LIST OF ATTEMPTED QUESTIONS AND ANSWERS 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 , Make additional foreign currency available to ADs at cheaper rates Select The Blank Question ________ is the agency of ICC which deals with the maritime crime. Correct Answer International Maritime Bureau Your Answer International Maritime Bureau
Multiple Choice Single Answer Question Which of them are special funding facilities of IMF ? Correct Answer Buffer Stock Facility Your 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 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 Which is the most actively traded currency in the international market today? Correct Answer US Dollar
Your Answer
US Dollar
Match The Following Question Intolerable risk Country risk analysis Stock market analysis Weightages %
Correct Answer Drop the investment project
Your Answer Drop the investment project
Cost of evluation does not Cost of evluation does not justify analysis justify analysis Banks are ahead Factors' values Factors' values 100% of total
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 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 Your 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 Your Answer Pegged to Single currency
Match The Following Question Maturity of future Note issuance facility Bearer security issued in currency other than that of the country of issue
Correct Answer Time when actual commodity is delivered Euronotes Eurobonds
Your Answer Last date of exercising option Euronotes Eurobonds
Margin on future
Peformance bond or security deposit
Peformance bond or security deposit
True/False Question
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument. Correct Answer False Your 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 Your 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 Your 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 Your 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 Your Answer Which enables the investor to market the same in the secondary market 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 Your 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 Your Answer Preshipment credit up to 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 Your 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 Your Answer Currencies
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 ________ is the acid test for events to be included in country risk. Correct Answer Control by Government' Your Answer Recurrence
Select The Blank Question The Trans European Automated Real Time Gross Settlement Express Transfer is popular in ________. Correct Answer Brussels Your Answer Brussels
Multiple Choice Single Answer Question What is Risk Syndication facility? Correct Answer Sharing of risk of non payment by supplier
Your Answer
Sharing risk of Non payment by the Syndicate of Banks giving loans
True/False Question
If ERD > IRD hen exporter should availa Rupee finance
Correct Answer True Your 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 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 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 Your 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 Your Answer True
True/False Question
There is no difference between CIP and CIF contracts except the mode of transportation. Correct Answer True Your Answer True
Multiple Choice Single Answer Question Financial management is complex process for Correct Answer Companies which have international trade
Your 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 Your Answer Primary activity
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
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
Multiple Choice Single Answer Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which is the offered rate for Rs? Correct Answer USD 1=Rs 50.5000 Your Answer USD 1=Rs 50.5000
Multiple Choice Multiple Answer Question Export finance Correct Answer Preshipment credit , Post shipment credit , Duty Draw back Your Answer Preshipment credit , Post shipment credit , Buyers credit
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 Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations , Which have greater intrinsic value 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 Your 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 Your 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, forhigh values, at a discount to face value are known as ________. Correct Answer Euro Commercial Papers Your 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 Your 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 Your 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 Your 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
Your 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 Your 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 Your Answer Prices of capital market instruments change and are expected to change drastically True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer False Your Answer False
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 Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum $ 100 million or equivalent , Indian co should not have been black listed
