International Financial Management - Sec C

55 Questions  I  By Sarathyashi
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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Question Excerpt

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