously wrong. Multiple Choice Single AnswerQuestion: Who acts as the trustee in case of import loan through trust receipt?Correct Answer: Importer True/FalseQuestion: ADR Level I, is the final step to enter US equity market.Correct Answer: False Select The BlankQuestion: Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major _______ countriesCorrect Answer: OECD Multiple Choice Single AnswerQuestion: What is the cause of Volatility in the exchange market?Correct Answer: Interest rates are changing, Interest rates affect and are affected by exchange rates Multiple Choice Single AnswerQuestion: The severemost problem faced by the Fixed exchange rate system wasCorrect Answer: Inability of US to change gold for dollars Multiple Choice Single AnswerQuestion: If Investment is out of EEFC accounts then:-Correct Answer: Exemption is granted from the criteria of Core activity stipulation under automatic route Select The BlankQuestion: India is a founder member of ________.Correct Answer: IMF Multiple Choice Multiple AnswerQuestion: With reference to ECB, fund raising activity includes:-Correct Answer: Floating rate notes, bonds, debentures, Syndicate loans, issue of shares 

Multiple Choice Multiple AnswerQuestion: What criteria of lending is adopted by The International Development agency while giving loans to a country?Correct Answer: The per capita income of the borrwoing country, The population of the borrwoing country Multiple Choice Single AnswerQuestion: Which authorities require the documents of International trade?Correct Answer: Customs, Excise, Bank Multiple Choice Single AnswerQuestion: Valuation of shares not listed on Stock exchange of a foreign Co is made by:-Correct Answer: Investment Banker True/FalseQuestion: Yankee bond is issued for domestic borrowers.Correct Answer: False True/FalseQuestion: ADR Level I, is the final step to enter US erquity market.Correct Answer: False Multiple Choice Single AnswerQuestion: Value date means the date on which:-Correct Answer: Delivery of both the currencies will be made Multiple Choice Single AnswerQuestion: Who books an option forward contract?Correct Answer: Party who is not definite about crystallisation of delivery date Multiple Choice Single AnswerQuestion: The regulations under FEMA are contained in which manual?Correct Answer: Exchange control Manual Multiple Choice Single AnswerQuestion: In how many groups are INCOTERMS classified?Correct Answer: Four Multiple Choice Single AnswerQuestion: Samurai bonds areCorrect Answer: Foreign yen bonds issued to non resident entities in Japanese Market Multiple Choice Single AnswerQuestion: The First country to get out of Gold Standard wasCorrect Answer: UK Multiple Choice Single AnswerQuestion: ________ of India has granted line of credit to African countries for financing export of Capital goods.Correct Answer: EXIM Bank 

Multiple Choice Single AnswerQuestion: Rupee was liberalized on ________ account in 1993 and on current account in 1994.Correct Answer: Trade Multiple Choice Single AnswerQuestion: A bill of exchange issued by a bank which pays specified sum of money to the holder on a specific date is called:-Correct Answer: Bankers' Acceptance Bond Multiple Choice Multiple AnswerQuestion: 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. True/FalseQuestion: Proposal for Investment abroad by Indian not falling under automatic route is submitted to Exchange Control Department of RBI.Correct Answer: True Select The BlankQuestion: Fixed interest rate Eurobond without the option to convert to equity is known as ____.Correct Answer: Straight Debt Select The BlankQuestion: The type of trade where a country sells orange juice in return for cars is known as __.Correct Answer: Counter Trade Select The BlankQuestion: During the fixed rate exchange system prevailing in India, the intervention currency was ____.Correct Answer: Sterling Pound Multiple Choice Multiple AnswerQuestion: What are the categories of exposures, a person faces in International trade?Correct Answer: Transaction exposure, Translation exposure Multiple Choice Multiple AnswerQuestion: The participants in the Forex Markets are:-Correct Answer: Non banking entities wishing to exchange currencies, Banks and their clients, Speculators, arbitragers Multiple Choice Single AnswerQuestion: European currency UnitCorrect Answer: Basket of Currencies of members of EMS Select The BlankQuestion: Indian Co. intending to make investment under Automatic route needs to submit form _______ to RBI with enclosures.Correct Answer: ODA

 Multiple Choice Multiple AnswerQuestion: In DAF, the frontier means:-Correct Answer: Frontier of exporter's country, Frontier of importer's country Select The BlankQuestion: Profitability of a project in China to an Indian may be enhanced by ________.Correct Answer: Concessionary finance available in China Multiple Choice Single AnswerQuestion: Who issues guidelines for Direct Investments abroad by any Indian?Correct Answer: Exchange Control Department of RBI Multiple Choice Single AnswerQuestion: Exchange Rate meansCorrect Answer: Value of one currency in terms of another Match The Following Question Correct AnswerReturning NRI RFCNRI Deposits FCNR, NRENRIS AND OCBS INVESTMENT IN MMMFEXPORTERS EEFC Select The BlankQuestion: When a credit is made to available to additional beneficiary wholly or partly it is called as_.Correct Answer: Transferable credit True/FalseQuestion: Funding Options in domestic yen market are Futures, FRAs, and Call and put options.Correct Answer: True True/FalseQuestion: ECGC offers insurance protection to Indian exporters against payment risks.Correct Answer: True Select The BlankQuestion: For opening JV/WOS in Nepal, Bhutan, the ceiling for financial commitment per annum is _.Correct Answer: Rs. 350 crore Multiple Choice Single AnswerQuestion: Who arranges for Insurance and transportation under EXW contract?Correct Answer: Buyer arranges and pays Multiple Choice Multiple AnswerQuestion: Which non financial service does EXIM Bank give to an exporter?

