McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Master of Business Administration (MBA) .
Chapters
| 251. |
The forward market is especially well-suited to offer hedging protection against |
| A. | translation risk exposure. |
| B. | transactions risk exposure. |
| C. | political risk exposure. |
| D. | taxation. |
| Answer» B. transactions risk exposure. | |
| 252. |
Suppose that the Japanese yen is selling at a forward discount in the forward-exchange market. This implies that most likely |
| A. | this currency has low exchange-rate risk. |
| B. | this currency is gaining strength in relation to the dollar. |
| C. | interest rates are higher in Japan than in the United States. |
| D. | interest rates are declining in Japan. |
| Answer» C. interest rates are higher in Japan than in the United States. | |
| 253. |
Hedging is used by companies to: |
| A. | Decrease the variability of tax paid |
| B. | Decrease the spread between spot and forward market quotes |
| C. | Increase the variability of expected cash flows |
| D. | Decrease the variability of expected cash flows |
| Answer» D. Decrease the variability of expected cash flows | |
| 254. |
Which of the following is true of foreign exchange markets? |
| A. | The futures market is mainly used by hedgers while the forward market is mainly used for speculating. |
| B. | The futures market and the forward market are mainly used for hedging. |
| C. | The futures market is mainly used by speculators while the forward market is mainly used for hedging. |
| D. | The futures market and the forward market are mainly used for speculating. |
| Answer» C. The futures market is mainly used by speculators while the forward market is mainly used for hedging. | |
| 255. |
Exchange rates |
| A. | are always fixed |
| B. | fluctuate to equate the quantity of foreign exchange demanded with the quantity supplied |
| C. | fluctuate to equate imports and exports |
| D. | fluctuate to equate rates of interest in various countries |
| Answer» B. fluctuate to equate the quantity of foreign exchange demanded with the quantity supplied | |
| 256. |
An arbitrageur in foreign exchange is a person who |
| A. | earns illegal profit by manipulating foreign exchange |
| B. | causes differences in exchange rates in different geographic markets |
| C. | simultaneously buys large amounts of a currency in one market and sell it in another market |
| D. | None of the above |
| Answer» C. simultaneously buys large amounts of a currency in one market and sell it in another market | |
| 257. |
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 | |
| 258. |
A floating exchange rate |
| A. | is determined by the national governments involved |
| B. | remains extremely stable over long periods of time |
| C. | is determined by the actions of central banks |
| D. | is allowed to vary according to market forces |
| Answer» D. is allowed to vary according to market forces | |
| 259. |
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 | |
| 260. |
A simultaneous purchase and sale of foreign exchange for two different dates is called |
| A. | currency devalue |
| B. | currency swap |
| C. | currency valuation |
| D. | currency exchange |
| Answer» B. currency swap | |
| 261. |
Investment can be defined. |
| A. | Person’s dedication to purchasing a house or flat |
| B. | Use of capital on assets to receive returns |
| C. | Usage of money on a production process of products and services |
| D. | Net additions made to the nation’s capital stocks |
| Answer» B. Use of capital on assets to receive returns | |
| 262. |
The concept of Financial management is. |
| A. | Profit maximization |
| B. | All features of obtaining and using financial resources for company operations |
| C. | Organization of funds |
| D. | Effective Management of every company |
| Answer» B. All features of obtaining and using financial resources for company operations | |
| 263. |
What is the primary goal of financial management? |
| A. | To minimise the risk |
| B. | To maximise the owner’s wealth |
| C. | To maximise the return |
| D. | To raise profit |