Chapter – 1 – Introduction to international capital markets Euro currency ; domestic markets ; US Japan ; Switzerland ; UK ; Australia ; Canada ; European ; centers in ECU; Chapter – 2 – International Finance Markets - the U.S. dollar Market ; The U.S. Dollar Market ; The Japanese Yen Market ; The Sterling Market ; The Euro Market Has Been discussed in the next chapter ; Recent development in international Finance Markets ; Chapter – 3 – International Monetary and Financial System The country’s central ban agreed to buy back their currency at a certain rate of gold; Melting down of gold was freely allowed ; There was unrestricted movement of gold (i.e. import and / or export) The total money supply in the country was determined by the quantum of gold reserves in the country The international monetary fund ; quotas ; funding facilities ; regular facilities tranche policies ; restore Tranche credit Tranche ; extended arrangement (extended fund facility
1 5 – 10
13 – 14
15 – 17
(EEF) ; Standard Arrangement (enlarged Arrears Policy) Special facilities (compensatory and contingency financing facility (CCFF) Buffer stock Financing Facility ; Supplemental Reserve Policy (SRP); Reserve Tranche ; Credit Tranche ; Stand by arrangement ; Extended arrangement or extended fund facilities (EFF) special facilities ; CCFF ; Buffer stock financing Facility (BSFF) ; Supplemental resources facility (SRF) Enhanced structural adjustment facility (ESAF) The fixed exchange rate system Problems faced by the fixed exchange rate system ; failure of fixed rate system ; the European monetary system (EMS) ; Economic and monetary union ; Recent developments ; post – Maastricht developments; emergence of EURO The group of seven ; special drawing rights (SDRS) ; The liquidity problems (SDRS) ; the world bank group ; the world bank; international development agency (IDA) ; international finance corporation (IFC) ; The multinational investment Guarantee Agency (MIGA) Chapter – 4 – External commercial borrowing – country ; company ; Equity ; Fund raising ; underwriting ; hedging ; arbitraging ; note issuance facility ; Mechanism and documentation ; syndicated loans ; floating rate notes ; Flip – Flop FRN ; MIS – Mich FRN ; MINI Max FRN ; Capped FRNs, Perpetual FRNs; VRN structured FRNs; Terms and conditions of FRN Ero Commercial paper (ECP) ; ADRs and GDRs; GDR – Global depositary Receipts ; The roles of different parties involved in launching of GDR GDR – Global Depositary Receipts ; The roles of different parties involved in launching of GDR steps involved in issuance of GDR are as follows Pricing and Closing ; costs ; Advantages & Disadvantages of external commercial borrowing Chapter – 5 – Documents used in International Trade ; Regulatory requirements ; operational requirements ; commercial documents ; financial documents transport documents ; risk covering documents ; official / regulatory documents ; miscellaneous documents ; Commercial documents ; proforma invoice ; commercial invoice ; consular invoice customs invoice ; legalized invoice ; combined certificate of origin and value ; financial documents ; bill of exchange ; The second of the same tenor and date unpaid ; the first of the same tenor and date unpaid ; or similar words ; sight B/E; Tenor ; time B/E; DP Basis ; document against Payment Basis ; Documents against Acceptance Basis Transport documents; bill of lading ; received for shipment bill of lading ; on board bill of lading ; Short form bill of lading ; long form bill of lading clean bill of lading ; claused bill of lading ; through bill of lading ; straight bill of lading ; charter party Bill of lading ; container bill of lading container bill of lading ; combined transport B/L or Mulit Modal B/L lash bill of lading house bill of lading ; Airway bill ; Air consignment Note ; House Air way bill ; Postal Receipt ; Courier /Expected delivery service ; multimodal transport document ; risk covering documents ; insurance policy ; Insurance cover note ; official documents export declaration forms ; export certificate; Certificate of origin ; Miscellaneous documents ; packing list ; weight certificate ; certificate of analysis and quality ; certificate of inspection ; health certificate ; phytosanitary / Radiation / Fumigation Chapter 6 – Methods of payment ; advance payment ; bill for collection ; open account ; barter trade ; bank guarantee ; letter of credit (L / C) Seller wants buyer wants ; parties to a
18 – 19 20 – 23 24 – 27 31 – 35 36 – 39
40 – 41 43 – 46
47 – 49
50 – 53
55 – 57
61 – 66
documentary credit ; applicant issuing bank advising ; confirming bank beneficiary ; negotiating bank ; reimbursing bank Types of letters of credit ; revocal letter of credit ; irrevocable letter of credit ; confimed irrevocable letter of credit ; transferable l / c revolving letter of credit ; credit available by installments; back to back letter of credit ; anticipatory credit or red clause letter of credit ; green clause letter of credit ; deferred payment letter of credit ; standby letter of credit ; flow chart of export transaction under letter of credit Flow chart of export transaction under letter of credit ; various steps in the transaction are as under ; steps no. description Chapter 7 – Export / Import Finance ; - Part I import finance ; import financing through trust receipts / import loans ; import financing through issuing l/ c or bank guarantee ; part II – Export Finance Timely ; adequate ; cheaper on liberal terms ; sources for raising finance ; own funds ; 2 friends and relative ; 3 advance payment from buyer ; 4 Trade credit from suppliers 5 banks and financial institutions ; pre-shipment credit (P.C) Post shipment credit ; advance against cash incentives / duty draw back ; forfeiting ; rediscounting of export bills abroad ; buyer’s credit ; supplier’s credit Chapter – 8 – Procedure in connection