Correct Answer: Provide Technical and administrative support, planning, promoting and developing export oriented Industries Select The BlankQuestion: Mostly, countries in the Middle east require ________ invoice, for facilitating import dutiesCorrect Answer: Legalised Multiple Choice Single AnswerQuestion: Why did Govt of India initially exercise controls on foreign receipts and payments?Correct Answer: Conserve and mobilise foreign exchange for war effort Multiple Choice Single AnswerQuestion: How many terms are there under the class " main carriage unpaid"?Correct Answer: Three True/FalseQuestion: Cash flows generated from aforeign project may replace revenue-producing imports to the host countryCorrect Answer: False Match The Following Question Correct AnswerTreasury management Profit makingArbitraging Rate disparityFutures, Options Hedging instrumentsExchange Rate volatility

Speculation

 Select The BlankQuestion: EUROCLEAR, CEDEL are the names of ________ related with the issue of GDR.Correct Answer: Registrars Multiple Choice Single AnswerQuestion: In case of International trade, the role of a banker in case of a bill for collection is that of:-Correct Answer: Routing the documents of transport along with other documents and apply the proceeds as per instructions Select The BlankQuestion: The international liquidity problem was tackled effectively by a reserve asset known as _.Correct Answer: Special drawing right Multiple Choice Single AnswerQuestion: Which type of Convertibility of Rupee launched in March 1992?Correct Answer: Limited convertibility Select The Blank

Question: The ________is a Floating rate index for swaps.Correct Answer: US Commercial paper rate Multiple Choice Single AnswerQuestion: What is LIBOR?Correct Answer: Rate of interest for inter bank lending of funds for various maturities Multiple Choice Single AnswerQuestion: Mr M has imported some goods from Greece. What is the maximum period within which he must make the payment?Correct Answer: Six months from date of shipment Select The BlankQuestion: The price at which a person may purchase or sell the underlying ________.Correct Answer: Exercise or strike price Multiple Choice Single AnswerQuestion: What is a "Received for shipment" bill of lading?Correct Answer: It is not considered by the banks as a good security for financing. Multiple Choice Single AnswerQuestion: What is the primary concern of the seller in the International Trade?Correct Answer: To be sure to get the payment for goods, in time and in the required currency. Multiple Choice Multiple AnswerQuestion: Which contracts are used for transportation by road?Correct Answer: FCA, CPT Multiple Choice Single AnswerQuestion: What is the objective of INCOTERMS?Correct Answer: Arrange for transfer of risk from seller to buyer at a convenient place Multiple Choice Multiple AnswerQuestion: 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 Multiple Choice Multiple AnswerQuestion: Why does a Transaction exposure arise?Correct Answer: Trading flows, Dividend or capital flows Match The Following Question Correct AnswerIssuing Bank Opening BankStand By Credit Bank guaranteeLetter of credit Documentary creditBill of exchange

Usance

 

Multiple Choice Single AnswerQuestion: 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 Multiple Choice Single AnswerQuestion: What is the meaning of right to buy or sell the future contract?Correct Answer: An Option True/FalseQuestion: Open Insurance policy is for any amount for specific period and specific number of shipments.Correct Answer: False Select The BlankQuestion: QA request for additional ________ funds from a customer in a margin call.Correct Answer: Margin Multiple Choice Single AnswerQuestion: What maxim is followed by the forex dealer when direct method of exchange rate quotation is used?Correct Answer: Buy High, Sell Low Select The BlankQuestion: The right without the obligation to sell a security is ________.Correct Answer: Put Option Multiple Choice Single AnswerQuestion: Why have futures and options come into existence?Correct Answer: To avoid business risk. Multiple Choice Multiple AnswerQuestion: Which document is used for transportation by air, rail, road, marine?Correct Answer: Multimodal transport document, Combined Transport document Match The Following Question Correct

AnswerIBRD World BankCollapse of IMF administered fixed exchange rates

Early 1970s

No International control on Exchange rates Mid 80sEuro as a currency note/coin 2002  Multiple Choice Single AnswerQuestion: Name the method of payment where the seller neither gets the guarantee of payment from the bank, nor the possibility of negotiation of documents:-Correct Answer: Bills for Collection

