International Financial Management - Sec C

55 Questions  I  By Sarathyashi
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Financial Management Quizzes & Trivia
This is IFM quiz for students of Semester 2 July 12-13 batch (Sec C), Alliance School of Business, Bangalore. This quiz will be for 20 minutes students need to answer 30 questions. By Prof. Sarath Babu

  
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Questions and Answers Excerpt

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1.  Based on interest rate parity, the larger the degree by which the foreign interest rate exceeds the UK interest rate, the:-
A.
B.
C.
D.
2.  Buy = _________ and Sell = _________.
A.
B.
C.
D.
3.  Which of the following currency is not traded in Indian future market?
A.
B.
C.
D.
4.  The forward rate is the exchange rate used for immediate exchange of currencies
A.
B.
5.  Which of the following does not facilitate, Inter bank transaction globally
A.
B.
C.
D.
6.  What is a floating exchange rate?
A.
B.
C.
D.
7.  Which of the following is not a way in which agency problems can be reduced through corporate control?
A.
B.
C.
D.
8.  Assume that the inflation rate in Canada is 3.20%, while the inflation rate in the U.S. is 3.00%. According to PPP, the Canadian dollar (CAD) should _______ by _______%.
A.
B.
C.
D.
9.  What is the size of a unit for Yen future currency trading in India?
A.
B.
C.
D.
10.  Forfeiting most closely resembles
A.
B.
C.
D.
11.  An increase in the current account deficit will place _______ pressure on the home currency value, other things equal
A.
B.
C.
D.
12.  An increase in UK interest rates relative to India's interest rates is likely to ________ the UK demand for Rupees and _________ the supply of Rupees for sale.
A.
B.
C.
D.
13.  Eurobonds are certificates representing bundles of stock.
A.
B.
14.  Over time, the economic interdependence of nations have:
A.
B.
C.
D.
15.  Which of the following theories suggests that firms seek to penetrate new markets over time?
A.
B.
C.
D.
16.  European currency options can be exercised _______; American currency options can be exercised _______.
A.
B.
C.
D.
17.  An example of cross-hedging is:
A.
B.
C.
D.
18.  Under the gold standard, each currency was convertible into gold at a specified rate and the exchange rate between two currencies was determined by their relative convertibility rates per ounce of gold.
A.
B.
19.  The currency of country X is pegged to the currency of country Y. Assume that county Y's currency depreciates against the currency of country Z. It is likely that country X will export _______ to country Z and import _______ from country Z.
A.
B.
C.
D.
20.  Peso is currency of
A.
B.
C.
D.
21.  What is the most traded pair on the Forex?
A.
B.
C.
D.
22.  Currency devaluation can boost a country's exports, but currency revaluation can increase foreign competition.
A.
B.
23.  To close a position, you need to buy or sell _________ amount of the open order, thereby reducing the open position to zero.
A.
B.
C.
D.
24.  An increases in US exports to foreign markets ________________ the amount of dollars in the foreign exchange and _______________ the value of the US dollar
A.
B.
C.
D.
25.  __________ is (are) not a determinant of translation exposure
A.
B.
C.
D.
26.  Translation exposure reflects:
A.
B.
C.
D.
27.  The strike price is also known as the premium price.
A.
B.
28.  Assume the Canadian dollar is equal to £0.51 and the Peruvian Sol is equal to £0.16. The value of the Peruvian Sol in Canadian dollars is:-
A.
B.
C.
D.
29.  A weakening of the U.S. dollar with respect to the British pound would likely reduce the U.S. exports to Britain and increase U.S. imports from Britain.
A.
B.
30.  A firm will likely benefit most from diversifying if:
A.
B.
C.
D.
31.  Assume that a Japanese car manufacturer exports cars to U.S. dealerships, which are priced in yen. The demand for those cars declines when the yen is strong. The manufacturer also produces some cars in the U.S. with U.S. materials and those cars are priced in dollars. The manufacturer could reduce its economic exposure by:
A.
B.
C.
D.
32.  If the interest rate is lower in the U.S. than in the United Kingdom and if the forward rate of the British pound is the same as its spot rate:-
A.
B.
C.
D.
33.  When you own ______, there is no obligation on your part; however, when you own _____, there is an obligation on your part
A.
B.
C.
D.
34.  Assume a two-country world: Country A and Country B. Which of the following is correct about purchasing power parity (PPP) as related to these two countries?
A.
B.
C.
D.
35.  What is Option price
A.
B.
C.
D.
36.  Licensing is the process by which a firm provides its technology (copyrights, patents, trademarks or trade names) in exchange for fees or some other specified benefits.
A.
B.
37.  Which of the following is not listed in ADR
A.
B.
C.
D.
38.  SDRs are
A.
B.
C.
D.
39.  When Spread is low, which is not true?
A.
B.
C.
D.
40.  The international Fisher effect (IFE) suggests that:
A.
B.
C.
D.
41.  Which one of the following is  not a form of FDI
A.
B.
C.
D.
42.  Which of the following is not true about a poly-centric solution to international financial management?
A.
B.
C.
D.
43.  Which of the following statements is true?
A.
B.
C.
D.
44.  Assume that a bank's bid rate on Swiss francs is £0.25 and its ask rate is £0.26. Its bid-ask percentage spread is:
A.
B.
C.
D.
45.  What would be the cost of borrowing, if an Indian firms borrows money from US, Interest rate in US is 6%, India - 9% and Dollar appreciation rate – 3%
A.
B.
C.
D.
46.  In general, when speculating on exchange rate movements, the speculator will borrow the currency that is expected to appreciate and invest in the country whose currency is expected to depreciate.
A.
B.
47.  The commonly accepted goal of the MNC is to:-
A.
B.
C.
D.
48.  Mr. A bought 10 quantities call option from Mr. B and sold it to Mr. C. What is OI and traded Volume
A.
B.
C.
D.
49.  What is weight of US Dollar in SDR for January 11 to December 15
A.
B.
C.
D.
50.  Futures contracts are typically _______; forward contracts are typically _______.
A.
B.
C.
D.
51.  From 1944 to 1971, the exchange rate between any two currencies was typically:-
A.
B.
C.
D.
52.  When a company adopts the Home Market orient policy
A.
B.
C.
D.
53.  In which case will locational arbitrage most likely be feasible?
A.
B.
C.
D.
54.  Which of the following is not a form of corporate control that could reduce agency problems for an MNC?
A.
B.
C.
D.
55.  The forward market is especially well-suited to offer hedging protection against
A.
B.
C.
D.
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