Ise1 406-A Ram

3/8/22, 12:04 PM 406 A International Financial Management
406 A International Financial Management

SSBT's College of Engineering & Technology, Bambhori Jalgaon.
Internal Sessional Examination – I (2021– 2022, Term II)
Date: 09/03/2022
Time: 02:30 pm to 04:30 pm
Instructions to the candidate:
1. There is no negative marking and each question carries 1 mark.
2. All questions are compulsory.
3. Maximum marks are 60 and Minimum passing are 24.
4. Total obtained marks (Out of 60) will be scaled down to 10 by dividing 6.
* Required
1. Email *
Basic Information
2. Full Name (in BLOCK Letters, starting with Surname) *
3. Branch
Mark only one oval.
MBA
BBA
4. Class
Mark only one oval.
FY
SY
https://docs.google.com/forms/d/1s0yzf7TqH7-79Yupx65pPakKY-f12kyIJ_SniaBgo_A/edit 1/22
5. Roll No.
Q. 1
6. The main objective of international financial Management is to arrange 1 point
sufficient funds for meeting the _____________ goals of an organization.
Mark only one oval.
short term
long term
medium term
all of the above
Q. 2
7. _____________ equity markets are an important platform for global finance 1 point
Mark only one oval.
Foreign
Forex
Euro
International
Q. 3
8. Which of the following is a legitimate reason for international investment? 1 point
Mark only one oval.
Dividends from a foreign subsidiary are tax exempt in the United States.
Most governments do not tax foreign corporations.
There are possible benefits from international diversification.
International investments have less political risk than domestic investments.
Q. 4
9. The current system of international finance is a 1 point
Mark only one oval.
gold standard
fixed exchange rate system
floating exchange rate system
managed float exchange rate system
Q. 5
10. International business leads to production on a large scale because of 1 point
____________
Mark only one oval.
Extensive demand
Extensive supply
External demand
External supply
Q. 6
11. International finance is the branch of financial ________broadly concerned 1 point
with monetary and macroeconomic interrelations between two or more

