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Dr.G.R.Damodaran College of Science
(Autonomous, affiliated to the Bharathiar University, recognized by the UGC)Reaccredited at the 'A' Grade Level by the NAAC and ISO 9001:2008 Certified
CRISL rated 'A' (TN) for MBA and MIB Programmes
II B COM (IB)(2014-2017)
SEMESTER IV
CORE:FOREIGN EXCHANGE MANAGEMENT -417 C
Multiple Choice Questions.
1. FEMA stands for
A. Foreign Exchange Management Act
B. Foreign Earning Management Act.
C. Foreign Efficiency Monitoring Act
D. None of the above
ANSWER: A
2. The authorized dealers under FEMA are classified into
A. two categories
B. three categories
C. four categories
D. five categories
ANSWER: B
3. The term Loro account means
A. my account with you.
B. our account with you
C. your account with us.
D. their account with you
ANSWER: D
4. Foreign exchange transactions involve monetary transactions
A. among residents of the same country
B. .between the residents of two countries
C. between residents of two or more countries
D. among residents of at least three countries.
ANSWER: C
5. ------ is a component of BOP
A. Current account
B. Purchase account
C. Sales account
D. Debt account
ANSWER: A
6. Full fledged money changers are authorized to undertake
A. only sales transactions
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B. only purchase transactions
