INTERNATIONAL BANKING

1. Which of the following is characteristic

feature of foreign exchange markets

A. Merchant market
B. Inter bank market
C. International market
D. All the above
ANSWER :

C. International market
2. What is a permitted currency?

A. Only USD
B. Only GBP
C. USD,GBP,JYEN,DEM
D. Any currency which is freely traded,
active and convertible in the market.
ANSWER :

D. Any currency which is freely

traded,active and convertible in the
market.
3. What is called arbitrage?

A. Referring to 3rd party for selling an

unsettled dispute.
B. Difference between the spot rate
and forward rate.
C. Making profit due to disparities in
price in different markets.
D. Quoting a rate for both buying &
selling.
ANSWER:

C. Making profit due to disparities in

price in different markets.
4. ”REER” denotes ?

A. Real effective exchange rate

B. Reengineering on organization
C. Rendering effective & efficient related
services
D. Relevant equal exchange rate
ANSWER:

A. Real effective exchange rate

5. Rules for conduct of foreign exchange
business in India are framed by

A.FEDAI
B. FEDAI UNDER THE CONTROL OF RBI.
C.EXCHANGE CONTROL DEPARTMENT,RBI
D.IBA
ANSWER:

A.FEDAI
6. Stand by letter of credit is

A. A substitute for performance guarantee

B. Issued in USA as their law prohibits issue
of guarantee by bank.
C. Covered by the provisions of UCPDC 500
D. All the above
ANSWER:

D. All the above

7. Which of the following is not the function
of the World Bank?

A. To provide long term loan to the

member countries
B. To provide loan to private investors
belonging to member countries on its own
guarantee
C. To ensure exchange rate stability
D. To provides loan mainly for productive
activities
ANSWER:

C. To ensure exchange rate stability

8. Whenever the exporter demands overdue
interest on sight bill or the interest payable
on usance bills, at what rate the interest
shall be payable by the importer?

A. LIBOR
B. Prime lending rate
C. Prime rate of the invoice currency
D. No interest is payable
ANSWER:

C. Prime rate of the invoice currency

9. Forward contract in foreign exchange
refers to

A. An agreement between bank and

customer or between banks
B. An agreement between buyer and
agent
C. An agreement between two brokers
D. An agreement between importer and
exporter
ANSWER:

A. An agreement between bank and

customer or between banks
10. An importer who finds that the goods
received are inferior and different from the
ones described in the documents under
LC

A. Can sue the beneficiary for non-

compliance of the terms of LC
B. Can sue the seller for breach of sale
contract terms
C. Can instruct the credit-issuing bank to
reject the claim of negotiation bank
D. Both A and B.
ANSWER:

B. Can sue the seller for breach of sale

contract terms
11. When a packing credit has been availed
in foreign currency, how the post-shipment
credit has to be extended?

A. Post-shipment credit denominated in

Indian Rupees (DBPF/ UBDF )
B. Post shipment credit denominated in
foreign currency (RDBF /RDBF)
C. Either PSC (in Rupees) or RDBF
/RUBF
D. None of the above
ANSWER:

B. Post shipment credit denominated in

foreign currency (RDBF /RDBF) *
12. When an exporter customer requires a
Pre-shipment loan, what are the things a
bank considers before giving the loan?

A. Whether the party is having an IEC

number
B. Whether the party is having an
irrevocable LC or confirmed order
C. Whether the party is having capacity to
execute the contract
D. All the above
ANSWER:

D. All the above

13. NRE accounts can be opened for

A. All foreign Nationals

B. All NRIs including persons of India
origin and (Overseas corporate bodies)
C. Only for overseas corporate bodies
D. NRI's and foreign Nationals
ANSWER:

B. All NRIs including persons of India origin

and (Overseas corporate bodies)
14. A Vostro Account is

A. A rupee account of a foreign bank in India

B. A dollar account of a foreign bank in India
C. A dollar account of a multi national
company in India
D. None of the above
ANSWER:

A. A rupee account of a foreign bank in India

15. Unspent foreign exchange brought back
in the form of TCs by the traveller who has
availed BTQ should be surrendered to the
authorized dealer within

A. 7 days
B. 15 days
C. 180 days
D. Can retain with him for ever
ANSWER:

C. 180 days
16. What are the types of rates that are quoted
for foreign exchange sale transaction?

A. TT selling
B. Bill selling
C. Currency selling
D. All the above
ANSWER:

D. All the above

17. In case of imports on sight terms, when the
bills of entry should be submitted?

A. Within 6 months from the date of payment

B. Within 3 months from the date of payment
C. Within 15 days from the date of payment
D. Within 1 year from the date of payment
ANSWER:

B. Within 3 months from the date of payment

18. A transferable CREDIT refers to a credit which
can be

A. Transferred any number of times, till its

validity

B. Transferred from advising bank to another

bank, for purposes of availing packing. Credit or
for negotiation .

C. Credit which expressly states transferability in

the LC.

D. None of the above.

ANSWER:

C. Credit which expressly states transferability in

the LC itself
19. Which one of the following is not
covered under the shipments
{Comprehensive risks} policy issued by
ECGC favouring an exporter

A. Insolvency of the overseas buyer

B. Overseas buyer's failure to accept the
goods
C. Civil war in the buyer's country
D. Quality dispute relating to the goods
between the exporter and the buyer.
ANSWER:

D. Quality dispute relating to the goods between

the exporter and the buyer.
20. Like GR form for export of physical goods
and services, Softex form is for export of
computer software in non-physical form .To
whom the same is to be submitted?

A. Ministry of Commerce, GOI

B. Ministry of Finance, GOI
C. Department of Electronics, GOI
D. Reserve Bank of India.
ANSWER:

C. Department of Electronics, GOI