 Select The BlankQuestion: In Indian interbank market forward rates are generally quoted on the basis of ___.Correct Answer: Calendar month Multiple Choice Single AnswerQuestion: What do you understand by 'bill of lading in a quasi negotiable instrument'?Correct Answer: It is a document of title to goods and its negotiation may not be complete and free from qualification. Multiple Choice Multiple AnswerQuestion: What are the functions of International Finance Corporation?Correct Answer: Help private enterprise by financing projects, Provide technical assistance to private enterprise Multiple Choice Single AnswerQuestion: What are the powers of restricted money changers?Correct Answer: Purchase foreign currencies Multiple Choice Single AnswerQuestion: Which is the largest financial market in the world?Correct Answer: US Financial market True/FalseQuestion: Bid rate is bidders buying rate and offered rate is bidders selling rate.Correct Answer: True Multiple Choice Single AnswerQuestion: In case of shortfall in the participation by lenders, in the pre-decided "syndicated Loan amount, such portion is taken up by:-Correct Answer: The lead Manager Multiple Choice Single AnswerQuestion: What is a coupon swap?Correct Answer: Swap contract exchange of fixed rate payment system for a floating rate system contract exchange of fixed rate payment system for a floating rate system Multiple Choice Single AnswerQuestion: "Currency Snake"Correct Answer: Plus or minus movement of exchange rate around the parity rate Multiple Choice Multiple AnswerQuestion: The various arms of World Bank are:Correct Answer: International Development Agency, Multinational Investment Guarantee Agency Match The Following Question Correct Answer16 principles for good environmental conduct Business Charter of sustainable developmentWorld Chambers Congress World Federation of Chambers

ICC Conference in 2004 Marrakesh13 types of trade contracts INCOTERM  Select The BlankQuestion: Combined Certificate of Origin and Value are required by ________.Correct Answer: Commonwealth Countries Select The BlankQuestion: ________Bill of lading must specify the name of the ship.Correct Answer: "On Board" Match The Following Question Correct Answerforfaiting Discounting export receivablesBuyer's Credit Available to Buyer abroadSeller's Credit Available to seller abroadUsance LC Seller paid only on maturity

date  Multiple Choice Single AnswerQuestion: What do you mean by a derivative?Correct Answer: One which has been derived from other fundamental instruments Multiple Choice Single AnswerQuestion: Samuraibonds areCorrect Answer: Foreign yen bonds issued to non resident entities in Japanese Market Multiple Choice Single AnswerQuestion: Various exchange rate mechanisms are basically used forCorrect Answer: Correcting currency disequilibrium Multiple Choice Single AnswerQuestion: In International trade, Advance payment means:-Correct Answer: Providing up front cash Multiple Choice Single AnswerQuestion: What maxim is followed by the forex dealer when indirect method of exchange rate quotation is used?Correct Answer: Buy Low, sell High Multiple Choice Single AnswerQuestion: Which invoice gives accurate record of the type of merchandise shipped for the purpose of fixing duties in the country of importer?Correct Answer: Consular Invoice Multiple Choice Single AnswerQuestion: Who introduced the worlds first exchange traded currency futures?

Correct Answer: Chicago Mercantile Exchange Multiple Choice Single AnswerQuestion: What is the difference in a future and a forward contract?Correct Answer: Futures are tradeable on public exchange, forwards are not are tradeable on stock exchange Multiple Choice Single AnswerQuestion: In whose name is the straight bill of lading issued?Correct Answer: The Consignee Multiple Choice Single AnswerQuestion: How does ECGC promote export in India?Correct Answer: By covering risk of exporting on credit Multiple Choice Single AnswerQuestion: Documents which satisfy the statutory requirements of any trade and regulatory aurhotiry are known as:-Correct Answer: Regulatory Documents Multiple Choice Single AnswerQuestion: Proforma Invoice, Commercial Invoice, Consaular Invoice are which type of documents?Correct Answer: Commercial Documents True/FalseQuestion: Phytosanitary/ Radiation/Fumigation certificates are in the category of Health CertificatesCorrect Answer: True Multiple Choice Single AnswerQuestion: What do firms face while evaluating risks in cross border investment?Correct Answer: The issues are different, unique to each project, and solutions are varied Multiple Choice Multiple AnswerQuestion: Which functions does the Bill of Lading serve?Correct Answer: It is a document of title to goods, It is receipt of goods True/FalseQuestion: In red clause credit some clauses are printed in Red ink.Correct Answer: True Select The BlankQuestion: EEFC account holder is allowed to have ________ facility.Correct Answer: Cheque book and nomination card, safe custody, safe deposit locker without any fee True/FalseQuestion: An Indian importing goods from USA pays dollars in India.Correct Answer: False 

