Quiznetik
Foreign Exchange Management | Set 2
1. . A country has a negative balance of trade. It means the balance of payments on current account
A. Should also be negative
B. Should be positive
C. May be positive or negative
D. Should be same as balance of trade
Correct : C. May be positive or negative
2. The Foreign Trade policy was first introduced in the year:
A. 1981.
B. 1947.
C. 1992.
D. 2000.
Correct : C. 1992.
3. The present share of India’s trade in the world trade is
A. less than 1 per cent.
B. 1.2 per cent.
C. 1.5 per cent.
D. 1.8 per cent.
Correct : C. 1.5 per cent.
4. The apex body of the Foreign Trade is:
A. The Central Government.
B. The State Government.
C. The Ministry of Commerce.
D. All the above.
Correct : C. The Ministry of Commerce.
5. The tenure of the Foreign Trade policy is
A. 3 years.
B. 5 years.
C. 1 year.
D. 7 years.
Correct : B. 5 years.
6. The geographically distributed area or zone where the economic laws are more liberal as compared to other parts of the country is called
A. EOU
B. SEZ.
C. AEZ.
D. FTZ.
Correct : B. SEZ.
7. Islamic nations follow
A. Common law
B. Civil law.
C. Criminal Law.
D. Religious law.
Correct : D. Religious law.
8. What does CCIE stand for?
A. Chief Controller of Imports and Exports.
B. Central Cottage Industries Exports.
C. Control on Cotton Imports and Exports.
D. Commissioner of Central Imports and Exports.
Correct : A. Chief Controller of Imports and Exports.
9. The total value of the products and services marketed by a nation is called:
A. Gross Domestic Product.
B. Gross National Product.
C. National Income
D. Per capita income.
Correct : D. Per capita income.
10. To what extent is FDI permitted in the FTWZ?
A. 50%
B. 60%
C. 75%
D. 100%
Correct : A. 50%
11. The WTO Agreement related to investment measures is:
A. TRIPS.
B. TRIMS.
C. GATS.
D. TCA.
Correct : D. TCA.
12. The major players in the foreign exchange market are
A. commercial banks.
B. corporate.
C. exchange brokers.
D. central bank of the country and the Central Government
Correct : C. exchange brokers.
13. Derivatives can be used by an exporter for managing
A. currency risk.
B. cargo risk.
C. credit risk.
D. business risk.
Correct : C. credit risk.
14. The forward market is especially well-suited to offer hedging protection against
A. translation risk exposure.
B. transactions risk exposure.
C. political risk exposure.
D. taxation
Correct : C. political risk exposure.
15. The euro is the name for
A. a currency deposited outside its country of origin.
B. a bond sold internationally outside of the country in whose currency
C. the bond is denominated
D. a common European currency.
Correct : B. a bond sold internationally outside of the country in whose currency
16. Which of the following are international financial considerations faced by both small and large MNEs?
A. Currency systems
B. Tax systems
C. Interest rates
D. Exchange rate
Correct : C. Interest rates
17. Strategies in which funds are moved from one MNE operation to another are called
A. funds positioning techniques
B. arm's length techniques.
C. fronting techniques.
D. subsidiary flows.
Correct : A. funds positioning techniques
18. Markets in which funds are transferred from those who have excess funds available to those who have a shortage of available funds are called
A. commodity markets.
B. fund-available markets.
C. derivative exchange markets.
D. financial markets.
Correct : B. fund-available markets.
19. The bond markets are important because
A. they are easily the most widely followed financial markets in the United States.
B. they are the markets where foreign exchange rates are determined.
C. they are the markets where interest rates are determin
Correct : B. they are the markets where foreign exchange rates are determined.
20. Most FDI and trade are made by:
A. China, Japan and the US.
B. The US, the EU, and Japan
C. North America
D. ASEAN countries
Correct : D. ASEAN countries
21. The EU is the major provider of FDI for:
A. Eastern Europe.
B. South America.
C. developing Asian countries
D. all of these regions.
Correct : C. developing Asian countries
22. Markets in which funds are transferred from those who have excess funds available to those who have a shortage of available funds are called
A. commodity markets.
B. fund-available markets.
C. derivative exchange markets.
D. financial markets.
Correct : A. commodity markets.
23. Increasing interest rates
A. discourage corporate investments.
B. . discourage individuals from saving.
C. encourage corporate expansion.
D. encourage corporate borrowing.
Correct : D. encourage corporate borrowing.
24. Which of the following is not considered a unilateral transfer?
A. foreign aid from one government to another
B. income earned from foreign investments
C. personal gifts to friends in foreign countries
D. donations to foreign countries from non-government
Correct : A. foreign aid from one government to another
25. An increase in the current account deficit will place _______ pressure on the home currency value, other things equal
A. upward.
B. downward
C. no
D. upward or downward
Correct : D. upward or downward
26. Which of the following would likely have the least direct influence on a country's current account?
A. Inflation.
B. National income.
C. Exchange rates
D. A tax on income earned from foreign stocks
Correct : A. Inflation.
27. The primary component of the current account is the:
A. balance of trade.
B. balance of money market flows
C. balance of capital market flows
D. unilateral transfers.
Correct : B. balance of money market flows