Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer

True Question JV means Joint venture and WOS means World of Security. Correct 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 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 Multiple Choice Single Answer Question In the syndicated loan arrangement the borrower has to execute :Correct Answer Single Principal loan agreement Question At Least one principal Lender bank is essential for issue of the ADR or GDR. Correct Answer False 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. Multiple Choice Single Answer Question In a coupon swap who is called the buyer? Correct Answer One who pays the fixed rate of interest True/False Question Till August 1994 India was following the Indirect Method of Rate quotation. Correct 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 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 Multiple Choice Single Answer Question What are the powers of money changers? Correct Answer Purchase and sell foreign currency notes and travellers cheques Select The Blank Question Any company involved in foreign exchange transactions is exposed to ________ risk. Correct 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 Multiple Choice Multiple Answer Question What are the activities of ICC? Correct Answer Arbitration and dispute resolving , Canvass for open trade combat commercial crime True/False Question Cause of increase in cost of public issues Underwriting fees , selling commission Correct Answer True Select The Blank Question The currency swaps used ________. Correct 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 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 Match The Following Question Correct Answer Departure EXW Main carriage paid CFR Main carriage unpaid FAS Arrival 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 True/False Question In red clause credit some clauses are printed in Red ink. Correct Answer True 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 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 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

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 Multiple Choice Multiple Answer Question Who can issue the Certificate of Inspection? Correct Answer Export Inspection Council , Person authorized 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 True/False Question In developed markets, speculators play important role in determining the trend of currency rates. Correct 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 Select The Blank Question In Overseas market the forward rate is generally quoted on the basis of ________. Correct Answer Fixed date Select The Blank Question Forward Margin makes a currency costlier then the currency is at ________. Correct Answer Premium Multiple Choice Multiple Answer Question These are the parties to the documentary credit :Correct 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 Soft loans 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 Select The Blank Question In mid 1992 ________ rejected the ratification of Maastricht treaty Correct Answer Denmark 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 Multiple Choice Single Answer Question To whom is an AD required to report the cancellation of forward contracts? Correct Answer No one at all. Select The Blank Question ECGC provides cover to an Indian contractor for construction work abroad under ________. Correct Answer Construction works policy 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 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

Multiple Choice Multiple Answer Question What are the sources of raising funds for exports? Correct Answer Suppliers credit , Forfaiting Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount Multiple Choice Single Answer Question Name the common forex derivatives :Correct Answer Options, futures True/False Question Country risk analysis is a futile exercise in the background of cost of analysis. Correct 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 Match The Following Question Correct Answer Issues linked with LIBOR,LIBID,LIMEAN FRNs Issue of bonds without fixed rate of interest, linked to short term interest rate in the global market Floating Rate Note Issue of loans internationally,through arranger, underwriter,co manager, for a large amount for sharing risk of lending Syndicated Loans Equity issues in the foreign markets either as direct investments or portfolio investments. American or Global Depository Receipts

Multiple Choice 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

Select The Blank Question ________ is the agency of ICC which deals with the maritime crime. Correct Answer International Maritime Bureau Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct 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 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 Multiple Choice Single Answer Question Which is the most actively traded currency in the international market today? Correct Answer US Dollar

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

Multiple Choice Single Answer Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct 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

Match The Following Question Correct Answer Maturity of future Time when actual commodity is delivered Note issuance facility Euronotes Bearer security issued in currency other than that of the country of issue Eurobonds Margin on future Peformance bond or security deposit

True/False Question Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct 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

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 Multiple Choice Single Answer Question What is the volume of the world's average daily transactions in foreign exchange? Correct 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 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

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

Select The Blank Question Over the years ________has been the most widely accepted currency in international capital market. Correct 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

Multiple Choice Single Answer Question Which currency is traded in one leg of about 70% of the world's transactions? Correct Answer US Dollar

Select The Blank Question ________ is the acid test for events to be included in country risk.