C. all types of foreign exchange transactions
D. purchase and sales of foreign currency notes, coins and travelers cheques
ANSWER: D
7. Category I of Authorized dealers in India are
A. all scheduled commercial banks in India
B. all public sector banks in India
C. the banks that have been authorized by RBI to deal in foreign exchange
D. Selected financial and other institutions
ANSWER: C
8. The acronym FEDAI stands for
A. Foreign Exchange Dealers Association of India
B. Federal Export Dealers Association of India
C. Fixed Earners Draft Agreement on Interest
D. Foreign Exchange Draft Agreement on Interest
ANSWER: A
9. In India the rates of charges for foreign exchange business to be recovered by banks from their
customers are determined by
A. FEDAI
B. RBI
C. BANKS
D. GOVERNMENT
ANSWER: C
10. An authorized person under FEMA does not include
A. an authorized dealer.
B. an authorized money changer
C. an offshore banking unit
D. an exchange broker
ANSWER: D
11. Amendments of FEMA regulations are communicated by RBI in the form of
A. AD Circulars.
B. AP DIRECT SERIES
C. Circulars
D. . public notices.
ANSWER: B
12. The responsibility for administration of FEMA is vested with
A. RBI
B. Central Governent
C. State government
D. Banks
ANSWER: A
13. The reduction in the value of the currency due to market forces is known as
A. Depreciation
B. Devaluation
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C. Appreciation
D. None of the above
ANSWER: A
14. The anchor currency that was used in the original scheme of IMF was
A. US Dollar
B. Euro
C. Rupee
D. Yen
ANSWER: A
15. Paper currency was used for internal use and gold was used for international settlement under
______________ standard.
A. paper
B. Gold
C. Currency
D. Silver
ANSWER: B
16. The system of fixed peg where adjustments in exchange rates are made periodically is
A. crawling peg.
B. crawling band.
C. horizontal band.
D. independently floating.
ANSWER: A
17. The market forces influencing the exchange rate are not operational under
A. floating exchange rate system
B. speculation attack on the market.
C. fixed exchange rate system.
D. current regulation of IMF
ANSWER: C
18. Under fixed peg arrangement of currency regime
A. domestic currency cannot fluctuate in the market from the official rate
B. domestic currency can fluctuate in the market within narrow band of 1%.
C. currency issue is decided by the currency board.
D. the country pegging its currency should maintain account with the country to whose currency its
currency is pegged
ANSWER: B
19. According to classification by IMF, the currency system of India falls under
A. managed floating.
B. independently floating.
C. crawling peg
D. pegged to basket of currencies
ANSWER: A
20. Under fixed exchange rate system, the currency rate in the market is maintained through
A. official intervention
B. rationing of foreign exchange
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C. centralizing all foreign exchange operations with central bank of the country
D. decentralizing.
ANSWER: A
21. At present the role of IMF in the exchange rate policies of its members is to
A. prohibit floating rate.
B. have surveillance and express opinion on policies
C. restrict the exchange fluctuations within a band.
D. permit free floating exchange rate
ANSWER: B
22. Euro is not a legal tender in the following country
A. Spain.
B. Greece
C. Finland
D. None of the above
ANSWER: D
23. Convertibility of a currency is indicated by its
A. conversion at market rates
B. conversion at market rates, but subject to quantity restriction by government.
C. conversion at market rates without any quantitative restriction by government
D. Conversion at official rates.
ANSWER: C
24. Adjustment of BOP disequilibrium is automatic under
A. floating exchange rate system
B. speculation attack on the market.
C. fixed exchange rate system.
D. current regulation of IMF
ANSWER: A
25. The monetary system where gold coins of a definite weight and fineness circulated as the standard unit
of currency is ______________ standard.
A. gold
B. gold bullion
C. gold currency
D. gold exchange
ANSWER: D
26. Generally imports are recorded at _________ value in BOP
A. FOB
B. CIF
C. ACTUAL COST
D. CFR
ANSWER: B
27. For balance of payment statistics, visible trade refers to trade in
A. goods/ commodities.
B. services.
C. fund inflow.
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D. fund outflow
ANSWER: A
28. A credit in BOP indicates
A. accumulation of bank balances abroad.
B. foreign direct investment received into the country.
C. earnings of foreign exchange by the country
D. earnings of foreign exchange or incurring of liability abroad or decrease in asset abroad
ANSWER: D
29. The current account of the BOP includes
A. unilateral payments
B. portfolio investments
C. short term borrowings
D. long term borrowings.
ANSWER: A
30. A country has a negative balance of trade. It means the balance of payment on the current account
A. should also be negative
B. Should be positive
C. may be positive or negative.
D. Should be same as the balance of trade
ANSWER: D
31. The balance of payment does not include
A. transaction in real assets
B. transaction of financial claims
C. transaction between two non- residents
D. transactions in gold
ANSWER: C
32. Country A imports gold worth USD 100 million for commercial purpose. The transaction will affect
A. current account only
B. capital account only.
C. official reserves only
D. both current and capital account.
ANSWER: A
33. Basic balance in the BOP refers to
A. the balance of payments on the current account
B. the combined balance of the current and the capital account
C. the balance in official reserves account
D. the total of balance of current account and balances on long term items in capital account
ANSWER: D
34. A two month forward contract booked on 25th March will due on
A. 24 May
B. 27 May
C. 30 May
D. None of the above
ANSWER: B
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35. The difference in the bid rate rate and the ask rate in the interbank quotation is called
