1. Which factors are considered by RBI before granting permission to Foreign Company to set up a branch office in India?

Track reco of the co, existing trade reltns, fin positin of the co Portfolio investment capacity,technology transfer intended Personnel working in the company, inward remittance External value of the currency of the company, company profile

2. Import finance is normally available at rates cheaper than domestic rates

True / False

3. While transferring a share from resident to nonresident whose permission has to be taken

Sect of inds assistance goi SEBI, RBI, stockexchange of nonresidents country

4.Packing credit is extended for a period of ----- days , 60 days,90 days, 120days, 180 days 5. Name the types of commercial debt markets Domestic, offshore, bond mkt, derivative mkt 6. Export finance can be classified into : Preshipment credit, post shipment credit, dutydrawback, buyers credit 7. EXIM bank acts as a __________ for RBI, GOvt & IDBI. Agent, financier, AD, co banker 8. Exports on Defered payment credit are eligible for fin & refinance from EXIM bank, T /F 9. When is an invoice considered to be a consular?

Consularised by EXIM Bk , World BK, Exchange control of India, notation by consular of the importer in the exporters country 10. Agency which issue export certificates? EXIM Bank, Export promotion council, commodity board, chamber of commerce 11. No guidelines on quality have been provided for investment under Liberalised remittance 25,000USD scheme by RBI: T/F

12. Within 30 days of receipt of money from For Investment the Indian Co. will report to the RO of RBI what details : Name & address of the FI, Date of Receipt of funds, Identification no of FI, Details of govt. Approval 13. Indian party which has made direct investment abroad has to submit an Annual perf report in form ARP-1 to RBI : T /F 14. Date of exchange of currency : value date, delivery date, odd date, expiry date 15. Maxim for forex dealers in Indirect rate method : Buy Low, Sell High : Buy High, Sell High : Buy Low, Sell High : Buy High, Sell Low 16. Export finance terms : timely, adequate, cheap & liberal terms 17. EXIM bank give direct credit to Import of Capital Goods under : Buyers Credit, Sellers credit, Exp promotion credit, Import abroad credit 18. Franchising & marketing cost for hotel & tourism related tech transfer is limited to : 3% of the gross room sales, 3% of annual turnover 19. What is the facility provided by ECGC to consultant who receive payments over a period of years from clients abroad? Exchange risk coverage, turnover policy, service policy

20. A country can raise finance through bilateral aid of Line of credit from other countries : T/F 21. _________ insures risk in international trade . EXIM Bank, ECGC, RBI, ICC 22. International Bureau was renamed as -------------. FEDAI, INCOTERMS, World Chamber Federation, Uniform Customs & Practices 23. In case of import finance through Trust Receipts, with whom does the ownership of goods remain? Exporter / Importer / Bank of Importer / Bank releasing the import documents 24. Income from interest on balances in NRE account is exempt from Income Tax . T / F 25. All transactions undertaken which do not alter his assets / Liabilities outside India are _----------- account transactions : current acct / capital account / resident account 26. Which type of account can be opened in EEFC ? SB / Current Account / Fixed deposit / Repatriable Acct 27. On which date did FEMA come in to force : 1st June 2000 28. Which are the sources of raising funds : own funds, syndicated loans, friends & relatives, banks 29. ICCs organ of settlement of disputes is ---------. 30. ------------- is non-recourse discounting of export receivables : forfeiting, import loan, export loan 31. It is obligatory for Authorised Dealers under section 74 of FERA to comply with all general & specific directives given by RBI . T / F 32. Debt swaps & asset swaps linked to bonds are----------- : Arbritage , ECBs, equity investments, Floating rate notes 32. Line of credit in African countries is extended by ------------ : Dev Bank of India, IDBI, EXIM, RBI 33. EEFC account holder is eligible to have --------------facility: cheque book & nomination, OD facility, Credit card facility, loan against EEFC account balance

ice Multiple Answer Question What facilities are proposed by Sodhani Committee for NRIs? Correct Answer Housing Loan to NRI staff of Indian Companies, , NRIs be permitted to invest in MMMF Your Answer Housing Loan to NRI staff of Indian Companies, , NRIs be permitted to invest in MMMF Multiple Choice Single Answer Question In whose name is the straight bill of lading issued? Correct Answer The Consignee Your Answer The consignor Multiple Choice Single Answer Question How does ECGC promote export in India? Correct Answer By covering risk of exporting on credit Your Answer By covering risk of exporting on credit Multiple Choice Single Answer Question Documents which satisfy the statutory requirements of any trade and regulatory aurhotiry are known as:Correct Answer Regulatory Documents Your Answer Regulatory Documents Select The Blank Question ________ of India has granted line of credit to African countries for financing export of Capital goods. Correct Answer

