International Financial Management - Sec C

55 Questions  I  By Sarathyashi on March 13, 2013
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

  

Question Excerpt

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1.  The forward rate is the exchange rate used for immediate exchange of currencies
A.
B.
2.  What is weight of US Dollar in SDR for January 11 to December 15
A.
B.
C.
D.
3.  An example of cross-hedging is:
A.
B.
C.
D.
4.  Currency devaluation can boost a country's exports, but currency revaluation can increase foreign competition.
A.
B.
5.  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.
6.  When a company adopts the Home Market orient policy
A.
B.
C.
D.
7.  Futures contracts are typically _______; forward contracts are typically _______.
A.
B.
C.
D.
8.  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.
9.  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.
10.  Which of the following is not a form of corporate control that could reduce agency problems for an MNC?
A.
B.
C.
D.
11.  The strike price is also known as the premium price.
A.
B.
12.  SDRs are
A.
B.
C.
D.
13.  The exchange rates of smaller countries are very stable because the market for their currency is very liquid.
A.
B.
14.  Which of the following is not true about a poly-centric solution to international financial management?
A.
B.
C.
D.
15.  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.
16.  The forward market is especially well-suited to offer hedging protection against
A.
B.
C.
D.
17.  __________ is (are) not a determinant of translation exposure
A.
B.
C.
D.
18.  What is a floating exchange rate?
A.
B.
C.
D.
19.  Peso is currency of
A.
B.
C.
D.
20.  Which one of the following is  not a form of FDI
A.
B.
C.
D.
21.  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.
22.  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.
23.  Forfeiting most closely resembles
A.
B.
C.
D.
24.  What is the most traded pair on the Forex?
A.
B.
C.
D.
25.  A _________ is equal to 0.01 for exchange rates expressed to two decimal places, or 0.0001 for exchange rates expressed to four decimal places
A.
B.
C.
D.
26.  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.
27.  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.
28.  Over time, the economic interdependence of nations have:
A.
B.
C.
D.
29.  European currency options can be exercised _______; American currency options can be exercised _______.
A.
B.
C.
D.
30.  What is Option price
A.
B.
C.
D.
31.  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.
32.  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.
33.  Which of the following currency is not traded in Indian future market?
A.
B.
C.
D.
34.  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.
35.  Which of the following is not listed in ADR
A.
B.
C.
D.
36.  Which of the following statements is true?
A.
B.
C.
D.
37.  A share of the ADR of a Dutch firm represents one share of that firm's stock that is traded on a Dutch stock exchange. The share price of the firm was 15 Euros when the Dutch market closed. As the U.S. market opens, the Euro is worth $1.10. Thus, the price of the ADR should be _____.
A.
B.
C.
D.
38.  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.
39.  Eurobonds are certificates representing bundles of stock.
A.
B.
40.  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.
41.  An increase in the current account deficit will place _______ pressure on the home currency value, other things equal
A.
B.
C.
D.
42.  The commonly accepted goal of the MNC is to:-
A.
B.
C.
D.
43.  The international Fisher effect (IFE) suggests that:
A.
B.
C.
D.
44.  When the foreign exchange market opens in the UK each morning, the opening exchange rate quotations will be based on the:-
A.
B.
C.
D.
45.  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.
46.  Futures contracts are typically _______; forward contracts are typically _______.
A.
B.
C.
D.
47.  From 1944 to 1971, the exchange rate between any two currencies was typically:-
A.
B.
C.
D.
48.  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.
49.  Translation exposure reflects:
A.
B.
C.
D.
50.  Which of the following does not facilitate, Inter bank transaction globally
A.
B.
C.
D.
51.  In which case will locational arbitrage most likely be feasible?
A.
B.
C.
D.
52.  Which of the following theories suggests that firms seek to penetrate new markets over time?
A.
B.
C.
D.
53.  When Spread is low, which is not true?
A.
B.
C.
D.
54.  A firm will likely benefit most from diversifying if:
A.
B.
C.
D.
55.  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.
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