A. swap points
B. Margin.
C. Spread.
D. Auction
ANSWER: C
36. A transaction in the inter bank market to be executed on the same day is known as
A. spot transaction.
B. Forward transaction
C. Swap deal
D. Cover deal
ANSWER: A
37. Forward margin in the foreign exchange market is also known as
A. swap points
B. Margins
C. spread
D. spot
ANSWER: A
38. Foreign exchange market is considered 24-hour market because
A. it is open all through the day.
B. All transactions are to be settled within 24 hours
C. Due to geographical dispersal at least one market is active at any point of time
D. Minimum 24 hours must lapse before any transaction is settled
ANSWER: C
39. The major players in the foreign exchange market are
A. commercial banks
B. Corporates
C. Exchange brokers.
D. Central bank of the country and the Central Government.
ANSWER: A
40. Speculation in foreign exchange market refers to
A. buying and selling of currencies in large volumes
B. Booking of forward contracts without intention to execute
C. buying and selling in the view to make profits from movements in rates
D. buying and selling with the view to making risk less profits
ANSWER: C
41. Arbitrageur in a foreign exchange market
A. buys when the currency is low and sells when it is high
B. Buys and sells simultaneously the currency with a view to making riskless profit.
C. Sell the currency when he has a receivable in the future.
D. Buys and sells to make advantage of market imperfections
ANSWER: B
42. Hedging transactions is indicated by
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A. transactions in odd amounts
B. Presentation of documentary support
C. Booking of forward contracts without intention to execute.
D. None of the above
ANSWER: D
43. Which of the expansions of abbreviations is correct?
A. CHIPS- Clearing House Interbank Payment System
B. CHAPS- Clearing House American Payment System
C. CHIPS- Chartered House International Payment System
D. CHAPS- Clearing house International Payment System
ANSWER: A
44. Indirect rate in foreign exchange means
A. the rate quoted with the units of home currency kept fixed
B. The rate quoted with the units of foreign currency kept fixed
C. The rate quoted in terms of a third currency
D. None of the above
ANSWER: A
45. Indirect rate of exchange is quoted in India for
A. sale of foreign travelers cheques
B. Sale of rupees travelers cheques
C. Purchase of personal cheques
D. No transactions
ANSWER: D
46. In direct quotation, the unit kept constant is
A. the local currency
B. The foreign currency
C. The subsidiary currency
D. Bank rate
ANSWER: B
47. In Mumbai, US dollar is quoted as under USD 1 = Rs..6725/6875. It means
A. the buying rate is 43.6725 and selling rate is 43.6875
B. the buying rate is 43.6875 and selling rate is 43.6725
C. the dollar is appreciating in value
D. The dollar is depreciating in value
ANSWER: A
48. The maximum buy low sell high is applicable for
A. quotation of pound sterling
B. Indirect rates.
C. Direct rates.
D. US dollars.
ANSWER: C
49. In foreign exchange markets American quotation refers to
A. quotation by a US based bank.
B. Quotation in NewYork foreign exchange market
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C. Quotation in which the value of foreign currency is expressed per US dollar
D. Quotation in which the value of US dollar is expressed per unit of foreign currency
ANSWER: D
50. US dollar was quoted at Rs. 43.25 yesterday and is today quoted at Rs.43.34. It means
A. rupee has appreciated in value
B. Dollar has appreciated in value
C. Either rupee has appreciated in value or dollar has depreciated in value
D. Either rupee has depreciated in value or dollar has appreciated in value
ANSWER: D
51. Under FEMA, the RBI has been authorized to make _____________ to carry out the provisions of the
Act.