| Answer» B. To maximise the owner’s wealth | |
| 264. |
The finance manager is accountable for. |
| A. | Earning capital assets of the company |
| B. | Effective management of a fund |
| C. | Arrangement of financial resources |
| D. | Proper utilisation of funds |
| Answer» C. Arrangement of financial resources | |
| 265. |
The market value of a share is responsible for. |
| A. | The investment market |
| B. | The government |
| C. | Shareholders |
| D. | The respective companies |
| Answer» A. The investment market | |
| 266. |
The capital budget is associated with. |
| A. | Long terms and short terms assets |
| B. | Fixed assets |
| C. | Long terms assets |
| D. | Short term assets |
| Answer» C. Long terms assets | |
| 267. |
CAPM stands for. |
| A. | Capital asset pricing model. |
| B. | Capital amount printing model. |
| C. | Capital amount pricing model. |
| D. | Capital asset printing model. |
| Answer» A. Capital asset pricing model. | |
| 268. |
What does financial leverage measure? |
| A. | No change with EBIT and EPS |
| B. | The sensibility of EBIT with % change with respect to output |
| C. | The sensibility of EPS with % change in the EBIT level |
| D. | % variation in the level of production |
| Answer» C. The sensibility of EPS with % change in the EBIT level | |
| 269. |
From the below-mentioned items which are financial assets? |
| A. | Machines |
| B. | Bonds |
| C. | Stocks |
| D. | B and C |
| Answer» C. Stocks | |
| 270. |
Trade between two countries can be useful if cost ratios of goods are: |
| A. | Undetermined |
| B. | Decreasing |
| C. | Equal |
| D. | Different |
| Answer» D. Different | |
| 271. |
The term Euro Currency market refers to |
| A. | The international foreign exchange market |
| B. | The market where the borrowing and lending of currencies take place outside the country of issue |
| C. | The countries which have adopted Euro as their currency |
| D. | The market in which Euro is exchanged for other currencies |
| Answer» B. The market where the borrowing and lending of currencies take place outside the country of issue | |
| 272. |
Which of the following theories suggests that firms seek to penetrate new markets over time? |
| A. | Imperfect Market Theory |
| B. | Product cycle theory |
| C. | Theory of Comparative Advantage |
| D. | None of the above |
| Answer» B. Product cycle theory | |
| 273. |
Dumping refers to: |
| A. | Reducing tariffs |
| B. | Sale of goods abroad at low a price, below their cost and price in home market |
| C. | Buying goods at low prices abroad and selling at higher prices locally |
| D. | Expensive goods selling for low prices |
| Answer» B. Sale of goods abroad at low a price, below their cost and price in home market | |
| 274. |
International trade and domestic trade differ because of: |
| A. | Different government policies |
| B. | Immobility of factors |
| C. | Trade restrictions |
| D. | All of the above |
| Answer» D. All of the above | |
| 275. |
The margin for a currency future should be maintained with the clearing house by |
| A. | The seller |
| B. | The buyer |
| C. | Either the buyer or the seller as per the agreement between them |
| D. | Both the buyer and the seller |
| Answer» D. Both the buyer and the seller | |
| 276. |
The following statement with respect to currency option is wrong |
| A. | Foreign currency- Rupee option is available in India |
| B. | An American option can be executed on any day during its currency |
| C. | Put option gives the buyer the right to sell the foreign currency |
| D. | Call option will be used by exporters |
| Answer» D. Call option will be used by exporters | |
| 277. |
Govt. policy about exports and imports is called: |
| A. | Commercial policy |
| B. | Fiscal policy |
| C. | Monetary policy |
| D. | Finance policy |
| Answer» A. Commercial policy | |
| 278. |
Which of the following is international trade: |
| A. | Trade between countries |
| B. | Trade between regions |
| C. | Trade between provinces |
| D. | Both (b) and (c) |
| Answer» A. Trade between countries | |
| 279. |
Market in which currencies buy and sell and their prices settle on is called the |
