McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) , Master of Commerce (M.com) .
Chapters
| 51. |
The price at which a market maker is prepared to buy (a currency) or borrow (money) is termed as |
| A. | spot rate |
| B. | bid rate |
| C. | ask price |
| D. | forward rate |
| Answer» B. bid rate | |
| 52. |
The __________ is especially well suited to offer hedging protection against transactions risk exposure. |
| A. | forward market |
| B. | spot market |
| C. | transactions market |
| D. | inflation-rate market |
| Answer» A. forward market | |
| 53. |
Difference between buying and selling rates in an exchange rate is known as |
| A. | strike price |
| B. | spread |
| C. | swap points |
| D. | spot rate |
| Answer» B. spread | |
| 54. |
Exchange rate between currency A and currency B, given the values of currencies A and B with respect to a third currency is known as |
| A. | golden standard |
| B. | flexible exchange rate |
| C. | fixed exchange rate |
| D. | cross exchange rate |
| Answer» D. cross exchange rate | |
| 55. |
The swap arrangement where principal amounts are not exchanged, but periodical payments will be |
| A. | currency swap |
| B. | cross currency interest swap |
| C. | interest rate swap. |
| D. | non-financial swap. |
| Answer» C. interest rate swap. | |
| 56. |
What is FEMA? |
| A. | first exchange management act |
| B. | foreign exchequer management act |
| C. | foreign exchange management act |
| D. | foreign evaluation management act |
| Answer» C. foreign exchange management act | |
| 57. |
______________ involve the exchange of currency the second day after the date on which the two foreign exchange traders agree to the transaction. |
| A. | spot transactions |
| B. | outright forward transactions |
| C. | fx swaps |
| D. | reverse transactions |
| Answer» A. spot transactions | |
| 58. |
Outright forward transactions involve the exchange of currency beyond three days at a fixed exchange rate, known as the: |
| A. | spot rate. |
| B. | forward rate |
| C. | fx swap rate. |
| D. | reverse transaction rate |
| Answer» B. forward rate | |
| 59. |
The biggest market for foreign exchange is which of the following? |
| A. | new york |
| B. | tokyo |
| C. | london |
| D. | china |
| Answer» C. london | |
| 60. |
The ______________ is the price at which the trader is willing to buy foreign currency. |
| A. | offer |
| B. | bid |
| C. | spread |
| D. | cross rate |
| Answer» B. bid | |
| 61. |
Which of the following is the price at which the trader is willing to sell foreign currency? |
| A. | bid |
| B. | spread |
| C. | offer |
| D. | cross rate |
| Answer» C. offer | |
| 62. |
.………is only a legal agreement and it is not an institution, but ….. is a permanent institution. |
| A. | gatt, wto |
| B. | wto, gatt |
| C. | wto, imf |
| D. | imf, gatt |
| Answer» A. gatt, wto | |
| 63. |
The WTO was established to implement the final act of Uruguay Round agreement of …… |
| A. | mfa |
| B. | gatt |
| C. | trip’s |
| D. | uno |
| Answer» B. gatt | |
| 64. |
WTO stands for |
| A. | world technology association |
| B. | world time organization |
| C. | world trade organization |
| D. | world tourism organization |
| Answer» C. world trade organization | |
| 65. |
What is the name of the international organization that fosters monetary and financial cooperation and serves as a bank for central banks? |
| A. | wto |
| B. | eu |
| C. | world bank |
| D. | bank for international settlements |
| Answer» D. bank for international settlements | |
| 66. |
Which of the following are institutional banks that provide financial support and professional advice for developing countries? |
| A. | multilateral development banks |
| B. | central banks |
| C. | investment banks |
| D. | barclays bank |
| Answer» A. multilateral development banks | |
| 67. |
In the foreign exchange market, the ________ of one country is traded for the ________ of another country. |
| A. | currency; currency |
| B. | currency; financial instruments |
| C. | currency; goods |
| D. | goods; goods |
| Answer» B. currency; financial instruments | |
| 68. |
Which of the following examples definitely illustrates a depreciation of the U.S. dollar? |
| A. | the dollar exchanges for 1 pound and then exchanges for 1.2 pounds. |
| B. | the dollar exchanges for 250 yen and then exchanges for 275 francs. |
| C. | the dollar exchanges for 100 francs and then exchanges for 120 yen. |
| D. | the dollar exchanges for 120 francs and then exchanges for 100 francs |
| Answer» D. the dollar exchanges for 120 francs and then exchanges for 100 francs | |
| 69. |
Interest rate swaps are usually possible because international financial markets in different countries are |