A. Rules
B. Regulations
C. Acts
D. None
ANSWER: B
52. Which of the following statement is true?
A. foreign exchange leads to foreign trade
B. foreign trade leads to foreign exchange
C. no foreign exchange is involved in foreign trade
D. there is no link between foreign trade and foreign exchange
ANSWER: B
53. The acronym SWIFT stands for
A. Safety Width in Financial Transactions
B. Society for Worldwide International Financial Transactions
C. Society fro Worldwide Interbank Financial Transactions
D. Swift Worldwide Information for Financial Transactions
ANSWER: C
54. A foreign currency account maintained by a bank abroad is its
A. nostro account
B. vostro account
C. loro account
D. Capital account
ANSWER: A
55. Non- resident bank accounts refer to
A. nostro
B. vostro
C. loro
D. toro
ANSWER: B
56. The number of nostro accounts that can be maintained by a bank in a particular currency is
A. 1
B. 5
C. 6
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D. no limit
ANSWER: D
57. Non- resident bank accounts in India are maintained in
A. Rupees
B. Dollars
C. Euro
D. Yen
ANSWER: A
58. The statutory basis for administration of foreign exchange in India is
A. foreign exchange regulation act, 1973
B. conservation of foreign exchange and prevention of smuggling act
C. foreign exchange management act, 1999
D. exchange Control Manuals
ANSWER: C
59. Restricted money changers are authorized to undertake
A. purchase and sell travelers cheques
B. deal in foreign exchange transactions of all kinds upto a certain limit
C. deal only in currencies approved by RBI
D. purchase foreign travelers cheques and notes and coins.
ANSWER: D
60. FEDAI does not cover
A. hours of business of foreign exchange market
B. Interest for late settlement interbank dealings
C. Forward contract with customers
D. None of the above
ANSWER: D
61. In foreign exchange markets American quotation refers to
A. quotation by a US based bank
B. Quotation in NewYork foreign exchange market
C. Quotation in which the value of foreign currency is expressed per US dollar
D. quotation in which the value of US dollar is expressed per unit of foreign currency.
ANSWER: D
62. Forward margin is
A. the profit on forward contract
B. Commission payable to exchange brokers
C. Difference between the spot rate and the forward rate.
D. Difference between the ask rate and the bid rate.
ANSWER: C
63. When forward dollar is quoted at a discount against Euro, it means
A. spot rates are costlier than forward dollars against Euro.
B. Spot dollars are cheaper than forward dollars against Euro
C. It is advantageous to buy dollar in the forward market
D. It is better to do transactions in Euro than in dollars
ANSWER: A
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64. In the following quote: Spot USD 1=Rs. 45.6500/650 Spot September 100/150 September forward
buying rate for dollar is
A. 45.6800
B. Rs. 45.6600
C. Rs.45.7500
D. USD1220
ANSWER: B
65. In the quotation Spot USD 1= Rs. 45.6500/6600 Spot /Novermber 500/550
A. Spot dollar is at premium
B. Forward dollar is at premium
C. Forward dollar is at discount
D. Spot dollar is at discount.
ANSWER: B
66. Derivatives can be used by an exporter for managing
A. CURRENCY RISK
B. CARGO RISK
C. MARINE RISK
D. SALES RISK
ANSWER: A
67. The term risk in business refers to
A. chance of losing business
B. Chance of making losses
C. Uncertainty associated with expected event leading to losses or gains
D. Threat from competitors
ANSWER: C
68. Derivatives are so called because
A. they are subsidiary products in the market
B. They are derived form combination of different assets
C. Their value is dependent on the value of some other fundamental variable
D. They are traded on derivative exchanges.
ANSWER: C
69. The option period for a forward contract can be for a maximum period of
A. 5 DAYS
B. 21 DAYS
C. 98 DAYS
D. 1 WEEK
ANSWER: B
70. The exchange exposure that does not lead to changes in cash flow is
A. transaction exposure
B. translation exposure
C. Economic exposure
D. none of the above
ANSWER: B
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71. Money market hedging is also called as