EXIM Bank Your Answer EXIM Bank Multiple Choice Multiple Answer Question Underwriters are more attracted to NIF issue because of :Correct Answer Lesser risks , Increased returns , Easy marketability features Your Answer Lesser risks , Increased returns , Easy marketability features Multiple Choice Single Answer Question Name the single most important factor which may devastate the economic viability of an operation in international trade :Correct Answer Unfavourable fluctuation in the exchange rate Your Answer Unfavourable fluctuation in the exchange rate Multiple Choice Multiple Answer Question Which document is used for transportation by air, rail, road, marine? Correct Answer Multimodal transport document , Combined Transport document Your Answer Multimodal transport document , Combined Transport document Multiple Choice Single Answer Question In which of the funding facilities the repayment period is between 3 to 5 years ? Correct Answer C.C.F.F. Your Answer C.C.F.F. Select The Blank Question Association of several scheduled commercial banks for forex business is ________. Correct Answer Foreign Exchange Dealers Association of India Your Answer Foreign Exchange Dealers Association of India True/False Question The credit rating of World Bank is high in the world Capital market because it operates at the debt equity ratio of 1:2 Correct Answer False Your Answer

True Select The Blank Question In Overseas market the forward rate is generally quoted on the basis of ________. Correct Answer Fixed date Your Answer Calendar fortnight Multiple Choice Single Answer Question Proforma Invoice, Commercial Invoice, Consaular Invoice are which type of documents? Correct Answer Commercial Documents Your Answer Regulatory Documents Multiple Choice Single Answer Question How many terms are there under the class " main carriage unpaid"? Correct Answer Three Your Answer Two 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 Single Answer Question As per article IV of IMF for fixed exchange rates member countries agreed to Correct Answer Change exchange rates only for correcting fundamental disequilibrium in external payments with IMF approval Your Answer Change exchange rates only for correcting fundamental disequilibrium in external payments with IMF approval Multiple Choice Single Answer Question As per article IV of IMF for fixed exchange rates member countries agreed to Correct Answer Change exchange rates only for correcting fundamental disequilibrium in external payments with IMF approval Your Answer

Change exchange rates only for correcting fundamental disequilibrium in external payments with IMF approval Multiple Choice Single Answer Question In International trade, Advance payment means :Correct Answer Providing up front cash Your Answer Sending documentary credits Multiple Choice Single Answer Question In case of International trade, the role of a banker in case of a bill for collection is that of :Correct Answer Routing the documents of transport along with other documents and apply the proceeds as per instructions Your Answer Routing the documents of transport along with other documents and apply the proceeds as per instructions Match The Following Question Correct Answer Your Answer European option On or after maturity Out of money Loss On or after maturity In the money Profit Before maturity American option Before maturity Select The Blank Question QA request for additional ________ funds from a customer in a margin call. Correct Answer

Margin Your Answer Liquid Multiple Choice Multiple Answer Question How does RBI control Exports? Correct Answer Through Rule like "Full value of Export bills must be realised in 180 days," , Through Rule like " Export must be denominated In a currency of the Importing country or a freely convertible currency" Your Answer Through Rule like "Full value of Export bills must be realised in 180 days," , Through Rule like " Export must be denominated In a currency of the Importing country or a freely convertible currency" 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 Question The large flow of money internationally was caused primarily by the oil price hikes engineered by ________. Correct Answer OPEC countries Your Answer OPEC countries Multiple Choice Single Answer Question Who books an option forward contract?