Multiple Choice Multiple AnswerQuestion: 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 True/FalseQuestion: CFR = FOB plus freight paid by seller + insurance paid by seller.Correct Answer: False Multiple Choice Single AnswerQuestion: Which of them are special funding facilities of IMF?Correct Answer: Buffer Stock Facility Multiple Choice Multiple AnswerQuestion: What are the sources of raising funds for exports?Correct Answer: Suppliers credit, Forfaiting Multiple Choice Single AnswerQuestion: What is the volume of the world's total speculative transactions?Correct Answer: Roughly 90 % of the total turnover Select The BlankQuestion: 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 Multiple Choice Multiple AnswerQuestion: 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 Multiple Choice Multiple AnswerQuestion: Sterling Market is attractive for an international investor becauseCorrect Answer: Gilts offer higher attractive margin, Choice of issuing medium term and long term bonds Multiple Choice Single AnswerQuestion: Under which contracts the seller pays the import duty for the buyer?Correct Answer: DDP Select The BlankQuestion: Position in a currency is said to be ________, when sales equal purchases.Correct Answer: Square Multiple Choice Multiple AnswerQuestion: Why is Bill of Exchange a Quasi Negotiable Instrument?Correct Answer: It represents title to goods, It is issued under Sale of Goods act Multiple Choice Multiple AnswerQuestion: What do you understand by Commercial Risk?Correct Answer: Protracted default by the buyer, Insolvency of the buyer

 Multiple Choice Single AnswerQuestion: 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 Multiple Choice Single AnswerQuestion: In which currency can the EEFC account be opened?Correct Answer: Any Convertible currency Match The Following Question Correct

AnswerNetherlands

Guilder

Germany MarkIreland PuntLuxemberg Franc True/FalseQuestion: A small percentage of futures contracts actually result in delivery of the underlying commodity or security.Correct Answer: True Multiple Choice Single AnswerQuestion: 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 Match The Following  Question Correct AnswerLash bill of lading Acknowledgement by ship owners or agentsThrough Bill of lading For entire voyage by several modesStraight Bill of Lading Issued in the name of the consigneeOn Board bill of lading Name of vessel  Multiple Choice Single AnswerQuestion: When is intermediation resorted to?Correct Answer: When The Lender does not know or trust the creditwothiness of the borrower Multiple Choice Single AnswerQuestion: Which controls are not permitted by IMF?Correct Answer: Current account controls True/False

Question: Cross currency forward contract is not meaningful if original contract is in Rupees to USDCorrect Answer: True Multiple Choice Multiple AnswerQuestion: 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 Multiple Choice Single AnswerQuestion: Which is the most actively traded currency in the international market today?Correct Answer: US Dollar Select The BlankQuestion: 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 Multiple Choice Multiple AnswerQuestion: 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 Multiple Choice Single AnswerQuestion: What is the volume of the world's average daily transactions in foreign exchange?Correct Answer: USD 1 trillion Multiple Choice Single AnswerQuestion: 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 Multiple Choice Single AnswerQuestion: Which currency is traded in one leg of about 70% of the world's transactions?Correct Answer: US Dollar Multiple Choice Single AnswerQuestion: What is Risk Syndication facility?Correct Answer: Sharing of risk of non payment by supplier True/FalseQuestion: If ERD > IRD hen exporter should availa Rupee financeCorrect Answer: True True/FalseQuestion: There is no difference between CIP and CIF contracts except the mode of transportation.Correct Answer: True 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 Multiple Choice Single AnswerQuestion: Examples of hedge are:Correct Answer: Buy when you are having short position True/FalseQuestion: Till August 1994 India was following the Indirect Method of Rate quotation.Correct Answer: False Select The BlankQuestion: A Bill of exchange payable 45 days from date of shipment, is a means of ________ from seller to the buyer.Correct Answer: Credit Multiple Choice Multiple AnswerQuestion: Major s in NIF are:-Correct Answer: Commercial Banks, Non banking Finance companies, Insurance companies Select The BlankQuestion: The 3rate of interest on rupee finance for exports is not exceeding ________ less than PLR.Correct Answer: 0.025

Multiple Choice Single AnswerQuestion: 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 Match The Following Question Correct

AnswerDeparture EXWMain carriage paid CFRMain carriage unpaid FASArrival DES Multiple Choice Multiple AnswerQuestion: 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 Multiple Choice Multiple AnswerQuestion: These are the parties to the documentary credit:-Correct Answer: Negotiating Bank, advising bank, Reimbursing bank, Confirming bank Select The Blank

