INT Finance

International Finance
1.
the complete definition of each term is available in INCOTERMS 1990. True
2.
no ratings or guidelines have been prescribed under the liberalized remittance scheme
of USD 25000 on the quality of the investment an individual can make. False
3.
all the receipts whether current or capital are to be channelised through ADs. True
4.
futures are a form of forward contract.
5.
banks appoint custodian in consultation with issuing company to keep custody of all
depository property.
6.
who issues guidelines for direct investments abroad by any Indian? Exchange control
department of RBI
7.
what is the duty of the AD while booking a forward contract? Verify the suitable
documentary evidence, and that the customer is exposed to risk; ensure that a
genuine transaction exists
8.
the soft lending arm of the world bank is: international development association
9.
what are the main features of GDR?: It is a type of straight equity issues which
are issued in offshore markets; it is denominated in US$ and the underlying
shares are denominated in local currency of the issuer; it is a negotiable
instrument which represents publicly traded local currency equity shares
10.
resident individuals in India can acquire foreign bonus shares on the foreign securities
already held by them without prior approval of RBI. True
11.
what is the objective of FEDAI? Laying down terms and conditions of exchange
business
between
customers
and
bankers;
interbank
understanding
for
transacting FOREX business and exchange rates; ensure the profitability of

FOREX business to the banks
12.
what maxim is followed by the FOREX dealer when indirect method of exchange rate
quotation is need? Buy low, sell low
13.
JV means joint venture and WOS means world of security. False
14.
a forward purchase contract was booked with an authorized dealer and subsequently
cancelled. It: can be booked again with another dealer; can be booked again
with the same dealer
15.
what is an irrevocable letter of credit? That which cannot be cancelled or amended

anytime by the issuing bank without notice to beneficiary.
16.
what was the results of the World War in the 20 th century? Unemployment, adverse
balance of payment, liberalization
17.
prior to 1970 the Asian financial market was the worlds most strictly regulated and
under- developed market.
18.
Spot
value today
19.
maxim buy high sell low =
indirect method of rate quotation
20.
odd date
different from spot date
21.
fixed date
1,2,3 months from spot date
22.
futures contracts are traded in cycle of four times annually.
23.
what do you mean by joint venture? Two entities contributing to the capital of a
new entity and sharing profits/losses
24.
how is single currency swap made? Exchange of major currency against the US
dollar
25.
which type of account can be opened in EEFC? Current Account
26.
trade is settled in: the currency of exporters country; Nostro, Vostro or Escrow
accounts
27.
why have futures and options come into existence? To avoid business risk
28.
what is effect of interweaving of national economics? Govt. decisions have stronger

international repercussions
29.
once the application in form ODA is received by the Reserve Bank through an
authorised dealer, Identification number for the particular investment is issued for the
purpose of future reference.
30.
loans and guarantee could be extended to an overseas entity only if there is already
an equity participation by the Indian party in such an entity.
31.
a company can make an investment beyond the stipulated limit after exhausting the
available limit by obtaining a specific permission from reserve bank under a block
allocation. True
32.
the bank of international settlement draws attention to which development? The

consequences of the stabilization of the pound; the extent to which the
consumers in many industrial countries gained greater access to consumer and
mortgage credit; development of flexible exchange rates
33.
proposal under non automatic route
RBI
34.
proposal under normal route
special committee
35.
investment by partnerships not in core activity
36.
investment under automatic route
37.
a borrower from a developing country can borrow from the US market? Only if it has
= form ODI
form ODA
high credit rating and the countrys govt. gives a guarantee for the same
38.
which publication of ICC is used by the bankers for letters of credit? Uniform customs
and practices for documentary credit
39.
SWIFT is an efficient communication system used in FOREX transactions the world

over.
40.
the most significant aspect of global imbalance is: growing deficit in current
account balance of payments of US; large surpluses in external accounts of
other countries
41.
under automatic route a company does not require any approval from the regulatory
authority for setting up a JV/ WOS abroad.
42.
which credits are permitted in EEFC account? Earnings in foreign exchange;

unutilized foreign exchange earlier withdrawn from EEFC
43.
ADR level I, is the final step to enter US equity market. False
44.
the volume of trading of derivatives in the world trade market is growing but it is still
only 5% of the total. False
45.
what are the main features of Export Declaration Form? It contains declaration of
the exporter as to the nature and exact value of goods being exported; it is an
undertaking of the exporter to realise the full export value decided thereon
and repatriate the same; it is an unconditional order signed by maker; it bears
distinct serial numbers with a two alphabet prefix followed by a six digit
number
46.
what do you mean by deferred payment exports? When exports are made but
payment is received in installments at periodic intervals
47.
what are the restrictions on liaison office of a foreign company in India? It is not
allowed to undertake any business activity in India
48.
in a coupon swap, the receiver is the one who receives fixed rate of interest. True
49.
Kandla, Santacruz, Madras, Cochin, Noida are known as Special Export Zones areas.
50.
credit is given to buyer abroad to enable them to import goods on deferred payment
basis is called as: buyers credit
51.
the option period in the forward contract is at the option of the banker, hence the bank
has to be very conservative in quoting rates. False
52.
state the important trends brought out by the 1992 survey. Volume of trading in
derivatives is growing; the share of transactions executed through brokers has
declined to about a third of the total; Euro is the most actively traded currency
in international market followed by US dollar
53.
the standard practices for values are: value today; value tomorrow; value two
business days after the trading date
54.
the document required by the commonwealth countries is the: combined certificate

of origin and value
55.
what are the functions of Export Import Bank of India? finance functions and
development functions
56.
a general permission has been granted in circular 45 (APDIR series) for issuing ADRs
and GDRs. False
57.
name the parties involved in launching GDR? Lead managers, depository,

participants
58.
what are the powers of an AD? Deal in foreign currency, open and maintain
accounts abroad in such currencies; open accounts of non residents, allow
remittance abroad to and from resident Indians
59.
resident individuals in India can acquire foreign bonus shares on the foreign securities
already held by them without proper approval of RBI. True
60.
official documents are otherwise called commercial documents. False
61.
who acts as the trustee in case of import loan through trust receipt? Importer
62.
an Indian company can issue ADR and GDR with RBIs prior permission if it: is eligible
under issue of foreign currency convertible bonds and ordinary shares scheme
1993; is eligible under guidelines issued after 1993, by Govt of India
63.
for the final permission for transfer of a share from a resident to a non resident, which
documents are needed? Foreign inward remittance certificate from the bank;
undertaking that the shares will not be retransferred in favour or a resident; in
principle approval for transfer from RBI
64.
what is the main purpose of export declaration from? To enable RBI to compile vital
foreign trade data of the country and also exercise control over export
activities
65.
operational documents
documents
that
satisfy
the
normal
commercial
requirements of the parties to the transaction

66.
regulatory documents
= documents that satisfy the statutory requirements of any
trade
67.
financial documents
= documents that perform the function of obtaining finance
and collection of payment etc.

68.
risk covering documents = documents that represent the provision against physical
risks to goods in transit
69.
name the rules that governs taking of personal jewellery out of India. Baggage rules
70.
the second most actively traded currency in the world FOREX market is Euro. True
71.
a two way quotation for the currency means that the buyer and seller of the currency
convey the rate acceptable to each other. True
72.
a red clause letter of credit is also called anticipatory letter of credit.
73.
debts swap and assets swaps linked to bonds are arbitrage.
74.
in the syndicated loan arrangement the borrower has to execute: single principle
loan agreement
75.
for technology transfer for Hotel related industry, the basic parameters are: lumpsum
fee for technical and consultancy services up to $200,000
76.
the rate of dividend offered should not exceed: SBI prime lending rate
77.
the source of raising funds for exports are: suppliers credit, forfeiting, buyers
credit
78.
a type of invoice that is required by some specific countries like Philippines, south
America etc, is consular Invoice.
79.
the franchising and marketing fee for Hotel and Tourism related Foreign Technology
transfer is limited to: 3% on gross room sales
80.
FRNs in corporate sector are issued for how many years? Five to seven years
81.
certificate of origin may form a part of invoice itself or may be a separate document.
True
82.
ECGS offers insurance protection to Indian exporters against payment risks. True
83.
for what purpose does RB permit companies engaged in manufacturing and trading
activities abroad to set up branch offices in India? To give professional or
consultancy services; to conduct research work in the area in which the parent
company is engaged; to undertake export and import trading activities
84.
what attributes do the exporter expect from finance? Timely and on liberal terms;
adequate and cheap
85.
a unit located in SEZ may be allowed to open, hold and maintain which account with an
authorized dealer in India? Foreign currency account
86.
a mis-match FRN means: the FRN issued with half yearly interest fixed on
monthly basis
87.
which of these are included in risk covering documents? Insurance cover note; bill
of lading; insurance policy
88.
a method of payment that is beneficial to the seller as he gets payment much before
goods are released from him, is advance payment.
89.
exports on deferred payment credits are eligible for finance and refinance from EXIM
bank. True
90.
what is the effect of interweaving of national economics? Govt. decisions have

stronger international repercussions
91.
FII
= Foreign or non resident investor
92.
RFC
= returning NRI
93.
EEFC = Foreign currency
94.
FCNR = Repatriable
95.
what are the facilities extended by Govt. of India to attract foreign currency to India?
Deposits scheme for NRIs; Inward remittance facilities; liberalized remittance
scheme; RFC schemes
96.
the American banks are allowed to undertake Euro Dollar operation: Indian Banking
Facilities
97.
while transferring a share from a resident to a non resident, whose permission is

needed? RBI
98.
the instruments used in raising funds through arbitrage are: Debt swaps and asset
swaps
99.
a through bill of lading is one that is issued for the entire voyage covering several
modes of transport and trans-shipments. True
100.
postal receipt can sea mail or an airmail receipt depending upon the mode by
which they are sent.
101.
the general permission granted regarding shares to non residents etc include
permission for: issue of shares under ESOP by Indian Cos. To its employees up to
5%
of
paid
up
capital;
acquisition
of
shares
by
non-residents
after
merger/amalgamation; to raise funds in India through issue of ADR

102.
in the automatic route of foreign investment the company can raise capital through
secondary foreign share market also. True
103.
the main features of GDR are: it is a type of equity issues which are issued in
offshore markets; it is dominated in US$ and the underlying shares are
dominated in local currency of the issuer; it is a negotiable instrument which
represent publicly traded local currency equity shares
104.
normally, which risks are covered by ECGC for the exporters? War risk, coup risk,
delays in payments; economic risks, BoP risks, non payment risks; non delivery
risks, political risks
105.
name the activities where FDI is not allowed under the automatic route? Activities
that require an industrial license
106.
in import financing through trust receipts, with whom does the ownership of goods
remain? Importer
107.
the rate of interest on rupee finance is not exceeding 50 basis points over LIBOR. False
108.
under which scheme does EXIM bank give direct credit to importers of capital goods
abroad? Buyers credit; export promotion credit
109.
the participants of FOREX markets are: speculators, arbitragers, foreign investors
110.
what are the various sources of inflow of foreign investment: FDI; External
commercial borrowings; NRI deposits
111.
what do you mean by the trust receipts? A documents executed by importer

against the bank, releasing the import documents covering the imported goods
112.
whose permission is required for issue and transfer of securities to non-residents?

Reserve bank of India; foreign investment board
113.
apart from Reuters, the other major real time financial data providers are Bridge and
Bloombergs.
114.
GDR is a non negotiable instrument. False
115.
name the types of commercial debt market? Derivatives market; bond market
116.
the enclosures to the form submitted to RBI, by Co. investing abroad are: board
resolution, auditors certificate, and valuation report of existing co.
117.
the normal methods of ECBs are: floating rates notes; depository receipt,
commercial papers
118.
financial
management
is
complex
process
for:
companies
which
have
international trade
119.
AD can release foreign exchange upto US$ 25000 for a business trip to any other
country except Nepal and Bhutan.
120.
the foreign exchange unspent after return from foreign trip- in what form it should be
surrendered within 180 days from return? Travellers cheque
121.
to make the export more competitive and remunerative, the Indian Govt. extends Cash
incentives facility.
122.
if exchange rate between US$ and rupees and US$ and pound sterling is given, we can
calculate the rate between sterling pound and Indian rupee by: cross rate
123.
trade is settled in: the currency of the exporters country; the currency of the
importers country
124.
the total financial commitment is permitted upto Indian rupees 150 crores in any one
financial year in respect of direct investment in NEPAL or BHUTAN. True
125.
insurance cover note
= it is an undertaking given by the
126.
export declaration form
= it is a declaration of the exporter
127.
insurance policy
= it is a provisional policy to be
128.
certificate of origin = it is a document indicating a
129.
designated bank means: any bank in India which has been authorised by RBI to
act as a banker to FII
130.
External commercial borrowing means: finance raised by Indian companies from

the subsidiaries for foreign companies within the country OR finance raised by
Indian companies from foreign lenders in foreign currency
131.
what are the important characteristics of bill of exchange? It is an instrument in

writing; it is made payable to a certain person or to his order or bearer; it is an
unconditional order signed by maker
132.
Annexure A of schedule of RBI notification FEMA20/2000 means: list of industries

wherein foreign investment is permitted only up to certain percentage with
locational guidelines OR list of sectors wherein foreign investment is permitted
under automatic route
133.
to whom is import credit against trust receipt granted? Normally to an importer who
holds trustee securities
134.
which organisation has brought out Uniform Customs and documentary practice for
documentary credit? International chamber of commerce Paris OR foreign
exchange dealers association of India
135.
EUROCLEAR, CEDEL are the names of registrars related with the issue of GDR.
136.
Exchange control is to manage demand and supply of home currency by the

government by using direct controls basically to protect it.
137.
post-shipment finance is considered as long term finance. False
138.
which documents are required for availing post shipment finance? Original letter of
credit; bill of lading
139.
name the schemes under which one can set up a joint venture abroad? Automatic
route
140.
how does ICC access Govt. and influence governmental decisions? Through national
committees; through exercise of powers conferred by the chambers of
commerces
141.
proposal for investment abroad by Indian not falling under automatic route are
submitted to Exchange Control Department of RBI. True
142.
the use of credit cards in India by a person resident outside India shall be deemed as
borrowing or lending in rupees. True
143.
the funds raised through external financing can be broadly grouped into: hedging;
fund raising; clean credits
144.
the standard practices for values are: value today, value tomorrow, value two
business days after the trading date
145.
investment in capital abroad, or subscription to the memorandum of association of a

