McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) .
Chapters
| 301. |
In a system of managed float there is less chance of speculation. |
| A. | flexible |
| B. | managed float |
| C. | fixed |
| D. | restictive |
| Answer» B. managed float | |
| 302. |
__ is done to overcome uncertainties. |
| A. | Arbitrage |
| B. | Hedging |
| C. | speculation |
| D. | locking |
| Answer» B. Hedging | |
| 303. |
_ is the opposite of hedging. |
| A. | Arbitrage |
| B. | locking |
| C. | speculation |
| D. | blocking |
| Answer» C. speculation | |
| 304. |
The modern foreign exchange market functions in a system of _ . |
| A. | Fixed exchange rate |
| B. | Gold standard |
| C. | Britton Wood system |
| D. | Floating exchange rate |
| Answer» D. Floating exchange rate | |
| 305. |
Pick out the feature which is not true of the foreign exchange market. |
| A. | Buying and selling of currencies |
| B. | Largest market |
| C. | High liquidity |
| D. | Existence of a central market place |
| Answer» D. Existence of a central market place | |
| 306. |
In the determination of the exchange value of a currency, the first currency of a currency pair is called _ . |
| A. | Price currency |
| B. | Hard currency |
| C. | Base currency |
| D. | bitcoin |
| Answer» C. Base currency | |
| 307. |
The currency used for international transactions irrespective of the importing or exporting country’s currency is called _ . |
| A. | Soft currency |
| B. | Bitcoin |
| C. | Vehicle currency |
| D. | value currency |
| Answer» C. Vehicle currency | |
| 308. |
Pick out the feature which is not true of the foreign exchange market. |
| A. | It is open 24 hours a day |
| B. | Not one single entity can control the market |
| C. | Huge market |
| D. | It has limited geographical dispersion |
| Answer» C. Huge market | |
| 309. |
_ enables an investor to earn high returns while minimizing capital risks. |
| A. | Liquidity |
| B. | Reserves |
| C. | Returns |
| D. | Leverage |
| Answer» D. Leverage | |
| 310. |
Trading in foreign exchange has become fast and simple due to _ . |
| A. | Simple procedures |
| B. | Geographical proximity |
| C. | Improved technology |
| D. | Bullet trains |
| Answer» B. Geographical proximity | |
| 311. |
Pick out the feature which is not true of the foreign exchange market. |
| A. | Huge trading volumes |
| B. | Operates throughout the week |
| C. | Presence of a risk element |
| D. | Leverage enables to make profit |
| Answer» B. Operates throughout the week | |
| 312. |
The provision of foreign bills of exchange in international payments in an example of _ . |
| A. | Transfer function |
| B. | Credit function |
| C. | Speculation |
| D. | None of the above |
| Answer» C. Speculation | |
| 313. |
Transaction where the exchange of currencies take place on the same date is known as |
| A. | swap transaction |
| B. | ready transaction |
| C. | spot transaction |
| D. | value tomorrow |
| Answer» B. ready transaction | |
| 314. |
Transaction in which exchange of currencies take place at a specified future date, subsequent to spot date is known as, |
| A. | swap transaction |
| B. | forward transaction |
| C. | future transaction |
| D. | non-deliverable forwards |
| Answer» B. forward transaction | |
| 315. |
Transaction in which currencies to be exchanged the next day of the transaction is known as |
| A. | value today |
| B. | ready transaction |
| C. | spot transaction |
| D. | value tomorrow |
| Answer» D. value tomorrow | |
| 316. |
According to the Purchasing Power Parity theory, the rate of exchange between the currencies of two countries is determined by_ |
| A. | their relative price levels |
| B. | their import and export volumes |
| C. | their import and export values |
| D. | their relative capital movements |
| Answer» A. their relative price levels | |
| 317. |
Which of the following is not an assumption of the Purchasing Power Parity theory? _ |
| A. | There are no trade barriers between countries |
| B. | The price index for each of the two countries must be comprised of the same basket of goods |
| C. | All the prices should be indexed to the same year |
| D. | Changes in the exchange rate changes internal price level |
| Answer» D. Changes in the exchange rate changes internal price level | |
| 318. |
Exchange rate between two currencies is based on _ __ |
| A. | purchasing power of two currencies |
| B. | economic development of the two nation |
| C. | political stability in the two countries |
| D. | export - import in two countries |
| Answer» A. purchasing power of two currencies | |
| 319. |
Purchasing Power Parity Theory considers that goods in different countries are _ |
| A. | differential |
| B. | identical |
| C. | superior |
| D. | inferior |
| Answer» B. identical | |
| 320. |
Under IMF, the exchange rate system was _ |
| A. | gold standard |
| B. | currency board system |
| C. | dollarization |
| D. | EURO |
| Answer» A. gold standard | |
| 321. |
Under managed float, the central bank of a nation intervenes to_ _ foreign currency. |
| A. | only purchase |
| B. | only sell |
| C. | purchase and sell |
| D. | auction |
| Answer» A. only purchase | |
| 322. |
Flexible exchange rate system, the exchange rate is determined by _ |
| A. | Market forces |
| B. | Central Bank |
| C. | commercial bank |
| D. | Scheduled Bank |
| Answer» A. Market forces | |
| 323. |
India has adipted _ _ _ Exchange rate system. |
| A. | Fixed |
| B. | Flexible |
| C. | Managed |
| D. | Stable |
| Answer» C. Managed | |
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