Correct Answer Control by Government' Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer Sharing of risk of non payment by supplier True/False Question If ERD > IRD hen exporter should avail a Rupee finance Correct 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 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

True/False Question Funding Options in domestic yen market are Futures, FRAs, Call and put options. Correct Answer True

True/False Question There is no difference between CIP and CIF contracts except the mode of

transportation. Correct Answer True Multiple Choice Single Answer Question Financial management is complex process for Correct 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

Select The Blank Question A Credit can be a confirmed credit only if it is also ________. Correct 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

Multiple Choice Multiple Answer Question Export finance Correct Answer Preshipment credit , Post shipment credit , Duty Draw back 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 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 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 Select The Blank Question Short term instruments normally issued by corporate borrowers, for high values, at a discount to face value are known as ________. Correct 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 Multiple Choice Single Answer Question Examples of hedge are: Correct 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

Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct 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 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 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

Multiple Choice Multiple Answer Question What are the categories of exposures, a person faces in International trade? Correct Answer Transaction exposure , Translation exposure

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

Select The Blank Question The option which can be exercised on the maturity date and not before it is known as________. Correct Answer European Option

Multiple Choice Single Answer Question What are the powers of restricted money changers? Correct Answer Purchase foreign currencies Multiple Choice Multiple Answer

Question Which contracts are used for transportation by road? Correct Answer FCA , CPT Multiple Choice Multiple Answer Question The World Bank Group Consists of Correct Answer International Development Association , International finance Corporation , Multinational Investment Guarantee Agency True/False Naked position is when investor does not hedge against market risk. Correct Answer True Multiple Choice Multiple Answer In DAF, the frontier means :Correct Answer Frontier of exporter's country , Frontier of importer's country Multiple Choice Single Answer Which type of Convertibility of Rupee launched in March 1992 ? Correct Answer Limited convertibility Multiple Choice Single Answer What was the reason for launching swap as an risk hedging instrument? Correct Answer To avoid the effects of currency control imposed in UK Multiple Choice Single Answer Equity can be raised internationallly by a company through :Correct Answer Fund raising, underwriting, hedging , arbitration operations True/False In forward sales, the delivery refers to actual cash flows on due date. Correct Answer True Select The Blank Any company involved in foreign exchange transactions is exposed to ________ risk. Correct Answer Currency True/False An AD can book a forward contract for a part of the amount of Sale Contract Correct Answer

True Multiple Choice Single Answer 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 Match The Following Question Correct Answer Merchant banking Portfolio management Securitization Issue of debt in the form of tradeable security Prime borrower Highest credit rating Traditional banking service Loans and cash credit against security Multiple Choice Multiple Answer What are the activities of ICC? Correct Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime Multiple Choice Multiple Answer Which factors influence the valuation of cash flows? Correct Answer Incomplete capital market , Availability of project specific concessional finance, Multiple Choice Multiple Answer What is the objective of FEDAI? Correct Answer Laying down terms and conditions of exchange business between Customers and Bankers , Interbank understanding for transacting forex business and exchange rates Select The Blank Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount Match The Following Question Correct Answer Intolerable risk Drop the investment project

Country risk analysis Cost of evluation does not justify analysis Stock market analysis Banks are ahead Weightages % Factors' values Multiple Choice Single Answer A bill of exchange issued by a bank which pays specified sum of money to the holder on a specific date is called :Correct Answer Bankers' Acceptance Bond Multiple Choice Single Answer In the syndicated loan arrangement the borrower has to execute :Correct Answer Single Principal loan agreement Select The Blank Rupee was liberalised on ________ account in 1993, and on current account in 1994. Correct Answer Trade Select The Blank Indian Co. intending to make investment under Automatic route needs to submit form ________ to RBI with enclosures. Correct Answer ODA Multiple Choice Multiple Answer A Forward purchase contract was booked with an authorised dealer and subsequently cancelled .It :Correct Answer Can be booked again with another dealer , Can be booked again with the same dealer Select The Blank Question The ________is a Floating rate index for swaps. Correct Answer US Commercial paper rate