foreign entity is known as: investment in portfolios abroad.
146.
NRO accounts can be opened upto maximum period of one year. False
147.
Grievance should be submitted by a worker to immediate superior.
148.
what are the qualities of a conciliator? Independent; impartial; physically and

psychologically fit
149.
industrial relationship means = relationship between
150.
industrial relations can be seen in a = more sick units than profit
151.
industrial relations means the attitudes and approaches of employers and employees
with regard to = strike and lock outs
152.
the industrial relation in public sector is narrow due to = in excessive political

intervention
153.
gratuity is to be paid if a person has completed 4 years and 11 months and 29 days.
True
154.
a worker who has put in at 240 days of work in a calendar year shall be entitled to the
following leave with wages: one day for every 20 days worked
155.
what are the factors that contributed to the success of collective bargaining in India?
Statutory provisions; voluntary measures; measures taken by the government
156.
each worker has to be given rest after working for: 5 hours
157.
grievances may be = real or false
158.
grievances are connected with = wages, promotion, work
159.
grievance should be submitted to the = immediate superior
160.
grievances are settled = with maximum speed
161.
a tribunal shall consists of one person.
162.
each factory will keep readily available and accessible a well stocked first aid box
during working hours. True
163.
pension able service and salary is determined by the following: contribution to

pension fund; super annuation of 58 years of completion of 20 years; service
pension able salary is determined by average salary of 12 months before
worker leaves
164.
who told the workers that all forms of property and human accomplishment are gifts of
nature and as such they belonged not to any one individual but to the society: Gandhiji
165.
gratuity is not payable if the following events occur: he has not completed 5 year;
he has expired before completing 5 years; he has been dismissed for an act of
moral turpitude
166.
provident fund contribution was applicable to employees following how many days in
service: 60 days
167.
top executives in public sector undertakings are experiencing various problems and
therefore they are incompetent. What are the problems? Appointment for a limited
period; frequent changes in policies; political intervention
168.
employers can eliminate strikes by providing certain needs of the workers. Name them?
Good employer-employee relation; participation by workers in the functions of
the industry; establishment of safety precautions
169.
when was the proposal of need for grievance procedure in any organization, accepted?
1948
170.
what are the principles applied to settle industrial disputes? Minimum use of legal
technicalities; trained personnel to man tribunals and courts; appeals to be
reduced
171.
compensation under the workmens compensation act cannot be assigned, attached or

changed. True
172.
which movement is responsible in coining the term collective bargaining? The second
world war
173.
a factory is a premises where 10 or more persons are working during the last 12
months.
174.
a person recruited for work abroad by a company is also considered to be a worker

under workmens compensation act.
175.
for the purpose of calculating the salary or wage, all the four allowances, viz, ad-hoc,
family, house rent and tiffin are excluded. False
176.
public sector workers are those employees who are working in the companies owned or
managed by the government.
177.
in retrenchment, the employee has to make the following compliance: a notice to be

served on the appropriate government; the last person employed in that
category should be retrenched; it should be published in a newspaper
178.
personnel management mainly deals with executives policies. False
179.
industrial relations is the science of living together for purposes of production.
180.
who constitutes a national tribunal and how many? Only one by the central
government.
181.
Indian laws need a overhauling to suit the changing trend of market, technology and
manpower. False
182.
sec 31A of the payment of bonus act which provides bonus to productivity in lieu of
profit sharing. This section was introduced in 1976.
183.
a lockout is prohibited under which of the following circumstances (in public utility
services): without giving notice to other parties within 6 weeks of lockout;
within 14 days of the date of lockout; before the expiry of the date of the
lockout
184.
Industrial relations is that part of management, which is concerned with the manpower
of the enterprise, whether machine operator, skilled worker or manager. Who wrote
this? Allen Franders
185.
Mr V V Giri was the Union Labour minister in 1953.
186.
Employees contribution of 12% includes pension fund at 8.33% and PF at 3.67%. True
187.
employees have the right to strike but no license to: commit violence.
188.
which of the following fall under the category of technological factors? Techniques of
productions; modernization schemes; rationalization schemes
189.
in which parts of Maharashtra was a loss of 100 crores recorded during the year 1978?
Bombay, Belapur, Pune
190.
industrial relations means relationship between management and workmen. True
191.
the responsibility for maintaining employer discipline should be entrusted to each and
every manager. True
192.
for a strike to be legal, the following conditions should apply: six weeks should have
passed after giving notice to the other party
193.
an aggrieved employee should be given the answer within 48 hours from the
submission of grievance.
194.
what is human relations in industry? To maintain relations between employers

and the working class
195.
newly set up establishments are exempted from the provisions of the payment of bonus
act for a period of 5 years during the infancy period.
196.
a national commission shall consist of one person only to be appointed by the central
government. True
197.
Question
The option which can be exercised on the maturity date and not before it is known as________.
Correct Answer European Option
Question
What are the functions of Asian Development Bank?
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources
raised in world capital market
Question
The integrated treasury branches of commercial banks handle which type of business?
Correct Answer Forex transactions, Derivatives transactions , Mney market and bond market
transactions
Question
Why have futures and options come into existence?
Correct Answer To avoid business risk.
Question
What is the objective of INCOTERMS?
Correct Answer Arrange for transfer of risk from seller to buyer at a convenient place
Question
For issuing a Documentary credit The applicant is required to provide to the issuing bank details
about
Correct Answer The purchase-sales contract, the mode of payment, the tenor of payment , The
documents required, the names of authorities who would issue the documents
Question
In case of International trade, the role of a banker in case of a bill for collection is that of :Correct Answer Routing the documents of transport along with other documents and apply the
proceeds as per instructions
Question
A Documentary credit issued on the strength of another documentary credit is known as ________.
Correct Answer Back to Back credit
Question
The Negotiating bank examines the documents submitted by the seller and makes payment if
they comply the terms and conditions of the LC.
Correct Answer True
Question A Bill of exchange payable 45 days from date of shipment, is a means of ________ from
seller to the buyer.
Correct Answer Credit
Your Answer Credit
Select The Blank
Question The right without the obligation to sell a security is ________.
Correct Answer Put Option
Your Answer Put Option
Multiple Choice Multiple Answer
Question Internationally only those currencies are in demand
Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations
Multiple Choice Single Answer
Question Where does the word derivative originate from?
Correct Answer Mathematics
Your Answer Mathematics
Question What facilities are proposed by Sodhani Committee for NRIs?
Correct Answer Housing Loan to NRI staff of Indian Companies, , NRIs be permitted to invest in
MMMF
Your Answer Housing Loan to NRI staff of Indian Companies, , NRIs be permitted to invest in
MMMF
True/False
Question There is no difference between CIP and CIF contracts except the mode of
transportation.
Correct Answer True
Your Answer True
True/False
Question Cause of increase in cost of public issues Underwriting fees , selling commission
Correct Answer True
Your Answer True
Select The Blank
Question Legalised invoice is also called ________ invoice.
Correct Answer Visaed
Your Answer Visaed
Match The Following
Question Correct Answer
Swap price = Difference in prices of two legs of buying and selling
Euro Market = Market in Euro currencies
Making market = Quoting rate for both buying and selling a currency
Spread = Price difference between bid and offer
Match The Following
Question Correct Answer
Treasury management = Profit making
Arbitraging = Rate disparity
Futures, Options = Hedging instruments
Exchange Rate volatility = Speculation
Question If a dealer of securities is quoting rate as 200-250 then the rate 200 signifies which rate
with reference to him?
Correct Answer Bid rate
Your Answer Bid rate
Question Which document is used for transportation by air, rail, road, marine?
Correct Answer Multimodal transport document , Combined Transport document
Your Answer Multimodal transport document , Combined Transport document
True/False
Question Multimodal transport document is also known as "IntermobileTransport Document"
Correct Answer True
Your Answer True
Select The Blank
Question Global capital market can be understood from the study of ________.
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside
the country
Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the
country
True/False
Question With the advent of futures and Options there is no need for additional instruments of
risk hedging.
Correct Answer False
Your Answer False
Select The Blank
Question Even after liberalisation of exchange controls, the Euro sterling market remained
volatile because of uncertainties in UK and gyrations of sterling against major ________ countries
Correct Answer OECD
Your Answer OECD
True/False
Question Country risk analysis is a futile exercise in the background of cost of analysis.
Correct Answer True
Your Answer True
Select The Blank
Question ________ is the agency of ICC which deals with the maritime crime.
Correct Answer International Maritime Bureau
Your Answer International Maritime Bureau
Question Export finance
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Your Answer Preshipment credit , Post shipment credit , Duty Draw back
Select The Blank
Question When a credit is made to available to additional beneficiary wholly or partly it is called
as ________.
Correct Answer Transferable credit
Your Answer Transferable credit
Question Financial management is complex process for
Correct Answer Companies which have international trade
Your Answer Companies which have international trade
Question What are the main causes of fluctuations in Exchange rates?
Correct Answer Government regulatios, fiscal policies, political instabilities , Market demand and
supply, sentiments
Your Answer Government regulatios, fiscal policies, political instabilities , Market demand and
supply, sentiments
True/False
Question In an interest rate swap if the payment schedules are identical, only diffrence between
the two payments is delivered.
Correct Answer True
Your Answer True
True/False
Question ECGC offers isurance protection to Indian exporters againt payment risks.
Correct Answer True
Your Answer True
Select The Blank
Question The credit which does not constitute a legally binding undertaking between the bank
and the beneficiary is ________.
Correct Answer Revocable Credit
Your Answer Revocable Credit
Question Mr P has exported goods in May 2005 and is expecting payment of Euro 25000 by the
last week of Sept 2005. Give details of the forward contract he can book :Correct Answer He can book a sale contract any time from May 2005 till Mid Sept 2005, for Euro
25000 or less, for maturity last week of Sept.
Your Answer He can book a sale contract any time from May 2005 till Mid Sept 2005, for Euro
25000 or less, for maturity last week of Sept.
Question Which authorities require the documents of International trade?
Correct Answer Customs, Excise, Bank,
Your Answer Ministry of finance
Question The regulations under FEMA are contained in which manual?
Correct Answer Exchange control Manual
Your Answer Exchange control Manual
True/False
Question In the forward rate quotations between two currencies, when one currency is at
discount the other currency is at premium.
Correct Answer True
Your Answer True
Question What is Risk Syndication facility?
Correct Answer Sharing of risk of non payment by supplier
Your Answer Sharing of risk of non payment by supplier
True/False
Question Cross currency forward contract is not meaningful if original contract is in Rupees to
USD
Correct Answer True
Your Answer True
Question What are the sources of raising funds for exports?
Correct Answer Suppliers credit , Forfaiting
Your Answer Suppliers credit , Forfaiting
Question To whom is an AD required to report the cancellation of forward contracts?
Correct Answer No one at all.
Your Answer No one at all.
Select The Blank
Question A Credit can be a confirmed credit only if it is also ________.
Correct Answer An Irrevocable credit
Your Answer An Irrevocable credit
Question Which non financial service does EXIM Bank give to an exporter?
Correct Answer Provide Technical and administrtive support , Planning, promoting and developing
export oriented Industries
Your Answer Provide Technical and administrtive support , Planning, promoting and developing
export oriented Industries
Question Which of these are considered as miscellaneous documents?
Correct Answer Packing list , Weight certificate
Your Answer Packing list , Weight certificate
Question Which general risks are covered by any insurance policy for transit?
Correct Answer Theft, loss , Damage, sea perils, non delivery
Your Answer Theft, loss , Damage, sea perils, non delivery
Question The crisis in global capital market in 2002-04 was due to
Correct Answer Collapse of Enron , Collapse of Argentina's currency board , The war against
terrorism
Your Answer Collapse of Enron , Collapse of Argentina's currency board , The war against
terrorism
Select The Blank
Question
Correct Answer
The option which can be exercised on the

maturity date and not before it is known
as________.
European Option
Your Answer
European Option

Question
Correct Answer
Question
Correct Answer
Question
What are the functions of Asian Development

Bank?
Give Softloans to poorer countries in Asia ,
Give project finance from resources raised in
world capital market
The integrated treasury branches of
commercial banks handle which type of
business?
Forex transactions, Derivatives transactions ,
Mney market and bond market transactions
Correct Answer
Why have futures and options come into

existence?
To avoid business risk.