Question: Under 3the ________ standard the Country's Central Bank promised to buy back the currency at certain rate of Gold.Correct Answer: Gold Multiple Choice Single AnswerQuestion: Method of advance payment is not disadvantageous to:-Correct Answer: The seller Select The BlankQuestion: ________ enables bankers to extend purchase, negotiation or discount of export bills.Correct Answer: Post shipment credit guarantee Multiple Choice Single AnswerQuestion: In case of syndication of loans the amount of loan and currency is finalised by:-Correct Answer: Borrower Multiple Choice Single AnswerQuestion: Which Indian Co. is not eligible to make investment abroad under automatic route?Correct Answer: Co which is caution listed by RBI Multiple Choice Single AnswerQuestion: 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. Multiple Choice Multiple AnswerQuestion: As per BIS, recovery from the recent crisis in global capital market was mainly due toCorrect Answer: Rapid and appropriate policy response in US and other countries, Increase in foreign Direct Investments, free flow of credit Select The BlankQuestion: Fixed interest rate Eurobond without the option to convert to equity is known as ________.Correct Answer: Straight Debt Select The BlankQuestion: Even after liberalization of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countriesCorrect Answer: OECD True/FalseQuestion: Head office of ICC is in Paris because of its First President Eliance Clementel.Correct Answer: True Select The BlankQuestion: A ________ Bill of lading does not specify the terms and conditions of carriage.Correct Answer: Short Form 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. Select The BlankQuestion: Hotels and Airline companies are allowed to receive payments in Indian rupees from foreign tourist without insisiting on ________.Correct Answer: Encashment certificate Multiple Choice Single AnswerQuestion: 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 Multiple Choice Single AnswerQuestion: To whom is an AD required to report the cancellation of forward Contracts?Correct Answer: No one at all. True/FalseQuestion: An exporter expecting payment in$ next month will book a forward Purchase contract.Correct Answer: False Select The BlankQuestion: The credit which does not constitute a legally binding undertaking between the bank and the beneficiary is ________.Correct Answer: Revocable Credit Multiple Choice Single AnswerQuestion: A Run on gold gold by a country meansCorrect Answer: Exchange of reserve currency in to gold True/FalseQuestion: CFR = FOB plus freight paid by seller +insurance paid by seller.Correct Answer: False Multiple Choice Multiple AnswerQuestion: At the request of M/s Universal Traders Calcutta, State Bank of India opened a documentary credit in Favour of M/s Star Trading Co Dubai, for USD 25000/-.Here State Bank of India Calcutta is known asCorrect Answer: Issuing Bank, Opening Bank Multiple Choice Single AnswerQuestion: Which method of payment is getting popular in Europe because of high costs in other methods?Correct Answer: Bills for collection True/FalseQuestion: Dealing room is a place where the actual exchange of currencies takes place phsically at predetermined rates.Correct Answer: False

 Multiple Choice Single AnswerQuestion: 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 Multiple Choice Multiple AnswerQuestion: The maximum period for which a forward contract can be granted by the AD depends upon which RBI directives?Correct Answer: Maximum Period of repatriation of export proceeds, Maximum period of payment for Imports Multiple Choice Single AnswerQuestion: Revolving underwriting facility, short term note issuance facilty, transferabla revolving undertaking facility are the names of:-Correct Answer: Note issuance facility True/FalseQuestion: In a coupon swap the receiver is the one who receives fixed rate of interest.Correct Answer: True Multiple Choice Single AnswerQuestion: A Dealer Buys commodity in Bombay and sells it in Delhi due to price differentials. He is said to be resorting to which practice?Correct Answer: Arbitrage Multiple Choice Multiple AnswerQuestion: Name the services provided by 'Reuter 3000’ in forex market:-Correct Answer: Quotation of forex rates, interest rates, Electronic broking by matching the rates Multiple Choice Single AnswerQuestion: "A bill of exchange is drawn payable after 90 days after sight", then it will be considered as:-Correct Answer: Usance Bill Select The BlankQuestion: Mostly, countries in the Middle east require ________ invoice, for facilitating import duties.Correct Answer: Legalised Select The BlankQuestion: When a credit is made to available to additional beneficiary wholly or partly it is called as ________.Correct Answer: Transferable credit Multiple Choice Single AnswerQuestion: In case of shortfall in the participation by lenders, in the pre-decided “syndicated Loan amount, such portion is taken up by:-Correct Answer: The lead Manager Select The Blank

Question: For opening JV/WOS in Nepal, Bhutan, the ceiling for financial commitment per annum is ________.Correct Answer: Rs. 350 crore True/FalseQuestion: The Euro Commercial paper is supported by a team-syndicated credit with both sides of the transaction combined into one operation.Correct Answer: True Multiple Choice Multiple AnswerQuestion: Mr A an Indian exporter is expecting to receive payment for exports in Hong kong dollar, after one month; How can he cover the exchange rate fluctuation risk?Correct Answer: By booking a A forward contract in HKD itself, By booking a cross currency option between USD and HKD and / or USD and Rs True/FalseQuestion: Multimodal transport document is also known as "IntermobileTransport Document”Correct Answer: True Select The BlankQuestion: The stock of foreign reserves in India, is now around ________ % of the GDP and exceeds money circulation.Correct Answer: 15 True/FalseQuestion: Proposal for Investment abroa by Indian not falling under automatic route are submitted to Exchange Control Department of RBI.Correct Answer: True Select The BlankQuestion: In ________ contract, though seller pays the freight, seller's risk is not extended till destination.Correct Answer: CIF Multiple Choice Single AnswerQuestion: How did the Govt of India put the war time exchange controls in to a statutory frame work?Correct Answer: Enacting FERA 1947 Select The BlankQuestion: The creditworthiness of futures exchange is maintained through imposition of ________.Correct Answer: Margin Multiple Choice Single AnswerQuestion: For cancellation of an already booked forward contract, whose permission is required by the customer?Correct Answer: Nobody other than he himself Multiple Choice Single AnswerQuestion: Which type of finance is available for the full value of the asset, in international trade?

