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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 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

1
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

2
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.

3
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?

4
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

5
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

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

6
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 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 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?

7
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

8
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 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

9
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

10
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

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

True/False
Question Out of 15 member countries in European Union 12 countries commiteed themselves
for a single currency.
Correct Answer False
Your Answer False

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 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

11
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 Risk of events in a particular country which may cause loss to a person dealing with
that country
Your Answer 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 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

12
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 The American Dollar market comprises of the domestic segment of USD the offshore
segment of USD.
Correct Answer 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 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

13
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

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 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

14
Select The Blank
Question To make the export more competitive and remunerative, the Indian Govt extends
________ facility.
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 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 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 ,
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.
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

15
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 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

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 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

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 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

16
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

17
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 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.

18
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

19
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

20
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?

21
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 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


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

22
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 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

23
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 ________.

24
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

25
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

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

26
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

27
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 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

28
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.

29
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

30
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

31
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 ________.

32
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 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 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 :-

33
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 :-

34
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

35
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

36
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

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

True/False
Question Out of 15 member countries in European Union 12 countries commiteed themselves
for a single currency.
Correct Answer False
Your Answer False

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 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

37
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 Risk of events in a particular country which may cause loss to a person dealing with
that country
Your Answer 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 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

38
Question The American Dollar market comprises of the domestic segment of USD the offshore
segment of USD.
Correct Answer 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 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

39
Question ECGC provides cover to an Indian contractor for construction work abroad under
________.
Correct Answer 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 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.
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 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

40
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 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 ,
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.
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 ________.

41
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

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 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

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 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 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

42
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 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

43
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

44
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

45
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

46
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 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

47
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


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

48
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 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.
Correct Answer Short Form
Your Answer Short Form

49
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 ,

50
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

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-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

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

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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 currency other than that of the country of issue Eurobonds Eurobonds

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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.

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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

55
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 ________.

56
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

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