Question
Correct Answer
Question
Correct Answer
Arrange for transfer of risk from seller to

buyer at a convenient place
For issuing a Documentary credit The
applicant is required to provide to the issuing
bank details about
The purchase-sales contract, the mode of
payment, the tenor of payment , The
documents required, the names of authorities
who would issue the documents
Question
Correct Answer
Select The Blank
Question
Correct Answer
True/False
Question
Correct Answer
Select The Blank
Question
Correct Answer
Select The Blank
Question
Correct Answer
Question
Correct Answer
Question
Correct Answer
Question
Correct Answer
True/False
Question
Correct Answer
True/False
Question
Correct Answer
Select The Blank
Question
In case of International trade, the role of a

banker in case of a bill for collection is that of
:Routing the documents of transport along
with other documents and apply the proceeds
as per instructions
A Documentary credit issued on the strength
of another documentary credit is known as
________.
Back to Back credit
The Negotiating bank examines the
documents submitted by the seller and
makes payment if they comply the terms and
conditions of the LC.
True
A Bill of exchange payable 45 days from date
of shipment, is a means of ________ from
seller to the buyer.
Credit
The right without the obligation to sell a
security is ________.
Put Option
Internationally only those currencies are in
demand
Which are convertible , Which have liquidity
confirmed in Euro market operations
Where does the word derivative originate
from?
Mathematics
What facilities are proposed by Sodhani
Committee for NRIs?
Housing Loan to NRI staff of Indian
Companies, , NRIs be permitted to invest in
MMMF
There is no difference between CIP and CIF
contracts except the mode of transportation.
True
Cause of increase in cost of public issues
Underwriting fees , selling commission
True
Legalised invoice is also called ________
invoice.
Correct Answer
Match The Following
Question
Swap price
Euro Market
Making market
Visaed
Correct Answer
Your Answer
Difference in prices of two legs Difference in prices of two legs

of buying and selling
Market in Euro currencies
Quoting rate for both buying
and selling a currency
Price difference between bid
and offer
Quoting rate for both buying and

selling a currency
Price difference between bid and
offer
Match The Following

Question
Correct Answer
Your Answer
Treasury management
Profit making
Profit making
Arbitraging
Rate disparity
Rate disparity
Futures, Options
Hedging instruments
Hedging instruments
Exchange Rate volatility
Speculation
Speculation
Spread

Question
Correct Answer
Question
Correct Answer
True/False
Question
Correct Answer
Select The Blank
Question
Correct Answer
True/False
Question
Correct Answer
Select The Blank
Question
Correct Answer
True/False
If a dealer of securities is quoting rate as 200250 then the rate 200 signifies which rate
with reference to him?
Bid rate
Which document is used for transportation by
air, rail, road, marine?
Multimodal transport document , Combined
Transport document
Multimodal transport document is also known
as "IntermobileTransport Document"
True
Global capital market can be understood from
the study of ________.
Yen,Euro Dollar, Swiss Francs, USD market,
Govt Borrowings within and outside the
country
With the advent of futures and Options there
is no need for additional instruments of risk
hedging.
False
Even after liberalisation of exchange controls,
the Euro sterling market remained volatile
because of uncertainties in UK and gyrations
of sterling against major ________ countries
OECD
Question
Correct Answer
Select The Blank
Question
Country risk analysis is a futile exercise in the

background of cost of analysis.
True
Correct Answer
________ is the agency of ICC which deals with

the maritime crime.
International Maritime Bureau

Question
Export finance
Correct Answer
Select The Blank
Question
Preshipment credit , Post shipment credit ,

Duty Draw back
Correct Answer
When a credit is made to available to

additional beneficiary wholly or partly it is
called as ________.
Transferable credit

Question
Financial management is complex process for
Correct Answer
Companies which have international trade

Question
Correct Answer
True/False
Question
Correct Answer
True/False
Question
Correct Answer
Select The Blank
Question
Correct Answer
Question
Correct Answer
Question
Correct Answer
What are the main causes of fluctuations in

Exchange rates?
Government regulatios, fiscal policies,
political instabilities , Market demand and
supply, sentiments
In an interest rate swap if the payment
schedules are identical, only diffrence
between the two payments is delivered.
True
ECGC offers isurance protection to Indian
exporters againt payment risks.
True
The credit which does not constitute a legally
binding undertaking between the bank and
the beneficiary is ________.
Revocable Credit
Mr P has exported goods in May 2005 and is
expecting payment of Euro 25000 by the last
week of Sept 2005. Give details of the
forward contract he can book :He can book a sale contract any time from
May 2005 till Mid Sept 2005, for Euro 25000
or less, for maturity last week of Sept.
Which authorities require the documents of
International trade?
Customs, Excise, Bank,
Question
Correct Answer
True/False
Question
The regulations under FEMA are contained in

which manual?
Exchange control Manual
Correct Answer
In the forward rate quotations between two

currencies, when one currency is at discount
the other currency is at premium.
True

Question
What is Risk Syndication facility?
Correct Answer
Sharing of risk of non payment by supplier
True/False
Question
Correct Answer
Question
Correct Answer
Question
Correct Answer
Select The Blank
Question
Correct Answer
Question
Correct Answer
Question
Correct Answer
Question
Correct Answer
Question
Correct Answer
Cross currency forward contract is not

meaningful if original contract is in Rupees to
USD
True
What are the sources of raising funds for
exports?
Suppliers credit , Forfaiting
To whom is an AD required to report the
cancellation of forward contracts?
No one at all.
A Credit can be a confirmed credit only if it is
also ________.
An Irrevocable credit
Which non financial service does EXIM Bank
give to an exporter?
Provide Technical and administrtive support ,
Planning, promoting and developing export
oriented Industries
Which of these are considered as
miscellaneous documents?
Packing list , Weight certificate
Which general risks are covered by any
insurance policy for transit?
Theft, loss , Damage, sea perils, non delivery
The crisis in global capital market in 2002-04
was due to
Collapse of Enron , Collapse of Argentina's
currency board , The war against terrorism
MATCH
Intolerable risk
Country risk analysis
Stock market analysis
Weightages %
Drop the investment project

Cost of evluation does not justify analysis
Banks are ahead
Factors' values
2
Investment under Automatic route
Proposal under non automatic route
Proposal under Normal route
Investment by partnerships not in core
activity
Form ODA
rBI
Special Committee
form ODI
3
Maturity of future
Note issuance facility
Bearer security issued in currency other than
that of the country of issue
Margin on future
4
Departure
Main carriage paid
Main carriage unpaid
Arrival
5
Issues linked with LIBOR,LIBID,LIMEAN
Issue of bonds without fixed rate of interest,
linked to short term interest rate in the global
market
Issue of loans internationally,through
arranger, underwriter,co manager, for a large
amount for sharing risk of lending
Equity issues in the foreign markets either as
direct investments or portfolio investments.
6
LastStage
The First stage in the Europeand and
Monetary Union (EMU)
Stage II in EMU
Stage III in EMU
7
Cancellation of contracts above USD 500000
Forward Purchase contract currency at
premium
Forward purchase contract currency at
discount
Exchange margins
8
Bond basis to money market basis
3 months LIBOR +2 % PA
Time when actual commodity is delivered

Euronotes
Eurobonds
Peformance bond or security deposit
EXW
CFR
FAS
DES
FRNs
FloatingRate Note
Syndicated Loans
American or Global Depository Receipts
Form a single currency

Free movement of capital in EC
Establishment of European Monetary Institute
Members to meet the convergence criteria
and fix the exchange rates
ECD
Presume earliest delivery
Presume latest delivery
FED
Bond basisx 360/365
Floating rate
15% P.A.
Money market basis to bond basis
Fixed rate
Money market basis x 365/360
9
European option
Out of money
In the money
American option
On or after maturity
Loss
Profit
Before maturity
10
Euro as a currency note/coin
IBRD
Collapse of IMF administered fixed exchange
rates
No International control on Exchange rates
11
Swap price
2002
World Bank
Early 1970s
Mid 80s
Spread
Difference in prices of two legs of buying and

selling
Quoting rate for both buying and selling a
currency
Price difference between bid and offer
12
Treasury management
Arbitraging
Futures, Options
Profit making
Rate disparity
Hedging instruments
Speculation
Euro Market
Making market
13
Exchange margins
Forward Purchase contract currency at
premium
Forward purchase contract currency at
discount
14
Certifiate of Origin
PP Form
Health Certificate
Certificate of Inspection
FED
ECD
Export Promotion Council

Export Declaration form
Fumigation certificate
As per importers requirement
15
Netherlands
Guilder
Germany
Mark
Ireland
Punt
Luxemberg
Franc
Question
Tranche' is a managed issue of securities in smaller denominations.
Correct Answer
True
Question Which debits are permitted to EEFC accounts?
Correct Answer
Payment of hotel bills abroad, payment for expenses on Heart operation
abroad , Payment to EOUs in India for services rendered by them
Question
What schemes have been floated by RBI for facilitating Inter bank transactions?
Correct Answer
Clearing house for settlement and clearance for the operations of Ads , Set
up a market intelligence cell to study and monitor developments in Forex Market
Question The creditworthiness of futures exchange is maintained through imposition of
________.
Correct Answer
Margin
Question After the second world war many countries adopted the route of ________ to give
facelift to sagging economies.
Correct Answer
Devaluation of their currencies
Question FEDAI does not require RBI permission to frame and revise rules of business
Correct Answer
False
Question Position in a currency is said to be ________, when sales equal purchases.
Correct Answer
Square
Question Underwriters are more attracted to NIF issue because of :Correct Answer
Lesser risks , Increased returns , Easy marketability features
Question Import finance is nomally available at rates of interest cheaper than domestic
finance rates.
Correct Answer
False
Question What is the Indian Govt's obligation of becoming member of IMF?
Correct Answer
Ensure orderly exchange arrangement, promote stable exchange rate
Correct Answer
Preshipment credit , Post shipment credit , Duty Draw back
Question ________ enables bankers to extend purchase, negotiation or discount of export
bills.
Correct Answer
Post shipment credit guarantee
Match the following
Question
Correct Answer
Intolerable risk
Banks are ahead
Weightages %
Factors' values
Question In mid 1992 ________ rejected the ratification of Maastricht treaty
Correct Answer
Denmark
Question Name the services provided by 'Reuter 3000' in forex market:Correct Answer
Quotation of forex rates, interest rates , Electronic broking by matching
the rates
Question What options does the merchant have while booking a forward contract?
Correct Answer
Delivery on a Fixed date, within six months , Delivery on a date between
two days separated by a period of maximum one month
Question What is the volume of the world's total speculative transactions?
Correct Answer
Roughly 90 % of the total turnover
Correct Answer
True
Question
CFR = FOB plus freight paid by seller + insurance paid by seller.
Correct Answer
False
Question Sterling Market is attractive for an international investor because