Correct Answer: International Leasing True/FalseQuestion: Bridge Loans are granted for construction of large size bridges, and flyovers.Correct Answer: False True/FalseQuestion: An Indian party which has made direct investment abroad has to submit a annual performance report in form ARP-1 to RBI.Correct Answer: False Select The BlankQuestion: Value of USDollar is ________ in the world market but RBI is trying to match the Rupee value with it.Correct Answer: Depreciating Multiple Choice Multiple AnswerQuestion: As regards the due date of an Option exercise which methods are in vogue?Correct Answer: American option, European Option True/FalseQuestion: Cash flows generated from aforeign project may replace revenueproducing imports to the host countryCorrect Answer: False Multiple Choice Single AnswerQuestion: 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 Multiple Choice Single AnswerQuestion: For a spot transaction carried out on Thursday, currencies will be exchanged on:-Correct Answer: Monday Multiple Choice Single AnswerQuestion: The Direct Investment abroad through share swap arrangement under normal route is permitted in a:-Correct Answer: JV/WOS Multiple Choice Single AnswerQuestion: In case the value date happens to be a holiday then the settlement is done:-Correct Answer: On the next working day Multiple Choice Single AnswerQuestion: In which of the funding facilities the repayment period is between 3 to 5 years?Correct Answer: C.C.F.F. Multiple Choice Single AnswerQuestion: What are the functions of Export Import Bank of India?Correct Answer: Finance functions and development functions 

Multiple Choice Multiple AnswerQuestion: 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 Select The BlankQuestion: ________ is the agency of ICC which deals with the maritime crime.Correct Answer: International Maritime Bureau True/FalseQuestion: Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument.Correct Answer: False Multiple Choice Single AnswerQuestion: What Preshipment facility is granted by EXIM Bank to an exporter?Correct Answer: Preshipment credit beyond six months for construction and turnkey projects abroad Select The BlankQuestion: ________ is the acid test for events to be included in country risk.Correct Answer: Control by Government' True/FalseQuestion: Funding Options in domestic yen market are Futures, FRAs, Call and put options.Correct Answer: True Multiple Choice Single AnswerQuestion: Financial management is complex process forCorrect Answer: Companies which have international trade Select The BlankQuestion: A Credit can be a confirmed credit only if it is also ________.Correct Answer: An Irrevocable credit Multiple Choice Multiple AnswerQuestion: Internationally only those currencies are in demandCorrect Answer: Which are convertible, Which have liquidity confirmed in Euro market operations Multiple Choice Multiple AnswerQuestion: 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 Multiple Choice Multiple AnswerQuestion: What does the word '"Tombstone" stand for?Correct Answer: Advertisement which lists the managers, underwriters, List of Providers of recently floated issue 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 Select The BlankQuestion: Forward margin makes a currency cheaper then the currency is at ________.Correct Answer: Discount Multiple Choice Single AnswerQuestion: 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 Multiple Choice Single AnswerQuestion: The capital market is said to be volatile whenCorrect Answer: Prices of capital market instruments change and are expected to change drastically True/FalseQuestion: JV means Joint venture and WOS means World of Security.Correct Answer: False Multiple Choice Multiple AnswerQuestion: 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 True/FalseQuestion: Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operationsCorrect Answer: True Multiple Choice Single AnswerQuestion: In the syndicated loan arrangement the borrower has to execute:-Correct Answer: Single Principal loan agreement True/FalseQuestion: At Least one principal Lender bank is essential for issue of the ADR or GDR.Correct Answer: False Multiple Choice Single AnswerQuestion: US financial system is the freest system becauseCorrect Answer: Institutions can introduce new products and instuments at the price of their choice. True/FalseQuestion: Till August 1994 India was following the Indirect Methodof Rate quotation.Correct Answer: False Select The BlankQuestion: Any company involved in foreign exchange transactions is exposed to ________ risk.