| A. | International bond market |
| B. | International capital market |
| C. | Foreign exchange market |
| D. | Eurocurrency market |
| Answer» C. Foreign exchange market | |
| 280. |
Purchasing goods from a foreign country is called |
| A. | Import |
| B. | Entrepot |
| C. | Export |
| D. | Re-Export |
| Answer» A. Import | |
| 281. |
Goods imported for the purpose of export is known as |
| A. | Home trade |
| B. | Foreign trade |
| C. | Entrepot |
| D. | Trade |
| Answer» C. Entrepot | |
| 282. |
Agents are appointed by? |
| A. | Manufacturer |
| B. | Wholesaler |
| C. | Retailer |
| D. | Principal |
| Answer» D. Principal | |
| 283. |
Who among these can check the price fluctuations in the market by holding back the goods when prices fall and releasing the goods when prices rise |
| A. | Agent |
| B. | Mercantile agent |
| C. | Wholesaler |
| D. | Retailer |
| Answer» C. Wholesaler | |
| 284. |
These are agents whose function is to bring the buyer and the seller into contact. |
| A. | Commission agent |
| B. | Selling agent |
| C. | Broker |
| D. | Stockist |
| Answer» C. Broker | |
| 285. |
Who among the following appoints the agent |
| A. | Principal |
| B. | Retailer |
| C. | Manufacturer |
| D. | Wholesaler |
| Answer» A. Principal | |
| 286. |
Which among the following is not concerned with Chambers of Commerce & Industry |
| A. | CII |
| B. | FICCI |
| C. | ICICI |
| D. | ASSOCHAM |
| Answer» C. ICICI | |
| 287. |
One example of Small scale Fixed retailers among these is |
| A. | Pedlars |
| B. | General stores |
| C. | Hawkers |
| D. | Cheap Jacks |
| Answer» B. General stores | |
| 288. |
This retail business acts as a universal supplier of a wide variety of products. |
| A. | Multiple shop |
| B. | Mail order Business |
| C. | Tele-shopping |
| D. | Departmental store |
| Answer» D. Departmental store | |
| 289. |
What is the Bill receivable account? |
| A. | Personal Account |
| B. | Machinery Account |
| C. | Real Account |
| D. | Nominal Account |
| Answer» C. Real Account | |
| 290. |
A bill of exchange includes. |
| A. | An order to pay |
| B. | A request to pay |
| C. | A promise to pay |
| D. | All the above |
| Answer» A. An order to pay | |
| 291. |
Which bill is drawn and accepted in the same country? |
| A. | Trade Bill |
| B. | Foreign Bill |
| C. | Inland Bill |
| D. | Accommodation Bill |
| Answer» C. Inland Bill | |
| 292. |
Who draws a bill of exchange? |
| A. | Creditor |
| B. | Debtor |
| C. | Holder |
| D. | None of the above |
| Answer» C. Holder | |
| 293. |
What is the person known as who draws a bill of exchange |
| A. | Drawer |
| B. | Payee |
| C. | Drawee |
| D. | None of the above |
| Answer» A. Drawer | |
| 294. |
What are the three additional days known as that a drawer gives to the drawee for payment |
| A. | Conditional days |
| B. | Additional days |
| C. | Days of grace |
| D. | Days of rebate |
| Answer» C. Days of grace | |
| 295. |
When the drawee signs the bill, it is considered as |
| A. | Accepted |
| B. | Retired |
| C. | Renewed |
| D. | Endorsed |
| Answer» A. Accepted | |
| 296. |
What kind of acceptance is known as when the bill is accepted without any condition? |
| A. | Qualified acceptance |
| B. | Conditional acceptance |
| C. | Blank acceptance |
| D. | General acceptance |
| Answer» D. General acceptance | |
| 297. |
When the bill is noted from the notary public, it is known as? |
| A. | Noting |
| B. | Discounting |
| C. | Accepting |
| D. | None of the above |
| Answer» A. Noting | |
| 298. |
What is retiring a bill under rebate means? |
| A. | Making a payment of the bill before the due date |
| B. | Dishonoring of a bill |
| C. | Making a payment of the bill after the due date |
| D. | All of the above |
| Answer» A. Making a payment of the bill before the due date | |
| 299. |
The most widely used monetary policy tool among these is. |
| A. | Open market operations |
| B. | Issuing of notes |
| C. | Close market operations |
| D. | Discount rate |
| Answer» A. Open market operations | |
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