Correct Answer
Gilts offer higher attractive margin , Choice of issuing medium term and
long term bonds
Question In a documentary credit the word document means :Correct Answer
Specified documents of title, transportation, insurance , Specified
certificates, and other papers required as per the regulations in the buyers country
Question What is the meaning of right to buy or sell the future contract?
Correct Answer
An Option
Question ECGC provides cover to an Indian contractor for construction work abroad under
________.
Correct Answer
Construction works policy
Question An Indian importing goods from USA pays dollars in India.
Correct Answer
False
Question An Indian exporting goods to New York receives dollars in New York.
Correct Answer
True
Question A Dealer bought USD at 47.5000, in morning and the USD is quoted in the noon
at 1 USD =48.2000/49.7000, then he has the opportunity for ________.
Correct Answer
Arbitrage
Question The Direct Investment abroad through share swap arrangement under normal
route is permitted in a :Correct Answer
JV/WOS
Question In US Capital Market a Company prepares all the necessary documents in
advance of the public issue under the facility known as ________.
Correct Answer
Shelf Registration
Question How many Countries participated in the third survey on Foreign Exchange,
coordinated by BIS in 1992?
Correct Answer
26
Question A Spot Transaction between Japanese Yen and Sterling carried out on Friday in
Singapore, the settlement day will be
Correct Answer
Following Tuesday if it is a working day in all the three centers
Correct Answer
Visaed
Question Who are the members of the Special committee on Indian Direct Investments
abroad, for normal route?
Correct Answer
Representatives of Ministry of finance, Ministry of Economic affairs,
Ministry of Commerce and RBI
Question For opening JV/WOS in Nepal, Bhutan, the ceiling for financial commitment per
annum is ________.
Correct Answer
Rs. 350 crore
Question The price at which a person may purchase or sell the underlying ________.
Correct Answer
Exercise or strike price
Question Installment credit is issued for specific quantities of goods to be shipped every
week or month.
Correct Answer
True
Question The participants in the Forex Markets are :Correct Answer
Non banking entities wishing to exchange currencies, , Banks and their
clients , Speculators, arbitragers
Question What were the primary objectives of the group of seven countries?
Correct Answer
Bring down the external value of US Dollar , Bring some stability to
exchange rates of all the countries
Question Transfer of funds for investment abroad is allowed freely.
Correct Answer
True
Question In which currency can the EEFC account be opened?
Correct Answer
Any Convertible currency
Question In International trade, Advance payment means :Correct Answer
Providing up front cash
Question Who books an option forward contract?
Correct Answer
Party who is not definite about crystallisation of delivery date
Question What is a "Received for shipment" bill of lading ?
Correct Answer
It is not considered by the banks as a good security for financing.
Question What are margins, with reference to futures market?
Correct Answer
Faith money deposited by buyers and sellers ensures liquidity , Margin
ensures solvency for honouring contracts
Question How does ICC access Govt and influence Governmental decisions?
Correct Answer
Through national committees
Match the following:
Question
Correct Answer
Investment under Automatic route
Form ODA
Proposal under non automatic route
RBI
Proposal under Normal route
Special Committee
Investment by partnerships not in core activity
form ODI
Question
The characteristics of an International documentary credit are :Correct Answer
It is an undertaking given by the openers bank to pay certain sum of
money , It is an undertaking given on behalf of a certain person to another person in different
country
Question Services of a Paying bank are taken when currencies of exporters country or the
importers country is not involved in the transaction.
Correct Answer
False
Question
What schemes have been floated by RBI for facilitating Inter bank transactions?
Correct Answer
Question ________ is the agency of ICC which deals with the maritime crime.
Correct Answer
Question Which of them are special funding facilities of IMF ?
Correct Answer
Buffer Stock Facility
Question Cross currency forward contract is not meaningful if original contract is in Rupees
to USD
Correct Answer
True
Question What does a speculator accept while dealing with an option?
Correct Answer
The exercise or strike price, the amount , The expiration date and time,
the method of payment
Question Which is the most actively traded currency in the international market today?
Correct Answer
US Dollar
Question
Intolerable risk
Weightages %
Correct Answer
Banks are ahead
Factors' values
Question
Global capital market can be understood from the study of ________.
Correct Answer
Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and
outside the country
Question
For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer
Monday
Question Under which category of exchange rate did the Indian Rupee came from June 92?
Correct Answer
Other managed Floating
Question
Correct Answer
Maturity of future Time when actual commodity is delivered
Euronotes
Bearer security issued in currency other than that of the country of issue
Margin on future
Eurobonds
Question
Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable
instrument.
Correct Answer
False
Question The Prominent non banking financial institutions participating in the FOREX
markets are Pension funds, mutual funds, insurance Cos.
Correct Answer
True
Correct Answer
Question What is the volume of the world's average daily transactions in foreign
exchange?
Correct Answer
USD 1 trillion
Question NIF is basically an agreement :Correct Answer
By underwriting bank to support funding for a certain period, against
which borrowers can issue short term papers
Question What was the official foreign currency reserve of the group of seven central
Banks taken togeather in mid 1992?
Correct Answer
USD 275 Billion
Question What Preshipment facility is granted by EXIM Bank to an exporter?
Correct Answer
Preshipment credit beyond six months for construction and turnkey
projects abroad
Question Over the years ________has been the most widely accepted currency in
international capital market.
Correct Answer
American Dollar
Question As a result of the world wars in the 20th century the ________ of most of the
countries suffered heavily.
Correct Answer
Economies
Question Which currency is traded in one leg of about 70% of the world's transactions?
Correct Answer
US Dollar
Question ________ is the acid test for events to be included in country risk.
Correct Answer
Control by Government'
Question The Trans European Automated Real Time Gross Settlement Express Transfer is
popular in ________.
Correct Answer
Brussels
Correct Answer
Question If ERD > IRD hen exporter should availa Rupee finance
Correct Answer
True
Question The characteristics of an International documentary credit are :Correct Answer
country
Correct Answer
Question Funding Options in domestic yen market are Futures, FRAs, Call and put options.
Correct Answer
True
transportation.
Correct Answer
True
Correct Answer
Question When an Indian Company earns at least 50% of its average turnover from a
particular activity then that activity is considered as ________.
Correct Answer
Core activity
Correct Answer
Question The volume of trading of Derivatives in the world trade market is growing but still
only 5% of the total.
Correct Answer
False
Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050.
Which is the offered rate for Rs?
Correct Answer
USD 1=Rs 50.5000
Correct Answer
Correct Answer
Which are convertible , Which have liquidity confirmed in Euro market
operations
Question What are the functions of Asian Development Bank?
Correct Answer
Give Softloans to poorer countries in Asia , Give project finance from
resources raised in world capital market
Question What does the word '"Tombstone" stand for?
Correct Answer
Advertisement which lists the managers, underwriters, , List of Providers of
recently floated issue
Question Short term instruments normally issued by corporate borrowers, forhigh values,
at a discount to face value are known as ________.
Correct Answer
Euro Commercial Papers
Question Why are various methods of financial analysis used for assessing a cross border
project ?
Correct Answer
To weed out unviable projects and rank profitable ones
Question Examples of hedge are:
Correct Answer
Buy when you are having short position
Question What is the effect of cross currency option on the customer?
Correct Answer
He gets the flexibility to exposure , He is exposed to additional risk of
movement of rates between 3 currencies
Question Forward margin makes a currency cheaper then the currency is at ________.
Correct Answer
Discount
Question Why does a person need protection from unfavourable movement of exchange
rate?
Correct Answer
Unfavourable fluctuations in exchange rate can wipe out the normal
business profit
Question The capital market is said to be volatile when
Correct Answer
Prices of capital market instruments change and are expected to change
drastically
Question JV means Joint venture and WOS means World of Security.
Correct Answer
False
Question What is the criteria for an Indian Company for Direct Investment abroad?
Correct Answer
Activity proposed need to be core activity , Financial commitment in
JV/WOS maximum $ 100 million or equivalent
Question
Integrated branches of Commercial banks handle forex transactions as well as
options, swaps, futures, arbitrage operations
Correct Answer
True
Correct Answer
False
Question The rate of interest on rupee finance for exports is not exceeding ________ less
than PLR.
Correct Answer
0.025
Correct Answer
Question In the syndicated loan arrangement the borrower has to execute :Correct Answer
Single Principal loan agreement
Question At Least one principal Lender bank is essential for issue of the ADR or GDR.
Correct Answer
False
Question US financial system is the freest system because
Correct Answer
Institutions can introduce new products and instuments at the price of
their choice.
Question In a coupon swap who is called the buyer?
Correct Answer
One who pays the fixed rate of interest
Question Till August 1994 India was following the Indirect Methodof Rate quotation.
Correct Answer
False
Question For setting up joint ventures abroad or equity participation abroad, EXIM bank
provides funds under ________ Scheme.
Correct Answer
Overseas investment facility
Question Under the automatic route of Direct Investment Abroad, what is the restriction on
market purchases?
Correct Answer
50% of the net worth of the investing company
Question What are the powers of money changers?
Correct Answer
Purchase and sell foreign currency notes and travellers cheques
Question Any company involved in foreign exchange transactions is exposed to ________
risk.
Correct Answer
Currency
Question What are the features of Settlement price ?
Correct Answer
Price established by the clearing house at the end of each trading session ,
It is used to determine the net gain, loss, margin call and next days price limits
Question What are the activities of ICC?
Correct Answer
Aribtration and dispute resolving , Canvass for open trade combat
commercial crime
Correct Answer
True
Question
The currency swaps used ________.
Correct Answer
To lower the risk of currency exposure
Question The Option period in the forward contract is at the option of the Banker, hence
the bank has to be very conservative in quoting rates.
Correct Answer
False
Question Which factors affect the exchange rates in short time period?
Correct Answer
Demand and supply, interest rates, inflation, , Sentiment, Speculation
Question
Correct Answer
Departure
EXW
Main carriage paid CFR
Main carriage unpaid
FAS
ArrivalDES
DES
Question
Sterling Market is attractive for an international investor because
Correct Answer
long term bonds
Question In red clause credit some clauses are printed in Red ink.
Correct Answer
True
Correct Answer
Which is the bid rate for USD?
Correct Answer
USD 1=Rs 50.5000
project ?
Correct Answer
Question Criteria for investment abroad under automatic route :Correct Answer
Activity for investment is core activity of Indian Company. , Total Financial
commitment in JV/WOS as per prescribed ceiling
Question Who can issue the Certificate of Inspection?
Correct Answer
Export Inspection Council , Person authorised by Importer.
Question Large number of exporters from which country are enjoying the privilege of
receiving up front cash from importers in Russia?
Correct Answer
United Kingdom
Question In developed markets, speculators play important role in determining the trend
of currency rates.
Correct Answer
True
Question In US Capital Market a Company prepares all the necessary documents in
advance of the public issue under the facility known as ________.
Correct Answer
Shelf Registration
Question In Overseas market the forward rate is generally quoted on the basis of ________.
Correct Answer
Fixed date
Question Forward Margin makes a currency costlier then the currency is at ________.
Correct Answer
Premium
Question These are the parties to the documentary credit :Correct Answer
Negotiating Bank, advising bank , Reimbursing bank, Confirming bank
Correct Answer
Question Fixed, Floating or Limited flexibility are used in the context of
Correct Answer
Exchange Rates
Correct Answer
Denmark
Question Under the liberalisation through FEMA, what can an AD offer to the clients,
without the prior permission of RBI or Government?
Correct Answer
Hedges, interest rate swaps, currency swaps. , Caps and collars, and
forward rate agreements
Correct Answer
No one at all.
________.
Correct Answer
Question The Negotiating bank examines the documents submitted by the seller and
makes payment if they comply the terms and conditions of the LC.
Correct Answer
True
Correct Answer
USD 275 Billion
Correct Answer
Question Forward margin makes a currency cheaper then the currency is at ________.
Correct Answer
Discount
Question Name the common forex derivatives :Correct Answer
Options, futures
Correct Answer
True
volatile because of uncertainties in UK and gyrations of sterling against major ________
countries
Correct Answer
OECD
Question
Correct Answer
Issues linked with LIBOR,LIBID,LIMEAN =
FRNs
Issue of bonds without fixed rate of interest, linked to short term interest rate in the global
market
=
FloatingRate Note
Issue of loans internationally,through arranger, underwriter,co manager, for a large amount
for sharing risk of lending =
Syndicated Loans
Equity issues in the foreign markets either as direct investments or portfolio investments =
Question
Proforma Invoice, Commercial Invoice, Consaular Invoice are which type of
documents?
Correct Answer
Commercial Documents
Question Charter party bills of lading are generally not acceptable to bankers as security
because Sea Charters are full of problems.
Correct Answer
True
Question Why does a Transaction exposure arise?
Correct Answer
Trading flows , Dividend or capital flows
Question If a dealer of securities is quoting rate as 200-250 then the rate 200 signifies
which rate with reference to him?
Correct Answer
Bid rate
Question A Documentary credit issued on the strength of another documentary credit is
known as ________.
Correct Answer
Back to Back credit
Correct Answer
operations
Question Tranche' is a managed issue of securities in smaller denominations.
Correct Answer
True
Correct Answer
True
Correct Answer
outside the country
Question Which events can lead to materialisation of country risk?
Correct Answer
Change in Government policies , Change in Government rules and laws
Question What is a 'speculator'?
Correct Answer
Trader who is neither hedger nor arbitragor , He takes risks for profit
Question The major industrial power whose economy was not affected after the II world
war was ________.
Correct Answer
USA
Correct Answer
Advertisement which lists the managers, underwriters, , List of Providers of
Question What do you understand by Commercial Risk?
Correct Answer
Protracted default by the buyer , Insolvency of the buyer
Correct Answer
Visaed
Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer
Monday
Question The American Dollar market comprises of the domestic segment of USD the
offshore segment of USD.
Correct Answer
True
Question
Correct Answer
LastStage
Form a single currency
The First stage in the
Europeand and Monetary Union (EMU)
Stage II in EMU
Establishment of European Monetary Institute
Stage III in EMU
Members to meet the convergence criteria and fix the exchange
rates
Question Under the ________ standard the Country's Central Bank promised to buy back
the currency at certain rate of Gold.
Correct Answer
Gold
Correct Answer
True
Question The factors which affect the performance of an option are:Correct Answer
Underlying asset price , Time before expiration, rate of interest
Question Which contracts are used for transportation by road?
Correct Answer
FCA , CPT
Question Bid rate is bidders buying rate and offered rate is bidders selling rate.
Correct Answer
True
Question
Correct Answer
ECD
Forward Purchase contract currency at premium
Forward purchase contract currency at discount
Presume latest delivery Presume latest
delivery
Exchange margins
FEDAI
Question
Under which category of exchange rate did the Indian Rupee came from June 92?
Correct Answer
Question Which two countries were included to convert the group of five into the group of
seven?
Correct Answer
Italy , Canada
Question Who can open an EEFC account?
Correct Answer
Individuals , firms, companies, resident in India
Question Method of advance payment is not disadvantageous to :Correct Answer
The seller
Question What is the immediate cause for the growth of futures and options in the last two
decades?
Correct Answer
Increase in volatile trading conditions
Question What do you mean by a derivative?
Correct Answer
One which has been derived from other fundamental instruments
Question
"Currency Snake"
Correct Answer
Plus or minus movement of exchange rate around the parity rate
Question Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable

instrument.
Correct Answer
False
Question In which currency can the EEFC account be opened?
Correct Answer
Any Convertible currency
Question Criteria for Direct investment abroad under normal route :Correct Answer
Viability of the proposal, and excellent track record of business ,
Experience and expertise of promoters, benefit to the country
Question ________ enables bankers to extend purchase, negotiation or discount of export
bills.
Correct Answer
Post shipment credit guarantee
Question For setting up a joint venture or WOS abroad, Indian banks operating in India
need a clearance :Correct Answer
Under Banking Regulation Act
Correct Answer
Question Indian companies are now allowed to freely invest abroad up to $1.5 million,
raised through GDE or EEFC without prior permission from RBI.
Correct Answer
False
Correct Answer
American Dollar
Question Terms in an Irrevocable credit can not be alterred at all.
Correct Answer
False
Correct Answer
Square
Question How is the entry into any conuntry's money market or capital market is
restricted?
Correct Answer
Because of different tax systems , Because of different credit standards
Question The currency notes and coins of individual countries participating in "Euro" have
ceased to be a legal tender from ________.
Correct Answer
2002
Question Partnership firm not eligible for Overseas Direct Investment needs to apply to RBI
Approval in form ________.
Correct Answer
ODI
Question Where does the word derivative originate from?
Correct Answer
Mathematics
Question To make the export more competitive and remunerative, the Indian Govt extends
________ facility.
Correct Answer
Cash Incentives
Question
The financial system of any country consists of
Correct Answer
NBFCs, etc
Network of commercial banks, domestic and foreign investment banks,
Question
Association of several scheduled commercial banks for forex business is ________.
Correct Answer
Foreign Exchange Dealers Association of India
week or month.
Correct Answer
True
Question Combined Certificate of Origin and Value are required by ________.
Correct Answer
Commonwealth Countries
Question The creditworthiness of the futures seller and the futures buyer is ________
because of the presence of the Futures exchange.
Correct Answer
Irrelevant
Question When interest rate changes by 0.05 per cent then it has changed ________ basis
points.
Correct Answer
50
Question What were the primary objectives of the group of seven countries?
Correct Answer
Bring down the external value of US Dollar , Bring some stability to
exchange rates of all the countries
Correct Answer
Collapse of Enron , Collapse of Argentina's currency board , The war
against terrorism
Question Mr A sells an option conferring the right to buy a kilogram of silver at Rs 8000/for next six months means :Correct Answer
The buyer of option can buy silver from Mr A at 8000/- per Kg, in next 6
months, even if the price goes up, , The buyer of option can sell silver to Mr A at 8000/- per
Kg, in next 6 months, even if the price goes down.
Question Major investors in NIF are :Correct Answer
Commercial Banks , Non banking Finance companies , Insurance
Companies
Question With the advent of futures and Options there is no need for additional
instruments of risk hedging.
Correct Answer
False
Question During the fixed rate exchange system prevailing in India, the intervention
currency was ________.
Correct Answer
Sterling Pound
Question What help does EXIM Bank provide under the scheme 'Direct Financial assistance
to exporters'?
Correct Answer
Funds are provided under deferred payment terms to Indian exporter for
credit to foreign buyer
Question What is a bill of lading?
Correct Answer
Transport document representing movement of goods by water.
Question Which controls are not permitted by IMF?
Correct Answer
Current account controls
Question What are the objectives of International Chamber of Commerce?
Correct Answer
Champion the global economy as a force of economic growth , Creating of
job and prosperity
Question Yankee bond is issued for domestic borrowers.
Correct Answer
False
Question What schemes have been floated by RBI for facilitating Inter bank transactions?
Correct Answer
Question An AD can book a forward contract for a part of the amount of Sale Contract
Correct Answer
True
Question Sterling FRNs are issued in Europe, USA ,Asia
Correct Answer
False
Question
Correct Answer
Bond basis to money market basis
Bond basisx 360/365
3 months LIBOR +2 % PA
Floating rate
15% P.A.
Fixed rate
Money market basis to bond basis
Money market basis x 365/360
Question
In Indian interbank market forward rates are generally quoted on the basis of
________.
Correct Answer
Calendar month
Question In case of syndication of loans the amount of loan and currency is finalised by :Correct Answer
Borrower
Question European currency Unit
Correct Answer
Basket of Currencies of members of EMS
Question The counter party in option is ________.
Correct Answer
The exchange
Correct Answer
Question EEFC account holder is allowed to have ________ facility.
Correct Answer
Cheque book and nomination
Question A Usance bill of exchange may be drawn in 2 ways. Which are they?
Correct Answer
Documents against payment , Documents against acceptance
Question Why have futures and options come into existence?
Correct Answer
Question In an interest rate swap if the payment schedules are identical, only diffrence
Correct Answer
True
Question What are the main causes of fluctuations in Exchange rates?
Correct Answer
Market demand and supply, sentiments , Government regulatios, fiscal
policies, political instabilities
Question What do you understand by a swap?
Correct Answer
2 counter parties agree to exchange streams of payments over a period of
time
finance rates.
Correct Answer
False
Question A weight list, a packing list used in international trade are which type of
documents?
Correct Answer
Operational Documents
Question What do you understand by 'Foreign Exchange Risk'?
Correct Answer
The change in value of currency alters the home currency value of an
asset , liability, , The change in value of currency alters the home currency value of profit,
loss, or future cash flows
Correct Answer
projects abroad
Question Which Indian Co. is not eligible to make investment abroad under automatic
route?
Correct Answer
Co which is caution listed by RBI
Question Naked position is when investor does not hedge against market risk.
Correct Answer
True
Question In DAF, the frontier means :Correct Answer
Frontier of exporter's country , Frontier of importer's country
exchange?
Correct Answer
USD 1 trillion
Question
Correct Answer
European option
Out of money
In the money
American option
Your Answer
Loss Profit
Profit Loss
Before maturity
Before maturity
Correct Answer
Brussels
Question PP Form is required when exports are made to any country by post parcel on
value payable basis.
Correct Answer
False
Correct Answer
Core activity
Correct Answer
26
Question Indian Co. intending to make investment under Automatic route needs to submit
form ________ to RBI with enclosures.
Correct Answer
ODA
Correct Answer
True
Question
A ________ Bill of lading does not specify the terms and conditions of carriage.
Correct Answer
Short Form
Question ________Bill of lading must specify the name of the ship.
Correct Answer
"On Board"
Question
Correct Answer
Euro as a currency note/coin
2002
IBRD
World Bank
Collapse of IMF administered fixed exchange rates Early 1970s
No International control on Exchange rates
Mid 80s
Mid 80s
Question
What are the main causes of fluctuations in Exchange rates?
Correct Answer
Government regulatios, fiscal policies, political instabilities , Market
demand and supply, sentiments
Question The maximum period for which a forward contract can be granted by the AD
depends upon which RBI directives?
Correct Answer
Maximum Period of repatriation of export proceeds , Maximum Period of
payment for Imports
Question What is the objective of INCOTERMS?
Correct Answer
Arrange for transfer of risk from seller to buyer at a convenient place
Question
Correct Answer
Forfaiting
Discounting export receivables
Buyer's Credit
Available to Buyer abroad
Seller's Credit
Available to seller abroad
Usance LC
Seller paid only on maturity date
Question
Which debits are permitted to EEFC accounts?
Correct Answer
Correct Answer
True
Question Which two countries were included to convert the group of five into the group of
seven?
Correct Answer
Canada , Italy
Question Revolving underwriting facility, short term note issuance facilty, transferabla
revolving undertaking facility are the names of :Correct Answer
Correct Answer
Question How does ICC help poor countries?
Correct Answer
Attract Foreign Direct investments togeather with UNCTAD
Question What were the immediate causes of converting the group of 5 into group of 7
and convene their meeting in late 1985?
Correct Answer
Many Industries in USA had become uncompetitive with imports , In USA
the Trade protectionnism had increased
Correct Answer
True
Correct Answer
Square
Question What is Sovereign Risk?
Correct Answer
Risk of lending to the government of a country
Correct Answer
False
week or month.
Correct Answer
True
Question What is the effect of cross currency option on the customer?
Correct Answer
He gets the flexibility to exposure , He is exposed to additional risk of
movement of rates between 3 currencies
Question In developed markets, speculators play important role in determining the trend
of currency rates.
Correct Answer
True
Correct Answer
USD 275 Billion
Correct Answer
Question In a coupon swap the receiver is the one who receives fixed rate of interest.
Correct Answer
True
Correct Answer
Question With reference to ECB, fund raising activity includes :Correct Answer
Floating rate notes, bonds, debentures , Syndicate loans, issue of shares
Question A Dealer Buys commodity in Bombay and sells it in Delhi due to price
differentials. He is said to be resorting to which practice?
Correct Answer
Arbitrage
Question Name the services provided by 'Reuter 3000' in forex market:Correct Answer
Quotation of forex rates, interest rates , Electronic broking by matching
the rates
Correct Answer
Fixed date
Correct Answer
False
Correct Answer
US Dollar
Correct Answer
2002
Question At the request of M/s Universal Traders Calcutta, State Bank of India opened a
documentary credit in Favour of M/s Star Trading Co Dubai, for USD 25000/-.Here State Bank
of India Calcutta is known as
Correct Answer
Issuing Bank , Opening Bank
instrument.
Correct Answer
False
Question The international liquidity problem was tackled effectively by a reserve asset
known as ________.
Correct Answer
Special drawing right
Question "A bill of exchange is drawn payable after 90 days after sight", then it will be
considered as:Correct Answer
Usance Bill
exchange?
Correct Answer
USD 1 trillion
Question Why is Bill of Exchange a Quasi Negotiable Instrument?
Correct Answer
It represents title to goods , It is issued under Sale of Goods act
Question Mostly, countries in the Middle east require ________ invoice, for facilitating
import duties .
Correct Answer
Legalised
Correct Answer
True
Question When a credit is made to available to additional beneficiary wholly or partly it is
called as ________.
Correct Answer
Transferable credit
Question
In the syndicated loan arrangement the borrower has to execute :-
Correct Answer
points.
Correct Answer
50
Correct Answer
long term bonds
Question Who issues guidelines for Direct Investments abroad by any Indian?
Correct Answer
Exchange Control Department of RBI
Question The credit which does not constitute a legally binding undertaking between the
bank and the beneficiary is ________.
Correct Answer
Revocable Credit
Question
"Currency Snake"
Correct Answer
Plus or minus movement of exchange rate around the parity rate
Correct Answer
Question Bridge Loans are granted for construction of large size bridges, and flyovers.
Correct Answer
False
Question A Dealer bought USD at 47.5000, in morning and the USD is quoted in the noon
at 1 USD =48.2000/49.7000, then he has the opportunity for ________.
Correct Answer
Arbitrage
Question Samuraibonds are
Correct Answer
Foreign yen bonds issued to non resident entities in Japanese Market
Correct Answer
Economies
Question Terms in an Irrevocable credit can not be alterred at all.
Correct Answer
False
Question
Correct Answer
Your Answer
Swap price Difference in prices of two legs of buying and selling

Difference in prices of
two legs of buying and selling
Euro Market Market in Euro currencies Market in Euro currencies
Making market
Quoting rate for both buying and selling a currency Quoting rate for both
buying and selling a currency
Spread
Price difference between bid and offer Price difference between bid and offer
Question Various exchange rate mechanisms are basically used for
Correct Answer
Correcting currency disequilibrium
Correct Answer
True
Question ________ is the acid test for events to be included in country risk.
Correct Answer
Control by Government'
war was ________.
Correct Answer
USA
Correct Answer
Provide Technical and administrtive support , Planning, promoting and
developing export oriented Industries
Question Under whose administration does ECGC work?
Correct Answer
Ministry of Commerce
Question A Forward purchase contract was booked with an authorised dealer and
subsequently cancelled .It :Correct Answer
Can be booked again with another dealer , Can be booked again with the
same dealer
Question An Indian party which has made direct investment abroad has to submit a annual
performance report in form ARP-1 to RBI.
Correct Answer
False
Question ________ is drawn by taking mean of the bid and offered rates.
Correct Answer
Middle rate
Correct Answer
JV/WOS
Correct Answer
Question Mr P has exported goods in May 2005 and is expecting payment of Euro 25000
by the last week of Sept 2005. Give details of the forward contract he can book :Correct Answer
He can book a sale contract any time from May 2005 till Mid Sept 2005, for
Euro 25000 or less, for maturity last week of Sept.
Question
Correct Answer
Your Answer
Treasury management
Profit making
Arbitraging
Rate disparity
Futures, Options
Hedging instruments
Speculation
Question The 'On Board' bill of lading means bill of lading evidencing that :Correct Answer
The goods are put on board a ship for shipment
Correct Answer
True
Question After the second world war many countries adopted the route of ________ to give
facelift to sagging economies.
Correct Answer
Devaluation of their currencies
Question Mr A sells an option conferring the right to buy a kilogram of silver at Rs 8000/for next six months means :Correct Answer
The buyer of option can buy silver from Mr A at 8000/- per Kg, in next 6
months, even if the price goes up, , The buyer of option can sell silver to Mr A at 8000/- per
Kg, in next 6 months, even if the price goes down.
Question Mr A an Indian exporter is expecting to receive payment for exports in Hong kong
dollar, after one month; How can he cover the exchange rate fluctuation risk?
Correct Answer
By booking a A forward contract in HKD itself , By booking a Cross
currency option between USD and HKD and / or USD and Rs
Question Normally the forward contracts are booked for making huge profits.
Correct Answer
False
Correct Answer
Question Fixed interest rate Eurobond without the option to convert to equity is known as
________.
Correct Answer
Straight Debt
Question What criteria of lending is adopted by The International Development agency
while giving loans to a country?
Correct Answer
The per capita income of the borrwoing country , The population of the
borrwoing country
Question A country needs external commercial borrowings to :Correct Answer
Meet the adverse balance of payments position
project ?
Correct Answer
Question How does a company use swap to restructure debt, in its balance sheet?
Correct Answer
By resorting to floating rate from fixed rate , By resorting to fixed rate from
floating rate
Correct Answer
False
Question Which general risks are covered by any insurance policy for transit?
Correct Answer
Question The ________is a Floating rate index for swaps.
Correct Answer
US Commercial paper rate
Question What maxim is followed by the forex dealer when indirect method of exchange
rate quotation is used?
Correct Answer
Buy Low, sell High
Correct Answer
False
Question Value of USDollar is ________ in the world market but RBI is trying to match the
Rupee value with it.
Correct Answer
Depreciating
Question The option which can be exercised on the maturity date and not before it is
known as________.
Correct Answer
European Option
Question As regards the due date of an Option exercise which methods are in vogue?
Correct Answer
American option , European Option
Correct Answer
False
Question Which invoice gives accurate record of the type of merchandise shipped for the
purpose of fixing duties in the country of importer?
Correct Answer
Consular Invoice
Question ADR Level I, is the final step to enter US erquity market.
Correct Answer
False
Question What are the categories of exposures, a person faces in International trade?
Correct Answer
Transaction exposure , Translation exposure
Question
Corporates are allowed to raise funds abroad up to $ 15 million as short term
finance if they have EPCG license.
Correct Answer
True
Question Name the method of payment where the seller neither gets the guarantee of
payment from the bank, nor the possibility of negotiation of documents :Correct Answer
Bills for Collection
Question The investor is in the money when :Correct Answer
The exercise price is below the spot price for a call option , The exercise
price is above the spot price for a put option
Question In an already booked forward contract, a person may seek early delivery,
extension in period, or cancellation.
Correct Answer
True
Correct Answer
Question The credit rating of World Bank is high in the world Capital market because it
operates at the debt equity ratio of 1:2
Correct Answer
False
known as ________.
Correct Answer
Back to Back credit
Correct Answer
Correct Answer
Denmark
restricted?
Correct Answer
known as ________.
Correct Answer
Correct Answer
"On Board"
Correct Answer
Fixed date
Companies
Question Who introduced the worlds first exchange traded currency futures?
Correct Answer
Chicago Mercantile Exchange
Correct Answer
borrwoing country
Correct Answer
True
Question
Correct Answer
Exchange margins
FEDAI
ECD
Forward Purchase contract currency at premium
Forward purchase contract currency at discount
Question
Correct Answer
Government regulatios, fiscal policies, political instabilities , Market
demand and supply, sentiments
Question What are the functions of International Finance Corporation?
Correct Answer
Help private enterprise by financing projects , Provide technical assistance
to private enterprise
Correct Answer
ODA
Correct Answer
________.
Correct Answer
Straight Debt
Correct Answer
Transaction exposure , Translation exposure
Question
How does RBI control Exports?
Correct Answer
Through Rule like "Full value of Export bills must be realised in 180 days," ,
Through Rule like " Export must be denominated In a currency of the Importing country or a
freely convertible currency"
Question Name the members of Exchange Banks association :Correct Answer
Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar,
Correct Answer
False
points.
Correct Answer
50
Question The creditworthiness of the futures seller and the futures buyer is ________
because of the presence of the Futures exchange.
Correct Answer
Irrelevant
Question
Swap price
Euro Market
Making market
Spread
Price
Correct Answer
Your Answer
Difference in prices of two legs of buying and selling
Quoting rate for both buying and selling a currency
difference between bid and offer
Question
Cause of increase in cost of public issues Underwriting fees , selling commission
Correct Answer
True
Question With whom can an exporter or importer book the forward contract?
Correct Answer
Authorised dealer/Authorised person
Question Which Indian Co. is not eligible to make investment abroad under automatic
route?
Correct Answer
Co which is caution listed by RBI
Question In a coupon swap the receiver is the one who receives fixed rate of interest.
Correct Answer
True
Correct Answer
Multimodal transport document , Combined Transport document
Correct Answer
False
Correct Answer
It represents title to goods , It is issued under Sale of Goods act
Question The rate of interest on rupee finance for exports is not exceeding ________ less
than PLR.
Correct Answer
0.025
Question Sterling FRNs are issued in Europe, USA ,Asia
Correct Answer
False
Correct Answer
An Option
Correct Answer
Question What are the powers of restricted money changers?
Correct Answer
Purchase foreign currencies
Question Both futures and options are traded on a public exchange.
Correct Answer
False
Correct Answer
Your Answer
Question ________ is the price at which the market maker is prepared to borrow the money.
Correct Answer
Bid rate
Question A Dealer Buys commodity in Bombay and sells it in Delhi due to price
differentials. He is said to be resorting to which practice?
Correct Answer
Arbitrage
Question
Fixed, Floating or Limited flexibility are used in the context of
Correct Answer
Exchange Rates
Question Exim acts as ________ for Government, RBI and IDBI .
Correct Answer
An agent
Correct Answer
Correct Answer
Correct Answer
Question In ________ transaction the delivery is postponed from the agreed date.
Correct Answer
Rollover
Question Integrated branches of Commercial banks handle forex transactions as well as
Correct Answer
True
Question World Bank gives loans for
Correct Answer
Structural Adjustments , Infrastructure projects , BOP problems
Correct Answer
Revocable Credit
Question What non funded facilities are granted by Export Import Bank of India?
Correct Answer
Guarantee for Bid bond, execution of export project, for borrowings
abroad, for retention of money , Advance payment Guarantee, performance guarantee
transportation.
Correct Answer
True
Question What is a coupon swap?