with foreign investment in India – Seciton – I foreign direct investment ; FERA ; the practice at which a company can issue shares to non residents ; fema ; esop ; section II – Foreign technical collaboration ; General Hotel & Tourism Related Industries ; procedure for granting approval; I / We hereby certify that ; Documentation ; Standard conditions attached to approval for technology agreement ; no objection ; the agreement shall be subject to Indian laws: Section – III – Portfolio investment ; explanation ; the regulations regarding portfolio investments by NRIs / PIOs are as under ; NRI / PIOs ; Section – IV – Other investments ; Section V – procedure for opening branch / project / Liaison office ; Chapter – 9 – Direct investment outside India – overseas investment division TDR ADR GDR the criteria for investment under the automatic route are as under ; JV/WOS; ODA; The schemes for overseas investment by partnership firms ; criteria for overseas investment by a registered partnership firm under the automatic route ; The procedure to be followed by a partnership firm for making investment under the automatic route ; the procedure to be followed by partnership firms which are not eligible under the automatic route ; restrictions for setting up of a second generation company ; resident individual India can acquire foreign securities without prior approval in the following cases ; provided that ; WOS Chapter – 10 – Taxation ; Bilateral relief Unilateral relief ; for the purpose of this provision Part – 2 Forex risk management and hedging techniques Chapter – 1 Foreign exchange markets – The international Market ; survey were ; the market ; the participants ; information and communication system ; the payment system ; the foreign exchange market in India Chapter – 2 – Exchange Rates – Exchange rage quotes ; direct and indirect rates ; direct rates ; indirect rates; spot and forward rates value rate; ready or cash ; value today ; TOM; spot ; forwards; glossary of market terms; Foreign exchange risks ; transactions exposure ; translation exposure ; economic exposure; Translation – moving towards a consensus ; economic exposure ; an overview ; scenario exchange rages in India ; Inward remittances export encashment of foreign currency
67 – 69
70 – 71 73 – 74
75 -76 79 – 83 84 – 88
89 - 92 95 – 99
100 – 102
105 – 106 109 – 114 117 – 123
124 – 127
travelers cheques ; encashment of foreign currency notes; outward remittances ; imports ; issuing foreign currency travelers cheques issuing foreign currency notes ; Type of transaction exchange rate nomenclature ; Factors affecting movement of exchange rates ; summary Chapter – 3 – Forward contracts - Forward cover for merchants – forward purchase cover forward sales contract - repayment of foreign currency loans – period of delivery – cross currency booking (sale / Purchase ) ; utilization of the forward cover ; cancellation ; calculation of exchange rates for forward contracts Cancellation ; early delivery and rollover of forward contracts ; forward sale contracts ; forward purchase contract ; early delivery ; rollover charges Chapter 4 – Options and Futures – History and development ; recent trends ; key features of options and futures ; premium ; maturity or expiration date ; exercise ; in the money ; at the money ; out of the money American option European option ; underlying asset price time before expiration ; underlying asset price ; time before expiration the rate of interest volatility Pricing and analysis ; pricing of options ; underlying asset price ; exercise price ; options and futures products today ; interest rate options ; foreign exchange options and futures ; equity linked options ; commodity linked futures and options Chapter – 5 - Swaps What are swaps ; interest rate swaps ; lowering financial cost ; hedge exposure to interest rate risk ; restructuring the debt in the balance sheet ; amortizing and accreting swaps ; forward swaps ; Reversible swaps ; basis swaps Currency swaps ; lowering funding cost ; entering restricted capital markets ; reducing currency risk ; supply demand imbalances in the markets ; amortizing currency swaps ; accreting currency swaps ; floating – for floating rate currency swaps ; interest payments ; asset swaps PART 3 – AGENCIES INVOLVED IN INTERNATIONAL TRADE Chapter – 1 – Export import Bank of India ; Functions of Exim Bank ; the exim bank performs the following functions ; incidental functions ; operations programmes ; direct financial assistance to exporters ; consultancy and technology services ; pre-shipment credit ; facilities for export – oriented units ; overseas investment facility buyer credit facilities for deemed exports small scale industry export bills rediscounting; the latest new schemes in operation since 1992 are the following Chapter – 2 – Reserve Bank of India Exchange controls in India – RBI as the exchange control authority ; Authorized dealers (Ads) ; Money changers ; other receipts ; payment for imports ; other payments ; delegation to Ads; securities ; foreign currency accounts; liberalization of exchange control Sodhani Committee Recommendations ; Exchange rate management ; Chapter – 3 – Foreign Exchange dealers association of India ; Uniform customs and practice for collection ; Chapter 4 – International chamber of commerce – ICC – WCF – IBCC – WCF Chapter – 5 – Export credit guarantee corporation of India ; ECGC; need for export credit insurance ; credit insurance policies ; scr or standard policy ; turnover policy ; small exporter policy ; specific shipment policy (short term); buyer wise policy ; specific policy for supply contract insurance cover for buyer’s credit and line of credit Services Policy ; construction works policy ; maturity factoring ; Guarantees to banks ;