countries.
Mark only one oval.
Philosophy
Psychology
Economics
Politics
Q. 7
12. International finance is concerned with__________ 1 point
Mark only one oval.
exchange rates of currencies
monetary systems of the world
foreign direct investment
all of the above
Q. 8
13. What is the full form of IMF? 1 point
Mark only one oval.
International Mutual Fund
International Money Fund
International Member Fund
International Monetary Fund
Q. 9
14. Which of the following is not normally a responsibility of the treasurer of 1 point
the modern corporation but rather the controller?
Mark only one oval.
Budgets and forecasts.
Asset management.
Investment management.
Financial management.
Q. 10
15. Which of the following does not form part of current account under 1 point
balance of payments?
Mark only one oval.
Export and import of goods
Export and import of services
Income receipts and payments
Capital receipts and payments
Q. 11
16. Which is the function of Treasurer? 1 point
Mark only one oval.
Management of Pension
Management of Credit
Both (A) and (B)
None of the above
Q. 12
17. The only feasible purpose of financial management is 1 point
Mark only one oval.
Wealth Maximization
Sales Maximization
Profit Maximization
Assets maximization
Q. 13
18. International finance mainly discusses the issues related with monetary 1 point
interactions of at least__________.
Mark only one oval.
one country
two or more countries
five countries
None of the above
Q. 14
19. Interest rate swaps are usually possible because international financial 1 point
markets in different countries are
Mark only one oval.
Efficient
Perfect
Imperfect
Both a & b
Q. 15
20. ____________ to promote domestic investment and growth through capital 1 point
Market.
Mark only one oval.
International Finance
World Bank
WTO
IFC
Q. 16
21. The basic function of foreign exchange market is to facilitate the 1 point
__________ of one currency into another
Mark only one oval.
Conversion
Conservation
Concentration
Consolation
Q. 17
22. A simultaneous purchase and sale of foreign exchange for two different 1 point
dates is called_____
Mark only one oval.
Currency devalue
Currency swap
Currency valuation
Currency exchange
Q. 18
23. Given a home country and a foreign country, purchasing power parity 1 point
suggests that:
Mark only one oval.
The home currency will appreciate if the current home inflation rate exceeds the
current foreign inflation rate;
The home currency will depreciate if the current home interest rate exceeds the
current foreign interest rate;
The home currency will depreciate if the current home inflation rate exceeds the
current foreign inflation rate.
The home currency will depreciate if the current home inflation rate exceeds the
current foreign interest rate;
Q. 19
24. Which of the following is false ________ 1 point
Mark only one oval.
Futures contracts trade on a financial exchange
Futures contracts are more liquid than forward contracts
Futures contracts are marked to market
Futures contracts allow fewer delivery options than forward contracts
Q. 20
25. More instability in currency is called as 1 point
Mark only one oval.
country risk
financial risk
currency risk
liquidity risk
Q. 21
26. ____________ transfer is the quickest method of transferring the 1 point
purchasing power
Mark only one oval.
Telegraphic
Courier
Email
Mobile
Q. 22
27. A forward currency transaction: 1 point
Mark only one oval.
Is always at a premium over the spot rate
Means that delivery and payment must be made within one business day
(USA/Canada) or two business days after the transaction date
Calls for exchange in the future of currencies at an agreed rate of exchange
Sets the future date when delivery of a currency must be made at an unknown spot
exchange rate
Q. 23
28. CHIPS stand for 1 point
Mark only one oval.
Clearing House Interbank Payments System
Clearing Home Interbank Payments System
Clearing House Intrabank Payments System
Clearing House Inter Payments System
Q. 24
29. Foreign Exchange Market is a 1 point
Mark only one oval.
System
Place
Both (A) & (B)
None of above
Q. 25
30. If portable disk players made in India are imported into the United States, 1 point
the Indian manufacturer is paid with____
Mark only one oval.
International Monetary Credits
Dollars
Rupees
Euros, or any other third currency
Q. 26
31. ___________ attempt to profit from rising and falling prices 1 point
Mark only one oval.
Arbitrageur
Hedger
Speculators