| A. | efficient |
| B. | perfect |
| C. | imperfect |
| D. | both a & b |
| Answer» C. imperfect | |
| 70. |
The exchange rate is the |
| A. | total yearly amount of money changed from one country’s currency to another country’s currency |
| B. | total monetary value of exports minus imports |
| C. | amount of country’s currency which can exchanged for one ounce of gold |
| D. | price of one country’s currency in terms of another country’s currency |
| Answer» D. price of one country’s currency in terms of another country’s currency | |
| 71. |
A speculator in foreign exchange is a person who |
| A. | buys foreign currency, hoping to profit by selling it a a higher exchange rate at some later date |
| B. | earns illegal profit by manipulation foreign exchange |
| C. | causes differences in exchange rates in different geographic markets |
| D. | none of the above |
| Answer» A. buys foreign currency, hoping to profit by selling it a a higher exchange rate at some later date | |
| 72. |
Under a gold standard, |
| A. | a nation’s currency can be traded for gold at a fixed rate |
| B. | a nation’s central bank or monetary authority has absolute control over its money supply |
| C. | new discoveries of gold have no effect on money supply or prices |
| D. | a & b |
| Answer» A. a nation’s currency can be traded for gold at a fixed rate | |
| 73. |
The Bretton Woods accord |
| A. | of 1879 created the gold standard as the basis of international finance |
| B. | of 1914 formulated a new international monetary system after the collapse of the gold standard |
| C. | of 1944 formulated a new international monetary system after the collapse of the gold standard |
| D. | none of the above |
| Answer» C. of 1944 formulated a new international monetary system after the collapse of the gold standard | |
| 74. |
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 |
| Answer» D. managed float exchange rate system | |
| 75. |
Ask quote is for |
| A. | seller |
| B. | buyer |
| C. | hedger |
| D. | speculator |
| Answer» A. seller | |
| 76. |
A simultaneous purchase and sale of foreign exchange for two different dates is called |
| A. | currency devalues |
| B. | currency swap |
| C. | currency valuation |
| D. | currency exchange |
| Answer» B. currency swap | |
| 77. |
The basic objective of export Promotion Council is to promote and develop the Exports of the |
| A. | particular products of country |
| B. | only attractive projects of the country |
| C. | only services industry products of the country. |
| D. | overall exports of the country. |
| Answer» D. overall exports of the country. | |
| 78. |
The main promoter of trade liberalization was |
| A. | gatt |
| B. | nafta |
| C. | cepta |
| D. | cisa |
| Answer» A. gatt | |
| 79. |
_______________ is an important reason for economic integration. |
| A. | geographic proximity |
| B. | democracy |
| C. | totalitarianism |
| D. | common law practice |
| Answer» A. geographic proximity | |
| 80. |
In which of the following types of regional economic integration are internal tariffs eliminated with member countries levying a common external tariff on goods being imported from nonmembers. |
| A. | customs union |
| B. | free trade area |
| C. | common market |
| D. | complete economic integration |
| Answer» A. customs union | |
| 81. |
A _______________ focuses on eliminating internal tariffs with member countries levying a common
|
| A. | free trade area |
| B. | common market |
| C. | customs union |
| D. | complete economic integration |
| Answer» B. common market | |
| 82. |
_______________ occurs when production shifts to more efficient producers for reasons of
|
| A. | trade diversion |
| B. | divestment |
| C. | trade creation |
| D. | retrenchment |
| Answer» C. trade creation | |
| 83. |
Which of the following was developed with the rationale that the U.S.-Canadian trade was the largest bilateral trade in the world and that the United States is Mexico’s and Canada’s largest trading partner? |
| A. | cefta (the central european free trade agreement) |
| B. | nafta (the north american free trade agreement) |
| C. | asean (association of south east asian nations) |
| D. | eu (the european union) |
| Answer» B. nafta (the north american free trade agreement) | |
| 84. |
_______________ occurs when trade shifts to countries in the group at the expense of trade with
|
| A. | trade creation |
| B. | divestment |
| C. | retrenchment |
| D. | trade diversion |
| Answer» D. trade diversion | |
| 85. |
NAFTA calls for all of the following EXCEPT: |
| A. | the harmonization of trade rules |
| B. | the liberalization of restrictions on services |