128 – 129 131 – 137
138 – 141 143- 147
148 – 152 155 – 157
158 – 161
163 – 166
169 – 173
174 – 177 179 – 180 183 – 183 189 – 190
191
packing credit guarantee ; export production finance guarantee ; post – shipment credit guarantee ; export finance guarantee ; export performance guarantee; export finance (overseas lending ) Guarantee Part – 4 – Miscellaneous Chapter 1 – Exchange Earner’s foreign currency (EEFC) Status holder exporter ; individual professional ; others; permissible credits ; permissible debits ; Chapter 2 – Country Risk ; Quantifying country risk ; A comprehensive example ; use of country risk ; assessment ; Chapter 3 – International capital Budgeting - The Basic Frame work Chapter 4 – Incoterms – Group E departure EXW ; Group F Main carriage unpaid ; FAS ; FOB ; CFR ; CIF ; CPT ; CIP ; Group C; Group D ; Arrival DAF ; DES ; DEQ; DDU CTD / MTO ; DDP ; delivered duty paid (CTD / MTO) Chapter – 5 – Actuals ; arbitrage ; bankers’ acceptance bond (BAS) ; Bearer Bond ; Bid rate ; Bond ; Bull; call option ; caps ; cash commodity ; cash market ; cedel ; certificate of deposit (CD) class of option ; closing price ; commission ; commercial paper (CP) ; contract specifications ; convertible bond ; coupon ; cover; delivery ; delivery month ; equity ; equity swaps ; equity collar ; Eurobond ; Euro clear ; euro commercial paper; euro –currency ; Exercise price ; expiration date; floating rate note ; fundamental Analysis ; futures contract hedge ; Hybrid ; Interest Rate swap; Intermediation ; Intrinsic Value ; Libor ; Long margin ; margin call maturity naked position ; note issuance facility (NIF) Option ; overbought ; oversold ; physical market ; position ; premium purchaser ; put option ; settlement price short ; speculator ; strike price ; straight debt tap ; technical analysis tranche ; tombstone volatility ; volume ; withholding tax ; yankee bond ;
195
199 203 – 204 207- 212 215 – 217
218 -219 220 – 221
Chapter – 1 – Introduction to international capital markets
Ero currency market ; Domestic market ; US, Japan Switzerland ; uk, australia canada ; european conters in ECU ; Euro ; Asian doller market ; forex marker SDR ; ECU ; US dollar ; German ; Swiss ; Japanees ; France ; Canada ; Australia; Chaper - 2 - International financial Markets - The U.S.Dollar Market ; pricing ; federal reservice board; curency ; central bank of US ; The Japanese Yen Market ; Mof; Long Term Prime Rate ; 1970 japanese The Sterling Market ; 20th 19th century 1979 ; OECD Organization for economic co-operation & development EMS Exchange rate Mechanism; FRN ; Bulldog; the EURO Market has been discussed in the nex chapter Recent development in international financial markets ; septer 11 enron LtCN (Long term capital Management Brazil china and mexico; 1990 ; 1980 ; severe tests financial system; securitization forces banks ; attractive to browwerw; legal issues flexibility ; financial market development segement of ; swaps cash flow ; roject related; gain access to international ; marketability ; new financing techniques;
1 1 2 5 6 7 7 8 9 10 13
Chapter – 3 – International Monetary and Financial System
1945 ; 1944 ; intenrational world Bank for reconstruciton and development; second world war was european ; IMF International Monetary Fund; Gold standard first world war The country's Central Bank agreed to buy back their currency at a certain rate of
13 13
gold; melting down of gold was freely allowed There was unrestricted movement of gold (I.e. import and / export The total money supply in the country was determined by the quantum of gold reserves in the country 1870 ; 1914 ; 1821 ; 1834 ; 1870 ; European countries gold standard in 1933 ; 1930 International Monetary Co-operation ; IBRD ; IMF ; popularly known as world bank IMF ; the international monetary fund 1945 ; 1971 ; 25 years ; aims SDR ((special drawing rights ) 25% 1960 ; 1963 ; Gross domestic product; 5 years ; SDR 146 bn to SDR 212 ; 45% ; 1998 ; Two parts Funding Facilities ; Regular Facilities ; Special facilities ; restore tranche credit tranche ; compensatory and contingency financing facility (CCFF) ; Extended arrangement (Extended Fund Facility EEF) ; Buffer stock Financing Facility ; Standard Arrangement (Enlarged Arrears Policy ) ; Supplemental Reserve Policy (Supplemental Reserve Policy (SRP Reserve Tranche ; Credit Tranches ; Stand - By Arrangement Extended arrangement or extended fund facilities (EFF) Special Facilities ; CCFF ; Buffer Stock Financing Facility ; BSFF ; Supplemental Resource Facility (SRF) ; 1997 Enhance Structural Adjustment Facility (ESAF) ; The fixed exchange rate system US dollars 35 ounce of gold Problem faced by the fixed exchange rate system ; 1960 ; value apprehension ; delay in adjustment failure of fixed rate system ; the european monetary system (EMS) European Community Currency Snake ; 1973 ; EMS EC ECU European Currency Unit ; SDR ; ERM ; DM ; matrix german bundesbank EM ; PST ; ERM ; Economic and monetary Union ;
13 14 14 14 15 16 16 16 17 17 18 18 19 20 20 21
LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question
Integrated branches of Commercial banks handle forex transactions as well as options, swaps, futures, arbitrage operations Correct Answer True Your Answer True
True/False Question
JV means Joint venture and WOS means World of Security.