Correct Answer
Swap contract exchange of fixed rate payment system for a floating rate
system
Correct Answer
True
Correct Answer
False
Question
PP Form
Health Certificate
Correct Answer
Your Answer
Question
Cross currency forward contract is not meaningful if original contract is in Rupees
to USD
Correct Answer
True
Correct Answer
Question The 'On Board' bill of lading means bill of lading evidencing that :Correct Answer
The goods are put on board a ship for shipment
Question
Correct Answer
Netherlands Guilder
Germany
Mark
Ireland
Punt
Luxemberg Franc
Question The World Bank Group Consists of
Correct Answer
International Development Association , International finance Corporation ,
Multinational Investment Guarantee Agency
Question Any company involved in foreign exchange transactions is exposed to ________
risk.
Correct Answer
Currency
Correct Answer
True
Question Floating rate notes are traded in secondary market also.
Correct Answer
True
Correct Answer
operations
Question
The investor is in the money when :-
Correct Answer
The exercise price is below the spot price for a call option , The exercise
Question The working of the IBRD and IMF in recent has blurred the difference between
the two
Correct Answer
True
Question For importing goods in India RBI insists on ________ value.
Correct Answer
CIF
Correct Answer
Square
Question FRNs are issued for a maturity period of ________ and are normally redeemed in
one shot.
Correct Answer
5-7 years
Question What are the functions of International Finance Corporation?
Correct Answer
Help private enterprise by financing projects , Provide technical assistance
to private enterprise
Correct Answer
known as ________.
Correct Answer
Back to Back credit
Question Value date means the date on which :Correct Answer
Delivery of both the currencies will be made
Question FEDAI does not require RBI permission to frame and revise rules of business
Correct Answer
False
war was ________.
Correct Answer
USA
Companies
Correct Answer
against terrorism
Question Criteria for investment abroad under automatic route :Correct Answer
Activity for investment is core activity of Indian Company. , Total Financial
commitment in JV/WOS as per prescribed ceiling
Correct Answer
floating rate
Correct Answer
Bid rate
Question
Which type of Convertibility of Rupee launched in March 1992 ?
Correct Answer
Limited convertibility
Question A Forward purchase contract was booked with an authorised dealer and
subsequently cancelled .It :Correct Answer
Can be booked again with another dealer , Can be booked again with the
same dealer
Question Name the members of Exchange Banks association :Correct Answer
Foreign Banks at Bombay, Calcutta, Delhi, Madras, Amritsar,
Question If a dealer of securities is quoting rate as 200-250 then the rate 200 signifies
Correct Answer
Bid rate
Question What do you call a 'decreasing principal swap'?
Correct Answer
Amortizing swap
Question When does a bank have an absolute advantage, in respect of interest rate
swaps?
Correct Answer
When it has advantage under fixed interest system as well as floating
interest rate system
Question
An Indian exporting goods to New York receives dollars in New York.
Correct Answer
True
Question At the request of M/s Universal Traders Calcutta, State Bank of India opened a
documentary credit in Favour of M/s Star Trading Co Dubai, for USD 25000/-.Here State Bank
of India Calcutta is known as
Correct Answer
Issuing Bank , Opening Bank
Question A Bill of exchange payable 45 days from date of shipment, is a means of ________
from seller to the buyer.
Correct Answer
Credit
instrument.
Correct Answer
False
Question External Commercial Debt market :Correct Answer
Prevails in Domestic market of foreign country , Prevails in offshore
markets
Question Sandby credis are introduced by US Banks because they were not permitted to
issue on demand guarantees.
Correct Answer
True
Question In a coupon swap the principal amount is identical in the same currency.
Correct Answer
True
Question Which method of payment is getting popular in Europe because of high costs in
other methods?
Correct Answer
Bills for collection
Question Dealing room is a place where the actual exchange of currencies takes place
phsically at predetermined rates.
Correct Answer
False
Question With reference to ECB, fund raising activity includes :Correct Answer
Floating rate notes, bonds, debentures , Syndicate loans, issue of shares
Correct Answer
Question What is the main purpose of a commercial invoice?
Correct Answer
To establish the contract of sale between the two parties.
Question What schemes have been floated by RBI for facilitating Inter bank transactions?
Correct Answer
Set up a market intelligence cell to study and monitor developments in
Forex Market , Clearing house for settlement and clearance for the operations of Ads
Correct Answer
Bid rate
Question How does ECGC protect exporters against risks for export finance
Correct Answer
Issuing various insurance policies covering different risks connected with
exports at nominal premium
Correct Answer
Correct Answer
Economies
Question What maxim is followed by the forex dealer when direct method of exchange
Correct Answer
Buy High, Sell Low
Correct Answer
Prices of capital market instruments change and are expected to change
drastically
Question After the second world war, International settlements were done through
________.
Correct Answer
Gold
Correct Answer
borrwoing country
Correct Answer
True
Question
PP Form
Health Certificate
Correct Answer
Your Answer
Question
The counter party in option is ________.
Correct Answer
The exchange
Question Which controls are not permitted by IMF?
Correct Answer
Current account controls
Question What is the effect of interweaving of national economies?
Correct Answer
Govt decisions have stronger international repurcussions
Correct Answer
floating rate
Question In Indian interbank market forward rates are generally quoted on the basis of
________.
Correct Answer
Calendar month
Question An exchange rate for $ was48.2050, it is now 48.2075, then one says that it has
moved ________ basis points
Correct Answer
25
Question Underwriters are more attracted to NIF issue because of :Correct Answer
Lesser risks , Increased returns , Easy marketability features
Question Equity can be raised internationallly by a company through :Correct Answer
Fund raising, underwriting, hedging , arbitration operations
Question
Correct Answer
Swap price
Euro Market
Making market
Spread
Question
The currency swaps used ________.
Correct Answer
To lower the risk of currency exposure
Question The volume of trading of Derivatives in the world trade market is growing but still
only 5% of the total.
Correct Answer
False
Correct Answer
________.
Correct Answer
Straight Debt
Question Under which method of payments is the buyer not required to pay till he gets the
possession of the documents?
Correct Answer
Documents against payment terms specified in the bill of exchange
Correct Answer
outside the country
Question CFR = FOB plus freight paid by seller + insurance paid by seller.
Correct Answer
False
Question What is the statutory requirement about receivables of exports from India?
Correct Answer
The export receivables must be repatriated within six months of the date
of shipment.
________.
Correct Answer
Correct Answer
Question The integrated treasury branches of commercial banks handle which type of
business?
Correct Answer
Forex transactions, Derivatives transactions , Mney market and bond
market transactions
Question Method of advance payment is not disadvantageous to :Correct Answer
The seller
Correct Answer
True
Correct Answer
True
Question Which functions does the Bill of Lading serve?
Correct Answer It is a document of title to goods., It is receipt of goods
Question A Bank quotes interest rate of 9.50/10.00 for six months dollar deposit, here the
bid rate is :Correct Answer 9.50% P.A.
Question What is Sovereign Risk?
Correct Answer Risk of lending to the government of a country
Question How does ICC help poor countries?
Correct Answer Attract Foreign Direct investments togeather with UNCTAD
Question As per BIS, recovery from the recent crisis in global capital market was mainly due
to
Correct Answer Rapid and appropriate policy response in US and other countries , Increase
in
Foreign Direct Investments , free flow of credit
Question Out of 15 member countries in European Union 12 countries commiteed
themselves for a single
currency.
Correct Answer True
Correct Answer True
Correct Answer Cheque book and nomination
________.
Correct Answer Straight Debt
Question
PP Form
Health Certificate
Correct Answer
Question For issuing a Documentary credit The applicant is required to provide to the issuing
bank details about
Correct Answer The purchase-sales contract, the mode of payment, the tenor of payment ,
The documents
required, the names of authorities who would issue the documents
Question The characteristics of an International documentary credit are :Correct Answer It is an undertaking given by the openers bank to pay certain sum of money
, It is an
undertaking given on behalf of a certain person to another person in different country
Question CFR = FOB plus freight paid by seller + insurance paid by seller.
volatile
because of uncertainties in UK and gyrations of sterling against major ________ countries
Correct Answer OECD
options, swaps,
futures, arbitrage operations
Correct Answer True
Correct Answer Buffer Stock Facility
Correct Answer Suppliers credit , Forfaiting
Question Normally the forward contracts are booked for making huge profits.
Question Head office of ICC is in Paris because of its First President Eliance Clementel.
Correct Answer True
Question A ________ Bill of lading does not specify the terms and conditions of carriage.
Correct Answer Short Form
Correct Answer Roughly 90 % of the total turnover
Question For setting up joint ventures abroad orequity participation abroad, EXIM bank
provides funds
under ________ Scheme.
Correct Answer Overseas investment facility
Question Mr P has exported goods in May 2005 and is expecting payment of Euro 25000 by
the last week of
Sept 2005. Give details of the forward contract he can book :Correct Answer He can book a sale contract any time from May 2005 till Mid Sept 2005, for
Euro 25000
or less, for maturity last week of Sept.
Question In US Capital Market a Company preparesall the necessary documents in advance
of the public
issue under the facility known as ________.
Correct Answer Shelf Registration
Question Which common details will be available in any bill of Lading?
Correct Answer Names of consigner, consignee , The port of loading and unloading,
contract of shipment
Question Under the ________ standard the Country's Central Bank promised to buy back the
currency at
certain rate of Gold.
Correct Answer Gold
Question Short term instruments normally issued by corporate borrowers, forhigh values, at
a discount to
face value are known as ________.
Correct Answer Euro Commercial Papers
Question The type of trade where a country sells orange juice in return for cars is known as
________.
Correct Answer Counter Trade
Correct Answer Payment of hotel bills abroad,payment for expenses on Heart operation
abroad ,
Payment to EOUs in India for services rendered by them
Question Under the liberalisation through FEMA,what can an AD offer to the clients, without
the prior
permission of RBI or Government?
Correct Answer Hedges, interest rate swaps,currency swaps. , Caps and collars, and forward
rate
agreements
Question Sterling Market is attractive for aninternational investor because
Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and
long term
bonds
Question Under which contracts the seller pays theimport duty for the buyer?
Correct Answer DDP
Question PP Form is required when exports are madeto any country by post parcel on value
payable basis.
Question What were the immediate causes ofconverting the group of 5 into group of 7 and
convene
their meeting in late 1985?
Correct Answer Many Industries in USA had becomeuncompetitive with imports , In USA the
Trade
protectionnism had increased
Question What are the powers of money changers?
Correct Answer Purchase and sell foreign currencynotes and travellers cheques
Correct Answer Individuals , firms, companies,resident in India
Question What is the role of ICC towards WTO?
Correct Answer To provide world businessrecommendations to WTO
Question Correct Answer Your Answer
Swap price Difference in prices of two legs of buying and selling Quoting rate for both buying
and selling a
currency
Euro Market Market in Euro currencies Market in Eurocurrencies
Making market Quoting rate for both buying and sellinga currency Difference in prices of two
legs of buying
and selling
Spread Price difference between bid and offer Maket of'Euro'
Question Position in a currency is said to be________, when sales equal purchases.
Correct Answer Square
Question Hotels and Airline companies are allowed to receive payments in Indian rupees
from foreign
tourist without insisiting on ________.
Correct Answer Encashment certificate
Question Why is Bill of Exchange a QuasiNegotiable Instrument?
Correct Answer It represents title to goods , Itis issued under Sale of Goods act
Question Which details about forward contracts dothe Exchange Controls verify ?
Correct Answer Particulars of cancellation offorward cover for the equivalent of USD
500,000
Question In the context of International economy,the period between 1920s and 1930s is
known as
Correct Answer Great Depression
Question What do you understand by Commercial Risk?
Correct Answer Protracted default by the buyer ,Insolvency of the buyer
Question
What are the features of Settlement price ?
Correct Answer
Price established by the clearing house at the end of each trading session ,
It is used to determine the net gain, loss, margin call and next days price limits
Correct Answer
Visaed
Question The working of the IBRD and IMF in recent has blurred the difference between
the two
Correct Answer
True
Question Under the liberalisation through FEMA, what can an AD offer to the clients,
without the prior permission of RBI or Government?
Correct Answer
Hedges, interest rate swaps, currency swaps. , Caps and collars, and
forward rate agreements
Correct Answer
"On Board"
decades?
Correct Answer
Increase in volatile trading conditions
Question In the context of International economy ,the period between 1920s and 1930s is
known as
Correct Answer
Great Depression
Question
What is the statutory requirement about receivables of exports from India?
Correct Answer
of shipment.
Question An exporter expecting payment in$ next month will book a forward purchase
contract.
Correct Answer
False
Question The characteristics of IDA Loan are:
Correct Answer
It gives loans to poorer countries , The rate of interest is zero percent , The
repayment period is very long 40 years
Question What is the duty of the AD while booking a forward contract?
Correct Answer
Verify the suitable documentary evidence, and that the customer is
exposed to risk , Ensure that a genuine transaction exists
Question Criteria for Direct investment abroad under normal route :Correct Answer
Viability of the proposal, and excellent track record of business ,
Experience and expertise of promoters, benefit to the country
Question When was the first currency swap introduced in world market?
Correct Answer
1970
Correct Answer
True
Correct Answer
Question
Both futures and options are traded on a public exchange.
Correct Answer
False
Correct Answer
operations
Correct Answer
USD 275 Billion
Question A Bank quotes interest rate of 9.50/10.00 for six months dollar deposit, here the
bid rate is :Correct Answer
9.50% P.A.
Correct Answer
False
restricted?
Correct Answer
Question The American Dollar market comprises of the domestic segment of USD the
offshore segment of USD.
Correct Answer
True
Question The major cost components of NIF are :Correct Answer
Underwriters fees , Margins of notes
Question FRN's issued with ceiling on interest beyond which the issues is not required to
pay interest is known as Mini-Max FRN
Correct Answer
True
Question A weight list, a packing list used in international trade are which type of
documents?
Correct Answer
Operational Documents
Correct Answer
Revocable Credit
Correct Answer
long term bonds
Correct Answer
Basket of Currencies of members of EMS
Question At Least one principal Lender bank is essential for issue of the ADR or GDR.
Correct Answer
False
Question In an already booked forward contract, a person may seek early delivery,
extension in period, or cancellation.
Correct Answer
True
Question A Run on gold gold by a country means
Correct Answer
Exchange of reserve currency in to gold
Which is the bid rate for USD?
Correct Answer
USD 1=Rs 50.5000
JV/WOS
one shot.
Correct Answer
5-7 years
Correct Answer
True
Question Corporates are allowed to raise funds abroad up to $ 15 million as short term
finance if they have EPCG license.
Correct Answer
True
Correct Answer
outside the country
Correct Answer
volatile because of uncertainties in UK and gyrations of sterling against major ________
countries
Correct Answer
OECD
Question For issuing a Documentary credit The applicant is required to provide to the
issuing bank details about
Correct Answer
The purchase-sales contract, the mode of payment, the tenor of payment ,
The documents required, the names of authorities who would issue the documents
Correct Answer
against terrorism
Correct Answer
American Dollar
Question "Flip-Flop', 'Mini-Max', 'Capped' 'Perpetual' are the various types of ________.
Correct Answer
Floating Rate Note (FRN)
Question Combined Certificate of Origin and Value are required by ________.
Correct Answer
Commonwealth Countries
Question Bank with lowest Bid for fees etc and which undertakes the responsibility of loan
syndication is called :Correct Answer
The lead bank- leadmanager- arranger
Question Any company involved in foreign exchange transactions is exposed to ________ risk.
Correct Answer Currency
Question In a documentary credit the word document means :Correct Answer Specified documents of title, transportation, insurance , Specified
Question The stock of foreign reserves in India, is now around ________ % of the GDP and
exceeds money circulation.
Correct Answer 15
Correct Answer True
Correct Answer 26
________.
Correct Answer Straight Debt
Question Name the services provided by 'Reuter 3000' in forex market:Correct Answer Quotation of forex rates, interest rates , Electronic broking by matching the
rates
Question In Import financing through trust receipts, with whom does the ownership of
goods remain?
Correct Answer Bank releasing the import documents
Question The working of the IBRD and IMF in recent has blurred the difference between the
two
Correct Answer True
Question The large flow of money internationally was caused primarily by the oil price hikes
engineered by ________.
Correct Answer OPEC countries
Question The type of trade where a country sells orange juice in return for cars is known as
________.
Correct Answer Counter Trade
Question During the fixed rate exchange system prevailing in India, the intervention
currency was ________.
Correct Answer Sterling Pound
Correct Answer US Dollar
Correct Answer Transaction exposure , Translation exposure
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Question Prior approval of RBI is needed for payment of all imports.
Question Value date means the date on which :Correct Answer Delivery of both the currencies will be made
Question How is the exporter paid through 'import loan'?
Correct Answer The Bank delivers goods to the importer against his 'trustee' receipt,
exporter sells the goods and then pays for the same
Question
Correct Answer
Returning NRI
RFC
NRI Deposits
FCNR, NRE
NRIS AND OCBS
INVESTMENT IN MMMF
EXPORTERS
EEFC
Question The participants in the Forex Markets are :Correct Answer Non banking entities wishing to exchange currencies, , Banks and their
Question For a spot transaction carried out on Thursday, currencies will be exchanged on :Correct Answer Monday
Question What was the purpose of reviewing FERA 1973 in the year 1993?
Correct Answer Economic Liberalisation relating to Foreign trade and Foreign investments
decades?
Correct Answer Increase in volatile trading conditions