Correct Answer Party who is not definite about crystallisation of delivery date Your Answer Party who is not definite about crystallisation of delivery date Multiple Choice Multiple Answer Question What is a 'speculator'? Correct Answer Trader who is neither hedger nor arbitragor , He takes risks for profit Your Answer Trader who is neither hedger nor arbitragor , He takes risks for profit Multiple Choice Single Answer Question Who arranges for Insurance and transportation under EXW contract? Correct Answer Buyer arranges and pays Your Answer Buyer arranges and pays True/False Question Phytosanitary/ Radiation/Fumigation certificates are in the category of Health Certificates Correct Answer True Your Answer True True/False Question If ERD > IRD hen exporter should availa Rupee finance Correct Answer

True Your Answer False Select The Blank Question In ________ transaction the delivery is postponed from the agreed date. Correct Answer Rollover Your Answer Forward Multiple Choice Single Answer Question Exchange Rate means Correct Answer Value of one currency in terms of another Your Answer Value of one currency in terms of another Match The Following Question Correct Answer Your Answer Merchant banking Portfolio management Highest credit rating Securitization Issue of debt in the form of tradeable security Loans and cash credit against security Prime borrower Highest credit rating Note issuing and underwrting facility Traditional banking service

Loans and cash credit against security Issue of debt in the form of tradeable security Select The Blank Question The price at which a person may purchase or sell the underlying ________. Correct Answer Exercise or strike price Your Answer Coupon Multiple Choice Single Answer Question Who introduced the worlds first exchange traded currency futures? Correct Answer Chicago Mercantile Exchange Your Answer Bretton woods Agreement True/False Question In UK in london Market the Indirect Quote Method is still adopted. Correct Answer True Your Answer True True/False Question The Euro Commercial paper is supported by a team-syndicated credit with both sides of the transaction combined into one operation. Correct Answer True

Your Answer False at 5:54 AM 0 comments Links to this post Labels: International Finance (Set - II)

International Finance - 4
LIST OF ATTEMPTED QUESTIONS AND ANSWERS 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 Multiple Choice Single Answer Question Various exchange rate mechanisms are basically used for Correct Answer Correcting currency disequilibrium Your Answer Correcting currency disequilibrium 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 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

Match The Following Question Correct Answer Your Answer Swap price Difference in prices of two legs of buying and selling Difference in prices of two legs of buying and selling Euro Market Market in Euro currencies Market in Euro currencies Making market Quoting rate for both buying and selling a currency Quoting rate for both buying and selling a currency Spread Price difference between bid and offer Price difference between bid and offer True/False Question Floating rate notes are traded in secondary market also. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question In which cases can a Resident Individual in India acquire foreign securities without prior approval? Correct Answer Gift from a person outside India, or Inheritance from a person resident in or outside India , Security issued under Cashless employees stock option scheme Your Answer Gift from a person outside India, or Inheritance from a person resident in or outside India , Security issued under Cashless employees stock option scheme , Purchase from borrowings from Authorised dealers 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 , Set up a market intelligence cell to study and monitor developments in Forex Market , Purchase excess

foreign curency from Ads at higher rates Multiple Choice Multiple Answer Question Why does a Transaction exposure arise? Correct Answer Trading flows , Dividend or capital flows Your Answer Trading flows , Valuation of assets and liabilities abroad in financial statements , Present value of future transaction abroad Select The Blank Question A Documentary credit issued on the strength of another documentary credit is known as ________. Correct Answer Back to Back credit Your Answer Back to Back credit Multiple Choice Single Answer Question What is the difference in a future and a forward contract? Correct Answer Futures are tradeable on public exchange, forwards are not Your Answer Futures are tradeable on stock exchange, forwards are not Select The Blank Question Position in a currency is said to be ________, when sales equal purchases. Correct Answer Square Your Answer Square Select The Blank Question EEFC account holder is allowed to have ________ facility. Correct Answer Cheque book and nomination Your Answer Cheque book and nomination Match The Following Question

Correct Answer Your Answer IBRD World Bank World Bank Collapse of IMF administered fixed exchange rates Early 1970s Early 1970s No International control on Exchange rates Mid 80s Mid 80s Euro as a currency note/coin 2002 2002 Select The Blank Question After the second world war many countries adopted the route of ________ to give facelift to sagging economies. Correct Answer Devaluation of their currencies Your Answer Devaluation of their currencies 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 Select The Blank Question ________ enables bankers to extend purchase, negotiation or discount of export bills. Correct Answer Post shipment credit guarantee Your Answer Post shipment credit guarantee True/False Question The amount in EEFC account can be deposited in FCNR account to get interest. Correct Answer False Your Answer