Manufacturer
Q. 27
32. The date of settlement for a foreign exchange transaction is referred to 1 point
as:
Mark only one oval.
Clearing date
Swap date
Maturity date
Value date
Q. 28
33. A worldwide financial messaging network which exchanges messages 1 point
between banks and financial institutions is known as _____.
Mark only one oval.
SWIFT
CHIP
CHAP
SFMS
Q. 29
34. In Loro Account, Loro means ______ 1 point
Mark only one oval.
our
theirs
yours
my
Q. 30
35. Spot rate is also called as ________________ 1 point
Mark only one oval.
Future Price
Forward Price
Swap Price
Current Market Price
Q. 31
36. Which of the following payment system location does not match 1 point
Mark only one oval.
Clearing House Inter-bank Payment System (CHIPS) – US
Clearing House Automated Payment System (CHAPS) – Russia
Clearing House Automated Transfer System (CHATS) – Hongkong
INFINET – India
Q. 32
37. In the foreign exchange market, the ________ of one country is traded for 1 point
the ________ of another country.
Mark only one oval.
currency; currency
currency; financial instruments
currency; goods
goods; goods
Q. 33
38. The International Fisher equation states that... 1 point
Mark only one oval.
...domestic inflation rates will tend to equal foreign inflation rates.
...domestic real interest rates will tend to equal foreign real interest rates.
...the expected exchange rate depreciation of the domestic currency is equal to the
future inflation differential (foreign minus domestic inflation).
...the difference between the bids-ask spread for an exchange rate is equal to the
future inflation differential (foreign minus domestic inflation).
Q. 34
39. SWIFT stands for ____________ 1 point
Mark only one oval.
System of World Interbank Financial Transportation
Society wide interest & financial telecommunications
Society for worldwide interbank Financial transportation
Society for Worldwide Interbank Financial Telecommunications.
Q. 35
40. Differences in nominal interest rates are removed in exchange rate is 1 point
Mark only one oval.
Fisher Effect
Leontief Paradox.
Combined Equilibrium Theory.
Purchasing Power Parity
Q. 36
41. Interest Rate Parity (IRP) implies that: 1 point
Mark only one oval.
Interest rates should change by an equal amount but in the opposite direction to
the difference in inflation rates between two countries
The difference in interest rates in different currencies for securities of similar risk
and maturity should be consistent with the forward rate discount or premium for the
foreign currency
The interest rates between two countries start in equilibrium, any change in the
differential rate of inflation between the two countries tends to be offset over the
longterm by an equal but opposite change in the spot exchange rate
In the long run real interest rate between two countries will be equal
Q. 37
42. Who determines foreign exchange rates in India? 1 point
Mark only one oval.
RBI
FEDAI
Market forces of demand and supply
Finance ministry of India
Q. 38
43. A floating exchange rate 1 point
Mark only one oval.
is determined by the national governments involved
remains extremely stable over long periods of time
is determined by the actions of central banks
is allowed to vary according to market forces
Q. 39
44. Exchange rate entail delivery of trade currency within two business days 1 point
known as ___________ *
Mark only one oval.
Forward rate
Future rate
Spot rate
Bid rate
Q. 40
45. The statutory basis for administration of foreign exchange in India is? 1 point
Mark only one oval.
Foreign Exchange Regulation Act, 1973
Foreign Exchange Management Act , 1999
Exchange control Manual
Conservation of Foreign Exchange & prevention of Smuggling Act.
Q. 41
46. A firm that buys foreign exchange in order to take advantage of higher 1 point
foreign interest rates is _______
Mark only one oval.
Speculating
Demonstrating purchasing power parity
Engaging in interest rate arbitrage
Responding to fluctuations in the business cycle
Q. 42
47. An account which is held within a domestic country by a foreign bank, in 1 point
the currency of domestic country _________________
Mark only one oval.
Loro
Nostro
Vostro
SWIFT
Q. 43
48. India is facing continuous deficit in its balance of payments. In the foreign 1 point
exchange market rupee is expected to
Mark only one oval.
Depreciate
Appreciate
Show no specific tendency
Depreciate against currencies of the countries with positive balance of payment