Correct Answer False Your 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 Your Answer 50 basis points over LIBOR
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 Multiple Choice Single Answer Question In the syndicated loan arrangement the borrower has to execute :Correct Answer Single Principal loan agreement Your Answer Single Principal loan agreement
True/False Question
At Least one principal Lender bank is essential for issue of the ADR or GDR. Correct Answer False Your Answer True
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. Your 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 Your Answer One who pays the fixed rate of interest
True/False Question
Till August 1994 India was following the Indirect Methodof Rate quotation. Correct Answer False Your 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 Your 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 Your 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 Your Answer Purchase and sell foreign currency notes and travellers cheques and also Give export finance
Select The Blank Question Any company involved in foreign exchange transactions is exposed to ________ risk. Correct Answer Currency Your 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 Your 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 Aribtration and dispute resolving , Canvass for open trade combat commercial crime Your Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime , Increased Govt regulation of Business True/False
Question
Cause of increase in cost of public issues Underwriting fees , selling commission Correct Answer True Your Answer False
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
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 Your Answer True
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 Your Answer Demand and supply, interest rates, inflation, , Sentiment, Speculation , GDP,Balance of trade and payment,Unemployment Match The Following Question Departure Main carriage paid Main carriage unpaid Arrival
Correct Answer EXW CFR FAS DES
Your Answer EXW CFR FAS 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 Your Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term bonds , Linking of issues to currency swaps
True/False Question
In red clause credit some clauses are printed in Red ink.
Correct Answer True Your Answer False
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 Your 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 Your 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 Your 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 Your 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 authorised by Importer. Your Answer Export Inspection Council , Person authorised 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 Your Answer United Kingdom
True/False Question
In developed markets, speculators play important role in determining the trend of currency rates. Correct Answer True Your 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 Your Answer Shelf Registration
Select The Blank Question In Overseas market the forward rate is generally quoted on the basis of ________. Correct Answer Fixed date Your Answer Calendar month
Select The Blank Question Forward Margin makes a currency costlier then the currency is at ________. Correct Answer Premium Your Answer Discount
Multiple Choice Multiple Answer Question These are the parties to the documentary credit :Correct Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bank Your 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 Softloans to poorer countries in Asia , Give project finance from resources raised in world capital market
Your Answer
Give Softloans 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 Your Answer Exchange Rates
Select The Blank Question In mid 1992 ________ rejected the ratification of Maastricht treaty Correct Answer Denmark Your Answer UK
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 Your 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. Your Answer To Reserve Bank of India, fortnightly
Select The Blank Question ECGC provides cover to an Indian contractor for construction work abroad under ________. Correct Answer Construction works policy Your Answer Export Performance Guarantee
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 Your 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 Your Answer USD 275 Billion
Multiple Choice Multiple Answer Question What are the sources of raising funds for exports? Correct Answer Suppliers credit , Forfaiting Your Answer Suppliers credit , Forfaiting
Select The Blank Question Forward margin makes a currency cheaper then the currency is at ________. Correct Answer Discount Your Answer Discount
Multiple Choice Single Answer Question Name the common forex derivatives :Correct Answer Options, futures Your Answer Options, futures
True/False Question
Country risk analysis is a futile exercise in the background of cost of analysis. Correct Answer True Your Answer False
Select The Blank Question Even after liberalisation of exchange controls, the Euro sterling market remained volatile because of uncertainties in UK and gyrations of sterling against major ________ countries Correct Answer OECD Your Answer OECD
Match The Following Question Issues linked with LIBOR,LIBID,LIMEAN
Correct Answer FRNs
Your Answer FRNs
Issue of bonds without fixed rate of interest, linked to short term interest rate in the global market
FloatingRate Note
FloatingRate Note
Issue of loans Syndicated Loans internationally,through arranger, underwriter,co manager, for a large amount for sharing risk of lending Equity issues in the foreign markets either as direct investments or portfolio investments. American or Global Depository Receipts
Syndicated Loans
American or Global Depository Receipts