Correct Answer: Currency True/FalseQuestion: Cause of increase in cost of public issues Underwriting fees, selling commissionCorrect Answer: True True/FalseQuestion: 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 True/FalseQuestion: In developed markets, speculators play important role in determining the trend of currency rates.Correct Answer: True Select The BlankQuestion: Forward Margin makes a currency costlier then the currency is at ________.Correct Answer: Premium Select The BlankQuestion: In mid 1992 ________ rejected the ratification of Maastricht treatyCorrect Answer: Denmark True/FalseQuestion: 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 True/FalseQuestion: Country risk analysis is a futile exercise in the background of cost of analysis.Correct Answer: True True/FalseQuestion: Charter party bills of lading are generally not acceptable to bankers as security because Sea Charters are full of problems.Correct Answer: True Multiple Choice Single AnswerQuestion: 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 Select The BlankQuestion: A Documentary credit issued on the strength of another documentary credit is known as ________.Correct Answer: Back to Back credit True/FalseQuestion: Tranche' is a managed issue of securities in smaller denominations.Correct Answer: True

 Select The BlankQuestion: The major industrial power whose economy was not affected after the II world war was ________.Correct Answer: USA Select The BlankQuestion: Under the ________ standard the Country's Central Bank promised to buy back the currency at certain rate of Gold.Correct Answer: Gold Multiple Choice Multiple AnswerQuestion: Which two countries were included to convert the group of five into the group of seven?Correct Answer: Italy, Canada Multiple Choice Single AnswerQuestion: For setting up a joint venture or WOS abroad, Indian banks operating in India need a clearance:-Correct Answer: Under Banking Regulation Act Select The BlankQuestion: The currency notes and coins of individual countries participating in "Euro" have ceased to be a legal tender from ________.Correct Answer: 2002 Select The BlankQuestion: Partnership firm not eligible for Overseas Direct Investment needs to apply to RBI Approval in form ________.Correct Answer: ODISelect The BlankQuestion: To make the export more competitive and remunerative, the Indian Govt extends ________ facility.Correct Answer: Cash Incentives Select The BlankQuestion: Association of several scheduled commercial banks for forex business is ________.Correct Answer: Foreign Exchange Dealers Association of India True/FalseQuestion: Installment credit is issued for specific quantities of goods to be shipped every week or month.Correct Answer: True Select The BlankQuestion: When interest rate changes by 0.05 per cent then it has changed ________ basis points.Correct Answer: 50 Multiple Choice Multiple AnswerQuestion: 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 Multiple Choice Multiple AnswerQuestion: 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. 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 True/FalseQuestion: With the advent of futures and Options there is no need for additional instruments of risk hedging.Correct Answer: False Select The BlankQuestion: During the fixed rate exchange system prevailing in India, the intervention currency was ________.Correct Answer: Sterling Pound Multiple Choice Single AnswerQuestion: 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 Multiple Choice Multiple AnswerQuestion: 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 True/FalseQuestion: An AD can book a forward contract for a part of the amount of Sale ContractCorrect Answer: True Multiple Choice Multiple AnswerQuestion: A Usance bill of exchange may be drawn in 2 ways. Which are they?Correct Answer: Documents against payment, Documents against acceptance True/FalseQuestion: In an interest rate swap if the payment schedules are identical, only diffrence between the two payments is delivered.Correct Answer: True Multiple Choice Single AnswerQuestion: A weight list, a packing list used in international trade are which type of documents?Correct Answer: Operational Documents True/False

Question: Naked position is when investor does not hedge against market risk.Correct Answer: True Select The BlankQuestion: Indian Co. intending to make investment under Automatic route needs to submit form ________ to RBI with enclosures.Correct Answer: ODA Select The BlankQuestion: As a result of the world wars in the 20th century the ________ of most of the countries suffered heavily.Correct Answer: Economies Select The BlankQuestion: Short term instruments normally issued by corporate borrowers, forhigh values, at a discount to face value are known as ________.Correct Answer: Euro Commercial Papers Select The BlankQuestion: Over the years ________has been the most widely accepted currency in international capital market.Correct Answer: American Dollar Multiple Choice Multiple AnswerQuestion: 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 Multiple Choice Single AnswerQuestion: 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 Select The BlankQuestion: Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countriesCorrect Answer: OECD True/FalseQuestion: The American Dollar market comprises of the domestic segment of USD the offshore segment of USD.Correct Answer: True Select The BlankQuestion: The creditworthiness of the futures seller and the futures buyer is ________ because of the presence of the Futures exchange.Correct Answer: Irrelevant Select The Blank