False Multiple Choice Multiple Answer Question In a documentary credit the word document means :Correct Answer Specified documents of title, transportation, insurance , Specified certificates, and other papers required as per the regulations in the buyers country Your Answer Specified documents of title, transportation, insurance , Cheques, drafts, postal orders, , Credit is documented as an evidence Multiple Choice Multiple Answer Question At the request of M/s Universal Traders Calcutta, State Bank of India opened a documentary credit in Favour of M/s Star Trading Co Dubai, for USD 25000/-.Here State Bank of India Calcutta is known as Correct Answer Issuing Bank , Opening Bank Your Answer Issuing Bank , Exporters Bank , Confirming Bank Multiple Choice Single Answer Question What is the meaning of right to buy or sell the future contract? Correct Answer An Option Your Answer A forward contract Multiple Choice Multiple Answer Question World Bank gives loans for Correct Answer Structural Adjustments , Infrastructure projects , BOP problems Your Answer Structural Adjustments , Infrastructure projects , BOP problems Multiple Choice Multiple Answer Question The maximum period for which a forward contract can be granted by the AD depends upon which RBI directives? Correct Answer Maximum Period of repatriation of export proceeds , Maximum Period of payment for Imports Your Answer

Maximum Period of repatriation of export proceeds , Maximum Period of payment for Imports , The need of the exporter Multiple Choice Single Answer Question If a dealer of securities is quoting rate as 200-250 then the rate 200 signifies which rate with reference to him? Correct Answer Bid rate Your Answer Bid rate Multiple Choice Multiple Answer Question How does a company use swap to restructure debt, in its balance sheet? Correct Answer By resorting to floating rate from fixed rate , By resorting to fixed rate from floating rate Your Answer By resorting to floating rate from fixed rate , By resorting to fixed rate from floating rate , Prepayment of existing debts 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 , It is a stamped agreement and is not valid unless it is signed by the issuer Select The Blank Question An option on a future is ________. Correct Answer Derivative on a derivative Your Answer Derivative on a derivative Multiple Choice Single Answer Question Which invoice is drawn in specific form to be supplied by the consular office of the importer's country, for treatment of preferential tariff rates? Correct Answer Customs invoice

Your Answer Consular Invoice 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 With reference to ECB, fund raising activity includes :Correct Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of shares Your Answer Floating rate notes, bonds, debentures , Syndicate loans, issue of shares True/False Question In an interest rate swap if the payment schedules are identical, only diffrence between the two payments is delivered. Correct Answer True 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 Multiple Choice Single Answer Question Where does the word derivative originate from? Correct Answer Mathematics Your Answer Mathematics True/False

Question An Indian party which has made direct investment abroad has to submit a annual performance report in form ARP-1 to RBI. Correct Answer False Your Answer False Multiple Choice Single Answer Question With whom can an exporter or importer book the forward contract? Correct Answer Authorised dealer/Authorised person Your Answer Exchange Brokers Multiple Choice Single Answer Question What is the Indian Govt's obligation of becoming member of IMF? Correct Answer Ensure orderly exchange arrangement, promote stable exchange rate Your Answer Ensure orderly exchange arrangement, promote stable exchange rate Select The Blank Question When a credit is made to available to additional beneficiary wholly or partly it is called as ________. Correct Answer Transferable credit Your Answer Revolving Credit Multiple Choice Single Answer Question Why have futures and options come into existence? Correct Answer To avoid business risk. Your Answer To avoid business risk. True/False Question With the advent of futures and Options there is no need for additional instruments of risk hedging. Correct Answer

False Your Answer False True/False Question Services of a Paying bank are taken when currencies of exporters country or the importers country is not involved in the transaction. Correct Answer False Your Answer False 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 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 IMF, World Bank and local markets True/False Question Sandby credis are introduced by US Banks because they were not permitted to issue on demand guarantees. Correct Answer True Your Answer True True/False Question Installment credit is issued for specific quantities of goods to be shipped every week or month. 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 Before abandoning the Fixed exchange rate system,the Dollar gold parity was fixed by USA at Correct Answer USD 35 per Ounce of gold Your Answer USD 35 per Ounce of gold Multiple Choice Single Answer Question Mr M has imported some goods from Greece. What is the maximum period within which he must make the payment? Correct Answer Six months from date of shipment Your Answer Six months from date of shipment

at 6:11 AM 0 comments Links to this post Labels: International Finance (Set - III)

Thursday, May 6, 2010

International Finance - 6
This solved paper has been contributed by Rachna.

THANKS TO : Rachna, Batch2008

Date of Attempt - 1st May 2010