International Financial Management MCQ

International Financial Management MCQ

  • Sharad Jaiswal
  • 22nd Nov, 2021

We have listed below the best International Financial Management MCQ Questions for your basic knowledge of International Financial Management. This International Financial Management MCQ Test contains 25+ Multiple Choice Questions. You have to select the right answer to every question.

Practice Best International Financial Management MCQ Questions:

1) Currency appreciation occurs when:

  • A. the value of one currency rises relative to another currency.
  • B.the value of all currencies rise relative to gold.
  • C.the value of one currency falls relative to another currency.
  • D.the value of all currencies fall relative to gold.

2) Hedging is used by companies to:

  • A. Increase the variability of tax paid
  • B.Decrease the variability of tax paid
  • C.Increase the variability of expected cash flows
  • D.Decrease the variability of expected cash flows

3) Purchasing Power Parity should hold:

  • A. Under a fixed exchange rate regime
  • B.Under a dirty exchange rate regime
  • C.Under a flexible exchange rate regime
  • D.None of the above

4) Who maintains the foreign exchange reserves in India ?

  • A. State Bank of India
  • B.Ministry of Finance
  • C.Reserve Bank of India
  • D.Export-Import Bank of India

5) Foreign currency account maintained by a bank abroad is its:

  • A. loro account
  • B.nostro account
  • C.vostro account
  • D.All of the above

6) India’s foreign exchange rate system is?

  • A. Fixed
  • B.Free float
  • C.Managed float
  • D.Fixed target of band

7) TT stands for_______

  • A. Telegraphic Transfer
  • B.Telex Transfer
  • C.Telephone Transfer
  • D.Today Transfer

8) Largest Foreign Exchange market in the world.

  • A. Tokyo
  • B.Japan
  • C.London
  • D.New york

9) Vostro account Means are:

  • A. Your account with us
  • B.Our account with you
  • C.Their account with them
  • D.None of the above

10) The impact of Foreign exchange rate on firm is called as

  • A. Business risk
  • B.Translation exposure
  • C.Transaction exposure
  • D.Operating Exposure

11) Net Working capital means:

  • A. current assets.
  • B.current assets minus current liabilities
  • C.current assets minus inventories
  • assets minus fixed assets.

12) Gift and Relief are:

  • A. Factory Income
  • B.Transfer payment
  • C.Service Payment
  • D.Merchandise Payment

13) A simultaneous purchase and sale of foreign exchange for two different dates is called

  • A. currency devalue
  • B.currency swap
  • C.currency valuation
  • D.currency exchange

14) A floating exchange rate

  • A. determined by the national governments involved
  • determined by the actions of central banks
  • allowed to vary according to market forces
  • D.remains extremely stable over long periods of time

15) Forfaiting most closely resembles

  • A. netting.
  • B.countertrade.
  • C.reinvoicing.
  • D.export factoring.

16) The date of settlement for a foreign exchange transaction is referred to as:

  • A. Value date
  • B.Swap date
  • C.Maturity date
  • D.Transaction date

17) A forward currency transaction_______

  • A. Means that delivery and payment must be made within one business day
  • B.Calls for exchange in the future of currencies at an agreed rate of exchange
  • C.Two business days after the transaction date
  • D.Always at a premium over the spot rate

18) Full fledged money changers are authorized to undertake:

  • A. only purchase transactions
  • B.only sale transactions
  • C.all types of foreign transactions
  • D.purchase and sale of foreign currency notes, coins and travellers cheques

19) LIBOR refers are:

  • A. London Interest Bond off shore Rate
  • B.London Inter Bank Offered Rate
  • C.London interest for Bank offering Rate
  • D.London International Bank Offered Rate

20) Corporate Bonds are also considered as:

  • A. registered bonds
  • B.unregistered bonds
  • C.indenture bonds
  • D.trustee bonds

21) The current system of international finance is a ..................

  • A. gold standard
  • B.fixed exchange rate system
  • C.floating exchange rate system
  • D.managed float exchange rate system

22) Foreign currency forward market is ......................

  • A. Unorganized listed market
  • B.Organized listed market
  • C.Organized market without trading
  • D.An over the counter unorganized market

23) By definition currency appreciation occurs when ................

  • A. the value of all currencies fall relative to gold.
  • B.the value of all currencies rise relative to gold.
  • C.the value of one currency rises relative to another currency.
  • D.the value of one currency falls relative to another currency.

24) In the foreign exchange market, the ________ of one country is traded for the ________ of another country.

  • A. goods, goods
  • B.currency, goods
  • C.currency, currency
  • D.currency, financial instruments

25) An economist will define the exchange rate between two currencies as the .................

  • A. Ratio of import prices to export prices for a particular country
  • B.Difference between total exports and total imports within a country
  • C.Price at which the sales and purchases of foreign goods takes place
  • D.Amount of one currency that must be paid in order to obtain one unit of another currency

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