Question: In Indian interbank market forward rates are generally quoted on the basis of ________.Correct Answer: Calendar month Select The BlankQuestion: Rupee was liberalised on ________ account in 1993, and on current account in 1994.Correct Answer: Trade Multiple Choice Single AnswerQuestion: Under which category of exchange rate did the Indian Rupee came from June 92?Correct Answer: Other managed Floating Multiple Choice Multiple AnswerQuestion: Which of these are considered as miscellaneous documents?Correct Answer: Packing list, Weight certificate Select The BlankQuestion: ECGC provides cover to an Indian contractor for construction work abroad under ________.Correct Answer: Construction works policy Multiple Choice Single AnswerQuestion: Equity can be raised internationallly by a company through:-Correct Answer: Fund raising, underwriting, hedging, arbitration operations Multiple Choice Single AnswerQuestion: 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 True/FalseQuestion: In the forward rate quotations between two currencies, when one currency is at discount the other currency is at premium.Correct Answer: True True/FalseQuestion: Import finance is nomally available at rates of interest cheaper than domestic finance rates.Correct Answer: False True/FalseQuestion: An Indian exporting goods to New York receives dollars in New York.Correct Answer: True Select The BlankQuestion: The type of trade where a country sells orange juice in return for cars is known as ________.Correct Answer: Counter Trade Multiple Choice Multiple AnswerQuestion: 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 Multiple Choice Single AnswerQuestion: A Spot Transaction between Japanese Yen and Sterling carried out on Friday in Singapore, the settlement day will beCorrect Answer: Following Tuesday if it is a working day in all the three centers True/FalseQuestion: Sandby credis are introduced by US Banks because they were not permitted to issue on demand guarantees.Correct Answer: True Select The BlankQuestion: The large flow of money internationally was caused primarily by the oil price hikes engineered by ________.Correct Answer: OPEC countries pean Countries Select The BlankQuestion: An exchange rate for $ was48.2050, it is now 48.2075, then one says that it has moved ________ basis pointsCorrect Answer: 25 Multiple Choice Multiple AnswerQuestion: 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 Multiple Choice Multiple AnswerQuestion: 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 True/FalseQuestion: Transfer of funds for investment abroad is allowed freely.Correct Answer: True True/FalseQuestion: PP Form is required when exports are made to any country by post parcel on value payable basis.Correct Answer: False True/FalseQuestion: The working of the IBRD and IMF in recent has blurred the difference between the twoCorrect Answer: True Multiple Choice Single AnswerQuestion: In the context of International economy, the period between 1920s and 1930s is known as

Correct Answer: Great Depression Multiple Choice Single AnswerQuestion: 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. True/FalseQuestion: FRN's issued with ceiling on interest beyond which the issues is not required to pay interest is known as Mini-Max FRNCorrect Answer: True True/FalseQuestion: In an already booked forward contract, a person may seek early delivery, extension in period, or cancellation.Correct Answer: True Select The BlankQuestion: FRNs are issued for a maturity period of ________ and are normally redeemed in one shot.Correct Answer: 5-7 years True/FalseQuestion: Corporates are allowed to raise funds abroad up to $ 15 million as short term finance if they have EPCG license.Correct Answer: True Multiple Choice Multiple AnswerQuestion: For issuing a Documentary credit The applicant is required to provide to the issuing bank details aboutCorrect 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 Multiple Choice Single AnswerQuestion: Bank with lowest Bid for fees etc and which undertakes the responsibility of loan syndication is called:-Correct Answer: The lead bank- leadmanager- arranger Select The BlankQuestion: After the second world war many countries adopted the route of ________ to give facelift to sagging economies.Correct Answer: Devaluation of their currencies True/FalseQuestion: FEDAI does not require RBI permission to frame and revise rules of businessCorrect Answer: False Multiple Choice Single AnswerQuestion: What is the Indian Govt's obligation of becoming member of IMF?Correct Answer: Ensure orderly exchange arrangement, promote stable exchange rate 

Multiple Choice Multiple AnswerQuestion: 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 Select The BlankQuestion: 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 Multiple Choice Single AnswerQuestion: How does ICC access Govt and influence Governmental decisions?Correct Answer: Through national committees True/FalseQuestion: 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 Select The BlankQuestion: Exim acts as ________ for Government, RBI and IDBI.Correct Answer: An agent Select The BlankQuestion: In ________ transaction the delivery is postponed from the agreed date.Correct Answer: Rollover Multiple Choice Multiple AnswerQuestion: 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 Multiple Choice Single AnswerQuestion: The 'On Board' bill of lading means bill of lading evidencing that:-Correct Answer: The goods are put on board a ship for shipment Multiple Choice Multiple AnswerQuestion: 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 Select The BlankQuestion: ________ is the price at which the market maker is prepared to borrow the money.Correct Answer: Bid rate Multiple Choice Multiple AnswerQuestion: 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 

Multiple Choice Single AnswerQuestion: 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 Multiple Choice Single AnswerQuestion: What was the official foreign currency reserve of the group of seven central Banks taken togeather in mid 1992?Correct Answer: USD 275 Billion Select The BlankQuestion: The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________.Correct Answer: Brussels Select The BlankQuestion: 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 Select The BlankQuestion: The rate of interest on rupee finance for exports is not exceeding ________ less than PLR.Correct Answer: 0.025 Multiple Choice Single AnswerQuestion: Large number of exporters from which country are enjoying the privilege of receiving up front cash from importers in Russia?Correct Answer: United Kingdom True/FalseQuestion: The Prominent non banking financial institutions participating in the FOREX markets are Pension funds, mutual funds, insurance Cos.Correct Answer: True True/FalseQuestion: The volume of trading of Derivatives in the world trade market is growing but still only 5% of the total.Correct Answer: False Multiple Choice Single AnswerQuestion: 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 True/FalseQuestion: Out of 15 member countries in European Union 12 countries commiteed themselves for a single currency.Correct Answer: False Multiple Choice Single Answer

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