and appreciate
Q. 44
49. Which of the following refers to an account that a bank holds in a foreign 1 point
currency in another bank?
Mark only one oval.
Nostro Account
Loro Account
Vostro Account
None
Q. 45
50. Which of the following institutions is the most important participant in 1 point
foreign currency market?
Mark only one oval.
A retail customer
A commercial bank
A foreign exchange broker
A central bank
Q. 46
51. Exchange rates 1 point
Mark only one oval.
are always fixed
fluctuate to equate the quantity of foreign exchange demanded with the quantity
supplied
fluctuate to equate imports and exports
fluctuate to equate rates of interest in various countries
Q. 47
52. Currently the largest foreign exchange market in the world is 1 point
____________-.
Mark only one oval.
New York
Tokyo
Frankfurt
London
Q. 48
53. An arbitrageur in foreign exchange is a person who____ 1 point
Mark only one oval.
Earns illegal profit by manipulating foreign exchange
Causes differences in exchange rates in different geographic markets
Simultaneously buys large amounts of a currency in one market and sell it in

anothermarket
None of the above
Q. 49
54. Type of risk in which value of liabilities and assets is affected by exchange 1 point
rate is classified as
Mark only one oval.
economic rates
foreign exchange risk
selling rate
buying rates
Q. 50
55. Which of the following is true of foreign exchange markets? 1 point
Mark only one oval.
The futures market is mainly used by hedgers while the forward market is mainly
used for speculating.
The futures market and the forward market are mainly used for hedging.
The futures market is mainly used by speculators while the forward market is
mainly used for hedging.
The futures market and the forward market are mainly used for speculating
Q. 51
56. Which of the following may be participants in the foreign exchange 1 point
markets?
Mark only one oval.
Bank and Nonbank foreign exchange dealers
Central banks & Treasuries
Speculators & Arbitragers
All of the above
Q. 52
57. If purchasing power parity were to hold even in the short run, then: 1 point
Mark only one oval.
real exchange rates should tend to decrease over time;
quoted nominal exchange rates should be stable over time.
real exchange rates should tend to increase over time;
real exchange rates should be stable over time;
Q. 53
58. Under fixed exchange rate system , the currency rate in the market is 1 point
maintained through
Mark only one oval.
Rationing of foreign exchange
Official intervention
Centralizing all foreign exchange operations
None of the above
Q. 54
59. Which of the methods below may be viewed as most effective in 1 point
protecting against economic exposure?
Mark only one oval.
Futures market hedging
Forward contract hedges
Geographical diversification
Money market hedges
Q. 55
60. Maintaining a foreign currency account is helpful to 1 point
Mark only one oval.
Avoid transaction cost.
Avoid exchange risk.
Avoid both transaction cost and exchange risk.
Avoid exchange risk and domestic currency depreciation
Q. 56
61. _________ contracts are bilateral contracts. 1 point
Mark only one oval.
Forward
Futures
Options
Swaps
Q. 57
62. Foreign exchange market is also referred to as ___________ market 1 point
Mark only one oval.
Fourange
Barter
Forex
Exforeign
Q. 58
63. The responsibility for administration of FEMA is vested with ________ 1 point
Mark only one oval.
Central government
State government
RBI
National banks
Q. 59
64. Which of the following is not a type of foreign exchange exposure? 1 point
Mark only one oval.
Tax exposure
Translation exposure
Transaction exposure
Economic exposure
Q. 60
65. Which of the following is not an interest rate derivative used for interest 1 point
rate management?
Mark only one oval.
Swap
Cap
Floor
All of the above are interest rate derivatives
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3/8/22, 12:04 PM 406 A International Financial Management

406 A International Financial Management

Time: 02:30 pm to 04:30 pm

Instructions to the candidate:

1. There is no negative marking and each question carries 1 mark.

2. All questions are compulsory.

3. Maximum marks are 60 and Minimum passing are 24.

4. Total obtained marks (Out of 60) will be scaled down to 10 by dividing 6.

2. Full Name (in BLOCK Letters, starting with Surname) *

Mark only one oval.

Mark only one oval.

6. The main objective of international financial Management is to arrange 1 point

sufficient funds for meeting the _____________ goals of an organization.

Mark only one oval.

all of the above

Mark only one oval.

8. Which of the following is a legitimate reason for international investment? 1 point

Mark only one oval.

Most governments do not tax foreign corporations.

There are possible benefits from international diversification.

International investments have less political risk than domestic investments.

9. The current system of international finance is a 1 point

Mark only one oval.

fixed exchange rate system

floating exchange rate system

managed float exchange rate system

10. International business leads to production on a large scale because of 1 point

Mark only one oval.

11. International finance is the branch of financial ________broadly concerned 1 point

with monetary and macroeconomic interrelations between two or more

Mark only one oval.

12. International finance is concerned with__________ 1 point

Mark only one oval.

exchange rates of currencies

monetary systems of the world

foreign direct investment

all of the above

13. What is the full form of IMF? 1 point

Mark only one oval.

International Mutual Fund

International Money Fund

International Member Fund

International Monetary Fund

Mark only one oval.

Budgets and forecasts.

Mark only one oval.

Export and import of goods

Export and import of services

Income receipts and payments

Capital receipts and payments

16. Which is the function of Treasurer? 1 point

Mark only one oval.

Both (A) and (B)

None of the above

17. The only feasible purpose of financial management is 1 point

Mark only one oval.

Mark only one oval.

two or more countries

None of the above

markets in different countries are

Mark only one oval.

Mark only one oval.

__________ of one currency into another