| C. | the implementation of a common currency |
| D. | the liberalization of restrictions on foreign investment |
| Answer» C. the implementation of a common currency | |
| 86. |
NAFTA is a good example of: |
| A. | trade erosion. |
| B. | divestment. |
| C. | retrenchment. |
| D. | trade diversion. |
| Answer» D. trade diversion. | |
| 87. |
Where is the headquarters of the EU? |
| A. | belgium |
| B. | netherlands |
| C. | luxembourg |
| D. | greece |
| Answer» A. belgium | |
| 88. |
Apart from India, Pakistan and Bangladesh who are the other member countries of SAARC? |
| A. | nepal, bhutan, thailand and singapore |
| B. | nepal, bhutan, malaysia and maldives |
| C. | nepal, bhutan, maldives, sri lanka and afghanistan |
| D. | none of the above |
| Answer» C. nepal, bhutan, maldives, sri lanka and afghanistan | |
| 89. |
Which of the following is not the main purpose for formation of SAARC |
| A. | to combat terrorism |
| B. | to promote the welfare of the people of south asia |
| C. | to form mutual defense against foreign aggression |
| D. | none of the above |
| Answer» C. to form mutual defense against foreign aggression | |
| 90. |
SAPTA is a trade agreement by _________________ |
| A. | asean nations |
| B. | apec nations |
| C. | saarc nations |
| D. | eu nations |
| Answer» C. saarc nations | |
| 91. |
What is the full form of ASEAN? |
| A. | association of south east asian nations |
| B. | administration of south east asian nations |
| C. | administration of southern eastern asian nations |
| D. | organisation of south east asian nations |
| Answer» A. association of south east asian nations | |
| 92. |
The European Union is a free trade association that is based on a(n) |
| A. | economic and monetary union. |
| B. | economic union. |
| C. | monetary union. |
| D. | a commonly agreed upon list of lowered tariffs. |
| Answer» A. economic and monetary union. | |
| 93. |
Which one of the following has a single currency managed by a common central bank? |
| A. | asean |
| B. | european union |
| C. | world trade organization |
| D. | the organization for economic cooperation and development |
| Answer» B. european union | |
| 94. |
Which one of the following is renowned for its high-quality databases on economic and social data? |
| A. | wto |
| B. | eu |
| C. | oecd |
| D. | world bank |
| Answer» C. oecd | |
| 95. |
The main reason behind MNCs investments are |
| A. | to benefit foreign countries |
| B. | to provide financial support to the country’s government |
| C. | for the welfare of underprivileged people. |
| D. | to increase the assets and earn profits. |
| Answer» D. to increase the assets and earn profits. | |
| 96. |
Which institute supports investments and foreign trade in India? |
| A. | international monetary fund (imf) |
| B. | world trade organisation (wto) |
| C. | world bank |
| D. | international labour organisation (ilo) |
| Answer» B. world trade organisation (wto) | |
| 97. |
Within an international context, what are 'economies of scope' synonymous with? |
| A. | decreased cost per unit of output. |
| B. | buying components in bulk. |
| C. | reusing a resource from one business/country in additional businesses/countries. |
| D. | all of the above. |
| Answer» D. all of the above. | |
| 98. |
According to the concept of the value chain, of an international firm is profitable if: |
| A. | the value it commands exceeds the costs involved in creating the product |
| B. | the value it commands is lower than the costs involved in creating the product |
| C. | it operates in global industries |
| D. | the value it commands equals the costs involved in creating the product. |
| Answer» A. the value it commands exceeds the costs involved in creating the product | |
| 99. |
When Safeway supermarkets in the United States buys strawberries from Mexico, |
| A. | it must use dollars to pay mexican farmers. |
| B. | it may use any currency it chooses. |
| C. | it must use pesos to pay mexican farmers. |
| D. | the transaction shows up in the u.s. capital account. |
| Answer» C. it must use pesos to pay mexican farmers. | |
| 100. |
A country records its international finance accounts in it’s |
| A. | balance of payments accounts. |
| B. | import/export log accounts. |
| C. | trade payments accounts. |
| D. | net exports payments account. |
| Answer» A. balance of payments accounts. | |
Done Studing? Take A Test.
Great job completing your study session! Now it's time to put your knowledge to the test. Challenge yourself, see how much you've learned, and identify areas for improvement. Don’t worry, this is all part of the journey to mastery. Ready for the next step? Take a quiz to solidify what you've just studied.