Cross Border Banking

Section . MCQS. 30 MRKRS.

NSWER LLL UETIONS

1. International banking facilitates

A. Cross boarder trade and services
B. Cross border investments
C. Cross border lending and borrowing
D. Cross border buying
2. Name the banking service that caters to the cross border transactions
A. Wholesale banking
B. International banking
C. Retail banking
D. Investment banking
3. What is called arbitrage?
A. Referring to third party for selling and unsettled dispute
B. Difference between the spot rate and forward rate
C. Making profit due to disparities in price in different markets
D. Quoting rate for both buying and selling
4. Devaluation and revaluation of foreign currencies is done………
A. By market forces
B. Intentionally by the government
C. By financial institutions
D. All of these
5. Fixed exchange rate is fixed by the government in terms of ……
A. Currency
B. Gold reserves
C. Fixed assets
D. All of these
6. Dirty floating is also called
A. Managed floating
B. Hybrid exchange rate
C. Flexible exchange rate
D. None of these
7. The value of dollar increased from 600 to 650 FCF. This is is situation of
A. Deprecation
B. Appreciation
C. Revolution
D. Devolution
8. What is commercial bank principal business.
A. Keeping track of all deposits and current accounts
B. Issuance and payments of checks
C. Collects checks from customers
 D. Each and every one of them
9. Which one is used for international money transfer
A. RTGS
B. SYGM
C. SWIFT
D. WESTERN UNION
10. Spread=ÀSK…………….
A. Forward rate
B. Spot rate
C. Bid
D. Futures
11. Foreign exchange ……….is the price of foreign currency
A. Rate
B. Market
C. Management
D. Finance
12. This is one advantage of forward contract
A. Set up delivery dates to match your cashflows
B. Secure contact in and freely convertible currency
C. Have no ability to participate in favourable rate movements
D. All of the above
13. The most common why that professionals dealers and brokers state foreign exchange
quotations and the way they paper on all trading screens worldwide is called
A. American
B. European
C. Indian
D. Singaporean
14. What are cross border transactions
A. Movement cross border of countries of goods, money, investments
B. Globalisation
C. International trade
D. None of the options re correct
15. What is the full meaning SWIFT
A. Society for worldwide interbank telecommunications
B. Society for worldwide inter global bank telecommunications
C. Society for worldwide inter branch bank telecommunications
D. Society for worldwide inter cross border bank telecommunication.

Section B. Answer all the questions ( 40 marks)

1. What do you understand by cross boarder banking and outline 4 functions of

cross boarder banking ( 5 marks)
2. You are a Bank Manager of Shalom Bank and being asked by the Board of
directors on proposals on how the bank can go international. State and
explain 5 ways in which the bank can go international. ( 10 marks)
3. State 5 risk that are involved in international banking (5 marks)
4. Differentiate between a fixed and a floating exchange rate regime ( 5 marks)
 5. Distinguish between a spot and a forward exchange rate ( 5 marks)
6. Who are the main players in the foreign exchange markets ( 5 marks)
7. Define the following ( 5 marks)
A. Devaluation and revaluation
B. Appreciation And depreciation
C. Arbitration
D. Foreign currency
E. Consortium banking