Question
Correct Answer
16 principles for good environmental conduct Business Charter of sustainable development
Commercial crime Bureau
World Chambers Congress World Federation of Chambers Doha
ICC Conference in 2004 Marrakesh INCOTERM
13 types of trade contracts INCOTERM Business Charter of sustainable development
Question What is the volume of the world's average daily transactions in foreign exchange?
Correct Answer USD 1 trillion
Question How does RBI control Exports?
Correct Answer Through Rule like "Full value of Export bills must be realised in 180 days," ,
Through Rule like " Export must be denominated In a currency of the Importing country or a
freely convertible currency"
Question In US Capital Market a Company prepares all the necessary documents in advance
of the public issue under the facility known as ________.
Correct Answer It represents title to goods , It is issued under Sale of Goods act
Correct Answer Basket of Currencies of members of EMS
Correct Answer ODA
Question In DAF, the frontier means :Correct Answer Frontier of exporter's country , Frontier of importer's country
Question Resident Individuals in India can acquire foreign bonus shares on the foreign
securities already held by them without prior approval of RBI
Correct Answer True
Question The amount in EEFC account can be deposited in FCNR account to get interest.
Correct Answer True
points.
Correct Answer 50
Question Profitability of a project in China to an Indian may be enhanced by ________.
Correct Answer Concessionary finance available in China
Correct Answer Exchange Control Department of RBI
Question Exchange Rate means
Correct Answer Value of one currency in terms of another
Question What are the activities of ICC?
Correct Answer Aribtration and dispute resolving , Canvass for open trade combat
commercial crime
Question For importing goods in India RBI insists on ________ value.
Correct Answer CIF
Question As regards the due date of an Option exercise which methods are in vogue?
Correct Answer American option , European Option
Question As per BIS, recovery from the recent crisis in global capital market was mainly due
to
Correct Answer Rapid and appropriate policy response in US and other countries , Increase
in Foreign Direct Investments , free flow of credit
called as ________.
Correct Answer Transferable credit
Correct Answer True
Question Which type of finance is available for the full value of the asset, in international
trade?
Correct Answer International Leasing
Correct Answer True
Correct Answer True
annum is ________.
Correct Answer Rs. 350 crore
Question Punjab National Bank Mumbai Branch quoted USD 1= Rs 50.5000/52.5050. Which
is the offered rate for Rs?
Correct Answer USD 1=Rs 50.5000
Correct Answer No one at all.
Correct Answer Revocable Credit
Question An Indian party which has made direct investment abroad has to submit a annual
performance report in form ARP-1 to RBI.
Question In the forward rate quotations between two currencies, when one currency is at
discount the other currency is at premium.
Correct Answer True
Question What non funded facilities are granted by Export Import Bank of India?
Correct Answer Guarantee for Bid bond, execution of export project, for borrowings abroad,
for retention of money , Advance payment Guarantee, performance guarantee
Issues linked with LIBOR,LIBID,LIMEAN = FRNs
Issue of bonds without fixed rate of interest, linked to short term interest rate in the global
market = FloatingRate Note
Issue of loans internationally,through arranger, underwriter,co manager, for a large amount
for sharing risk of lending = Syndicated Loans
Equity issues in the foreign markets either as direct investments or portfolio investments.
Question Who arranges for Insurance and transportation under EXW contract?
Correct Answer Buyer arranges and pays
Correct Answer Rollover
Correct Answer Provide Technical and administrtive support , Planning, promoting and
Question The working of the IBRD and IMF in recent has blurred the difference between the
two
Correct Answer True
Correct Answer The per capita income of the borrwoing country , The population of the
borrwoing country
Correct Answer Bid rate
Question The participants in the Forex Markets are :Correct Answer Non banking entities wishing to exchange currencies, , Banks and their
Question What were the immediate causes of converting the group of 5 into group of 7 and
convene their meeting in late 1985?
Correct Answer Many Industries in USA had become uncompetitive with imports , In USA
Question Mostly, countries in the Middle east require ________ invoice, for facilitating import
duties .
Correct Answer Legalised
Question In US Capital Market a Company prepares all the necessary documents in advance
of the public issue under the facility known as ________.
Correct Answer True
Question Why did Govt of India initially exercise controls on foreign receipts and payments?
Correct Answer Conserve and mobilise foreign exchange for war effort
Question The investor is in the money when :Correct Answer The exercise price is below the spot price for a call option , The exercise
Correct Answer 15
Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of
Question How many terms are there under the class " main carriage unpaid"?
Correct Answer Three
Question Underwriters are more attracted to NIF issue because of :Correct Answer Lesser risks , Increased returns , Easy marketability features
Question To make the export more competitive and remunerative, the Indian Govt extends
________ facility.
Correct Answer Cash Incentives
Question Transaction exposures arises because of :Correct Answer The cost of settlement of future payment changes , Receipt denominated in
a foreign currency varies due to exchange rate fluctuation
Question Which currency is traded in one leg of about 70% of the world's transactions?
Correct Answer US Dollar
Question Cash flows generated from aforeign project may replace revenue-producing
imports to the host country
Question Criteria for Direct investment abroad under normal route :Correct Answer Viability of the proposal, and excellent track record of business , Experience
and expertise of promoters, benefit to the country
Question Which common details will be available in any bill of Lading?
Correct Answer Names of consigner, consignee , The port of loading and unloading,
contract of shipment
Question The regulations under FEMA are contained in which manual?
Correct Answer Exchange control Manual
Question For setting up a joint venture or WOS abroad, Indian banks operating in India need
a clearance :Correct Answer Under Banking Regulation Act
Question In case of International trade, the role of a banker in case of a bill for collection is
that of :Correct Answer Routing the documents of transport along with other documents and apply
the proceeds as per instructions
one shot.
Correct Answer 5-7 years
LastStage Form a single currency Meet in Maastricht in Netherland
The First stage in the Europeand and Monetary Union (EMU) Free movement of capital in EC
Members to meet the convergence criteria and fix the exchange rates
Stage II in EMU Establishment of European Monetary Institute Establish EURO Bank
Stage III in EMU Members to meet the convergence criteria and fix the exchange rates Free
movement of capital in EC
Question Under which method of payments is the buyer not required to pay till he gets the
possession of the documents?
Correct Answer Documents against payment terms specified in the bill of exchange
Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and
long term bonds
Correct Answer Prices of capital market instruments change and are expected to change
drastically
country
Correct Answer
Buffer Stock Facility
Question In a coupon swap the principal amount is identical in the same currency.
Correct Answer
True
Question What do you understand by a swap?
Correct Answer
2 counter parties agree to exchange streams of payments over a period of
time
restricted?
Correct Answer
Correct Answer
against terrorism
Question The integrated treasury branches of commercial banks handle which type of
business?
Correct Answer
Forex transactions, Derivatives transactions , Mney market and bond
market transactions
finance rates.
Correct Answer
False
Question Sandby credis are introduced by US Banks because they were not permitted to
issue on demand guarantees.
Correct Answer
True
annum is ________.
Correct Answer
Rs. 350 crore
Question Which invoice is drawn in specific form to be supplied by the consular office of
the importer's country, for treatment of preferential tariff rates?
Correct Answer
Customs invoice
Correct Answer
of shipment.
Question Which causes may force a country to restrict imports or restrict transfer of
payments?
Correct Answer
Economic difficulties , Balance of payment problems such as non
availability of exchange reserves
Correct Answer
Question Which method of payment is getting popular in Europe because of high costs in
other methods?
Correct Answer
Bills for collection
Question The Euro Commercial paper is supported by a team-syndicated credit with both
sides of the transaction combined into one operation.
Correct Answer
True
Correct Answer
True
Question Both futures and options are traded on a public exchange.
Correct Answer
False
Question Which factors affect the exchange rates in short time period?
Correct Answer
Demand and supply, interest rates, inflation, , Sentiment, Speculation
Question In UK in london Market the Indirect Quote Method is still adopted.
Correct Answer
True
Question
Correct Answer
Treasury management
Profit making
Arbitraging
Rate disparity
Futures, Options
Hedging instruments
Speculation
Question EUROCLEAR, CEDEL are the names of ________ related with the issue of GDR.
Correct Answer
Registrars
Correct Answer
Question External Commercial Debt market :Correct Answer
Prevails in Domestic market of foreign country , Prevails in offshore
markets
Correct Answer
outside the country
Question After the second world war, International settlements were done through
________.
Correct Answer
Gold
Correct Answer
True
Question The option which can be exercised on the maturity date and not before it is
known as________.
Correct Answer
European Option
Question How many INCOTERMS are there in "Departure" Group?
Correct Answer
One
Question
________.
The creditworthiness of futures exchange is maintained through imposition of
Correct Answer
Margin
Correct Answer
True
Question Which authorities require the documents of International trade?
Correct Answer
Question In case of International trade, the role of a banker in case of a bill for collection is
that of :Correct Answer
Routing the documents of transport along with other documents and apply
the proceeds as per instructions
Question Equity can be raised internationallly by a company through :Correct Answer
Fund raising, underwriting, hedging , arbitration operations
known as ________.
Correct Answer
Question "Flip-Flop', 'Mini-Max', 'Capped' 'Perpetual' are the various types of ________.
Correct Answer
Floating Rate Note (FRN)
Question For a spot transaction carried out on Tuesday, where both centers have holiday
on Wednesday, currencies will be exchanged on :Correct Answer
Thursday if it is a working day at both the centers
Correct Answer
15
Question Which type of Convertibility of Rupee launched in March 1992 ?
Correct Answer
Limited convertibility
Question FRN's issued with ceiling on interest beyond which the issues is not required to
pay interest is known as Mini-Max FRN
Correct Answer
True
Correct Answer
Correct Answer
Question Which functions does the Bill of Lading serve?
Correct Answer
It is a document of title to goods. , It is receipt of goods
Correct Answer
Question What is LIBOR?
Correct Answer
Rate of interest for inter bank lending of funds for various maturities
Correct Answer
Question
Partnership firm not eligible for Overseas Direct Investment needs to apply to RBI
Correct Answer
ODI
transportation.
Correct Answer
True
Question
Correct Answer
Your Answer
Maturity of future Time when actual commodity is delivered
Euronotes
Bearer security issued in currency other than that of the country of issue
Margin on future
Eurobonds

