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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.

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International Financial Management MCQ

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
D.total 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
B.is determined by the actions of central banks
C.is 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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