Correct Answer
Correct Answer
True
Correct Answer
True
Question In the syndicated loan arrangement the borrower has to execute :Correct Answer
Correct Answer
An Option
Correct Answer
Question Open Insurance policy is for any amount for specific period and specific number
of shipments.
Correct Answer
False
country
Question A ________ Bill of lading does not specify the terms and conditions of carriage.
Correct Answer
Short Form
Question When does a bank have an absolute advantage, in respect of interest rate
swaps?
Correct Answer
When it has advantage under fixed interest system as well as floating
interest rate system
Correct Answer
True
Question Who acts as the trustee in case of import loan through trust receipt?
Correct Answer
Importer
Correct Answer
False
Question Mr M has imported some goods from Greece. What is the maximum period within
which he must make the payment?
Correct Answer
Six months from date of shipment
Correct Answer
Question QA request for additional ________ funds from a customer in a margin call.
Correct Answer
Margin
Correct Answer
Question An option on a future is ________.
Correct Answer
Derivative on a derivative
restricted?
Correct Answer
Correct Answer
False
to USD
Correct Answer
True
Question Head office of ICC is in Paris because of its First President Eliance Clementel.
Correct Answer
True
Question Revolving underwriting facility, short term note issuance facilty, transferabla
revolving undertaking facility are the names of :Correct Answer
Question
Swap price
Euro Market
Making market
Spread
Correct Answer
Your Answer
Question
What maxim is followed by the forex dealer when direct method of exchange
Correct Answer
Buy High, Sell Low
Correct Answer
An agent
Correct Answer
Brussels
Question What is a bill of lading?
Correct Answer
Transport document representing movement of goods by water.
Question The right without the obligation to sell a security is ________.
Correct Answer
Put Option
Question Why have futures and options come into existence?
Correct Answer
Question Dealing room is a place where the actual exchange of currencies takes place
phsically at predetermined rates.
Correct Answer
False
Correct Answer
Core activity
Correct Answer
Roughly 90 % of the total turnover
Correct Answer
Exchange Control Department of RBI
Correct Answer
Correct Answer
operations
Correct Answer
Question The type of trade where a country sells orange juice in return for cars is known
as ________.
Correct Answer
Counter Trade
Correct Answer
Question In a documentary credit the word document means :Correct Answer
Specified documents of title, transportation, insurance , Specified
Correct Answer
against terrorism
Question Under which category of exchange rate did the Indian Rupee came from June 92?
Correct Answer
Correct Answer
________.
Correct Answer
Question Mr M has imported some goods from Greece. What is the maximum period within
which he must make the payment?
Correct Answer
Six months from date of shipment
Question The price at which a person may purchase or sell the underlying ________.
Correct Answer
Exercise or strike price
Question What were the immediate causes of converting the group of 5 into group of 7
and convene their meeting in late 1985?
Correct Answer
Many Industries in USA had become uncompetitive with imports , In USA
Correct Answer
Question What is the primary concern of the seller in the International Trade?
Correct Answer
To be sure to get the payment for goods, in time and in the required
currency.
Question The characteristics of IDA Loan are:
Correct Answer
It gives loans to poorer countries , The rate of interest is zero percent , The
repayment period is very long 40 years
to USD
Correct Answer
True
Question Which contracts are used for transportation by road?
Correct Answer
FCA , CPT
Correct Answer
Correct Answer
Rollover
Correct Answer
False
Correct Answer
True
Question How did the Govt of India put the war time exchange controls in to a statutory
frame work?
Correct Answer
Enacting FERA 1947
Question Cash flows generated from aforeign project may replace revenue-producing
imports to the host country
Correct Answer
False
Correct Answer
True
restricted?
Correct Answer
Question Partnership firm not eligible for Overseas Direct Investment needs to apply to RBI
Correct Answer
ODI
week or month.
Correct Answer
True
Correct Answer
2002
Question A Bill of exchange payable 45 days from date of shipment, is a means of ________
from seller to the buyer.
Correct Answer
Credit
Correct Answer
Question What is the objective of INCOTERMS?
Correct Answer
Question
Before abandoning the Fixed exchange rate system,the Dollar gold parity was
fixed by USA Correct Answer
USD 35 per Ounce of gold
Correct Answer
Question Which of these are not considered as good securities by the banker?
Correct Answer
House Airway bill , Postal Receipt
Correct Answer
False
Correct Answer
False
Question Which causes may force a country to restrict imports or restrict transfer of
payments?
Correct Answer
Economic difficulties , Balance of payment problems such as non
availability of exchange reserves
Question For cancellation of an already booked forward contract, whose permission is
required by the customer?
Correct Answer
Nobody other than he himself
Correct Answer
True
Question Mr A an Indian exporter is expecting to receive payment for exports in Hong kong
dollar, after one month; How can he cover the exchange rate fluctuation risk?
Correct Answer
By booking a Cross currency option between USD and HKD and / or USD
and Rs , By booking a A forward contract in HKD itself
Question
What is the duty of the AD while booking a forward contract?
Correct Answer
Verify the suitable documentary evidence, and that the customer is
exposed to risk , Ensure that a genuine transaction exists
Question Why does a Transaction exposure arise?
Correct Answer
Trading flows , Dividend or capital flows
Question Who books an option forward contract?
Correct Answer
Party who is not definite about crystallisation of delivery date
Question Association of several scheduled commercial banks for forex business is ________.
Correct Answer
Foreign Exchange Dealers Association of India
Correct Answer
Question The creditworthiness of futures exchange is maintained through imposition of
________.
Correct Answer
Margin
Correct Answer
Bid rate
Correct Answer
projects abroad
Correct Answer
An agent
Question
Issuing Bank
Stand by credit
Letter of credit
Bill of exchange
Correct Answer
Opening Bank
Bank guarantee
Documentary credit
Usance

called as Correct Answer
Transferable credit
Correct Answer
True
Correct Answer
of shipment.
Question How does ECGC protect banker's against risks for export finance?
Correct Answer
Issuing various guarantees covering different risks connected with exports
at nominal premium
Select The Blank
Question
The option which can be exercised on the maturity date and not before it is
known as________.
Correct
European Option
Answer
Question
What are the functions of Asian Development Bank?
Correct
Give Softloans to poorer countries in Asia , Give project finance from resources
Answer
raised in world capital market
Question
The integrated treasury branches of commercial banks handle which type of
business?
Correct
Forex transactions, Derivatives transactions , Mney market and bond market
Answer
transactions
Question
Why have futures and options come into existence?
Correct
Answer
Question
Correct
Answer
Question
For issuing a Documentary credit The applicant is required to provide to the
issuing bank details about
Correct
The purchase-sales contract, the mode of payment, the tenor of payment , The
Answer
documents required, the names of authorities who would issue the documents
Question
In case of International trade, the role of a banker in case of a bill for collection
is that of :Correct
Routing the documents of transport along with other documents and apply the
Answer
proceeds as per instructions
Select The Blank
Question
A Documentary credit issued on the strength of another documentary credit is
known as ________.
Correct
Back to Back credit
Answer
True/False
Question
The Negotiating bank examines the documents submitted by the seller and
makes payment if they comply the terms and conditions of the LC.
Correct
True
Answer
Select The Blank
Question
A Bill of exchange payable 45 days from date of shipment, is a means of
________ from seller to the buyer.
Correct
Credit
Answer
Select The Blank
Question
The right without the obligation to sell a security is ________.
Correct
Put Option
Answer
Question
Internationally only those currencies are in demand
Correct
Answer
operations
Question
Where does the word derivative originate from?
Correct
Mathematics
Answer
Question
What facilities are proposed by Sodhani Committee for NRIs?
Correct
Answer
True/False
Question
Correct
Answer
True/False
Question
Housing Loan to NRI staff of Indian Companies, , NRIs be permitted to invest in

MMMF
There is no difference between CIP and CIF contracts except the mode of
transportation.
True
Cause of increase in cost of public issues Underwriting fees , selling
commission
True
Correct
Answer
Select The Blank
Question
Legalised invoice is also called ________ invoice.
Correct
Visaed
Answer
Match The Following
Question
Swap price
Correct Answer
Your Answer
Difference in prices of two legs Difference in prices of two legs

Euro Market
Making market

and offer

and offer
Match The Following

Question
Correct Answer
Your Answer
Treasury management
Profit making
Profit making
Arbitraging
Rate disparity
Rate disparity
Futures, Options
Hedging instruments
Hedging instruments
Speculation
Speculation
Spread

Question
If a dealer of securities is quoting rate as 200-250 then the rate 200 signifies
Correct
Bid rate
Answer
Question
Which document is used for transportation by air, rail, road, marine?
Correct
Answer
True/False
Question

Multimodal transport document is also known as "IntermobileTransport
Document"
True
Correct
Answer
Select The Blank
Question
Global capital market can be understood from the study of ________.
Correct
Answer
True/False
Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside
the country
Question
With the advent of futures and Options there is no need for additional
False
Correct
Answer
Select The Blank
Question
Even after liberalisation of exchange controls, the Euro sterling market
remained volatile because of uncertainties in UK and gyrations of sterling
against major ________ countries
Correct
OECD
Answer
True/False
Question
Country risk analysis is a futile exercise in the background of cost of analysis.
Correct
True
Answer
Select The Blank
Question
________ is the agency of ICC which deals with the maritime crime.
Correct
Answer
Question
Export finance
Correct
Answer
Select The Blank
Question
When a credit is made to available to additional beneficiary wholly or partly it
is called as ________.
Correct
Transferable credit
Answer
Question
Financial management is complex process for
Correct
Answer
Question
Correct
Answer
True/False
Question
Correct
Answer
True/False
Question
Government regulatios, fiscal policies, political instabilities , Market demand

and supply, sentiments
In an interest rate swap if the payment schedules are identical, only diffrence
True
ECGC offers isurance protection to Indian exporters againt payment risks.
Correct
True
Answer
Select The Blank
Question
The credit which does not constitute a legally binding undertaking between the
Correct
Revocable Credit
Answer
Question
Mr P has exported goods in May 2005 and is expecting payment of Euro 25000
by the last week of Sept 2005. Give details of the forward contract he can book
:-
Correct
He can book a sale contract any time from May 2005 till Mid Sept 2005, for
Answer
Euro 25000 or less, for maturity last week of Sept.
Question
Which authorities require the documents of International trade?
Correct
Answer
Question
The regulations under FEMA are contained in which manual?
Correct
Answer
True/False
Question
Exchange control Manual

In the forward rate quotations between two currencies, when one currency is
at discount the other currency is at premium.
True
Correct
Answer
Question
What is Risk Syndication facility?
Correct
Answer
True/False
Question

Cross currency forward contract is not meaningful if original contract is in
Rupees to USD
True
Correct
Answer
Question
What are the sources of raising funds for exports?
Correct
Answer
Question
To whom is an AD required to report the cancellation of forward contracts?
Correct
No one at all.
Answer
Select The Blank
Question
A Credit can be a confirmed credit only if it is also ________.
Correct
Answer
Question
Which non financial service does EXIM Bank give to an exporter?
Correct
Answer
Question
Which of these are considered as miscellaneous documents?
Correct
Answer
Question
Which general risks are covered by any insurance policy for transit?
Correct
Answer
Question
The crisis in global capital market in 2002-04 was due to
Correct
Answer
Collapse of Enron , Collapse of Argentina's currency board , The war against

terrorism

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International Finance

the complete definition of each term is available in INCOTERMS 1990. True

futures are a form of forward contract.

transacting FOREX business and exchange rates; ensure the profitability of

JV means joint venture and WOS means world of security. False

what is an irrevocable letter of credit? That which cannot be cancelled or amended

maxim buy high sell low =

indirect method of rate quotation

different from spot date

1,2,3 months from spot date

futures contracts are traded in cycle of four times annually.

which type of account can be opened in EEFC? Current Account

what is effect of interweaving of national economics? Govt. decisions have stronger

the bank of international settlement draws attention to which development? The

proposal under non automatic route

proposal under normal route

investment by partnerships not in core activity

investment under automatic route

SWIFT is an efficient communication system used in FOREX transactions the world

which credits are permitted in EEFC account? Earnings in foreign exchange;

ADR level I, is the final step to enter US equity market. False

the document required by the commonwealth countries is the: combined certificate

name the parties involved in launching GDR? Lead managers, depository,

official documents are otherwise called commercial documents. False

requirements of the parties to the transaction

= documents that satisfy the statutory requirements of any

= documents that perform the function of obtaining finance

and collection of payment etc.

a red clause letter of credit is also called anticipatory letter of credit.

debts swap and assets swaps linked to bonds are arbitrage.

what is the effect of interweaving of national economics? Govt. decisions have

= Foreign or non resident investor

EEFC = Foreign currency

while transferring a share from a resident to a non resident, whose permission is

merger/amalgamation; to raise funds in India through issue of ADR

the participants of FOREX markets are: speculators, arbitragers, foreign investors

what do you mean by the trust receipts? A documents executed by importer

whose permission is required for issue and transfer of securities to non-residents?

GDR is a non negotiable instrument. False

insurance cover note

= it is an undertaking given by the

export declaration form

= it is a declaration of the exporter

certificate of origin = it is a document indicating a

External commercial borrowing means: finance raised by Indian companies from

what are the important characteristics of bill of exchange? It is an instrument in

Annexure A of schedule of RBI notification FEMA20/2000 means: list of industries

Exchange control is to manage demand and supply of home currency by the

post-shipment finance is considered as long term finance. False

investment in capital abroad, or subscription to the memorandum of association of a

Grievance should be submitted by a worker to immediate superior.

what are the qualities of a conciliator? Independent; impartial; physically and

industrial relationship means = relationship between

industrial relations can be seen in a = more sick units than profit

the industrial relation in public sector is narrow due to = in excessive political

each worker has to be given rest after working for: 5 hours

grievances may be = real or false

grievances are connected with = wages, promotion, work

grievance should be submitted to the = immediate superior

grievances are settled = with maximum speed

a tribunal shall consists of one person.

pension able service and salary is determined by the following: contribution to

compensation under the workmens compensation act cannot be assigned, attached or

a person recruited for work abroad by a company is also considered to be a worker