A. cross hedging
B. spot market hedging
C. forward market hedging
D. hedging with options
ANSWER: B
72. The method of hedging with another currency, when forward cover is not available in a currency of
exposure is
A. cross hedging
B. spot market hedging
C. forward market hedging
D. hedging with options
ANSWER: A
73. The maximum period for which lagging can be adopted by firms in India is
A. two months.
B. four months.
C. . six months
D. no such limit
ANSWER: C
74. Which of the following statement is true?
A. Exchange exposure leads to exchange risk
B. Exchange risk leads to exchange exposure
C. Exchange exposure and exchange risk are unrelated
D. None of the above
ANSWER: A
75. The net potential gain or loss likely to arise from the exchange rate changes is
A. exchange exposure
B. exchange risk
C. potential risk
D. future risk
ANSWER: B
76. Transaction exposure can be hedged
A. by internal methods only
B. by external methods only
C. either by internal methods or by external methods, but not by both.
D. either by internal methods or by external methods, or combination of both.
ANSWER: D
77. The external method of hedging transaction exposure does not include
A. forward contract hedge
B. money market hedge
C. cross hedging
D. future hedging
ANSWER: C
78. Hedging with options is best recommended for
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A. hedging receivables
B. hedging payables
C. hedging contingency exposure.
D. hedging foreign currency loans
ANSWER: C
79. The term World bank refers to
A. IBRD
B. IMF
C. SWIFT
D. None of the above
ANSWER: A
80. Pegging the value of a currency can be done by
A. pegging to a major currency
B. . pegging to a major basket of currencies
C. pegging to SDR
D. All the above
ANSWER: D
81. CHAPS is similar to CHIPS and available in
A. LONDON
B. US
C. FRANCE
D. NONE
ANSWER: A
82. The big banks in the market is known as
A. markers
B. market makers
C. market leader
D. market kings
ANSWER: B
83. Agreement to buy and sell happens on same day
A. cash transactions
B. spot
C. forward
D. none
ANSWER: A
84. If forward rate is same with spot rate says
A. at par
B. at discount
C. at premium
D. at mean
ANSWER: A
85. premium is ---- to spot rate to arrive forward rate
A. added
B. less
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C. multiply
D. divide
ANSWER: A
86. Discount is ----- from spot rate to arrive forward rate
A. add
B. deduct
C. divide
D. multiply
ANSWER: B
87. ---- in the country will increase domestic prices
A. inflation
B. deflation
C. export
D. import
ANSWER: A
88. Home currency quotation is
A. Indirect
B. direct
C. two way
D. none
ANSWER: B
89. Currency quotation means
A. direct
B. two way
C. Indirect
D. European
ANSWER: C
90. Merchant rate based on
A. base rate
B. basal rate
C. base index
D. base period
ANSWER: A
91. Rate at which banks selling forex---A. merchant rate
B. base rate
C. inter rate
D. buy rate
ANSWER: A
92. TT stands for
A. Telegraphic Transfer
B. Telephonic transfer
C. Template transfer
D. none of the above
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ANSWER: A
93. issue of DD ,the rate applicable is ---A. TT Rate
B. Bills rate
C. DD rate
D. Buy rate
ANSWER: A
94. EEFC stands for
A. Exchange earner's free currency account
B. Exchange earner's foreign currency account
C. Exchange earner's currency account
D. Exchange earner's foreign account
ANSWER: B
95. --- is a merchant rate available in India
A. Bills rate
B. tax rate
C. bid rate
D. none
ANSWER: A
96. The option period for option forward rate should not exceed
A. 1 month
B. 2 weeks
C. 21 days
D. 3 days
ANSWER: A
97. ---- may be booked for exporters and importers without documents
A. forward rate
B. forward contract
C. spot
D. option
ANSWER: B
98. The cost of hedging through options includes
A. option premium
B. interest on option premium till due date of the contract.
C. both (1) & (2) above
D. difference between option price and spot price.
ANSWER: C
99. Internal hedge for transaction exposure does not include
A. exposure netting
B. choosing currency for invoicing
C. cross hedging
D. none of the above
ANSWER: D
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100. An export customer wishes to book a forward contract due on 4th November under which he will be
tendering a US dollar bill payable 30 days from sight. The notional due date that will be considered by the
bank for this transaction will be
A. December 4.
B. December 29.
C. November 29.
D. January 4
ANSWER: B
101. Translation exposure is not relevant in the following cases
A. foreign currency loans availed and outstanding as on the date of balance sheet
B. balance sheet of foreign subsidiary included in the consolidated balance sheet of the parent company
C. balance sheet of the foreign subsidiary annexed to the balance sheet of the parent company
D. investment made by parent company in foreign subsidiary shown as an asset in the balance sheet of
parent company
ANSWER: C
102. Translation exposure arises in respect of item translated at
A. current rate.
B. . historic rate.
C. . average rate.
D. . all the above
ANSWER: A
103. Translation loss is
A. a loss to the parent company.
B. a national loss.
C. a loss to the subsidiary company
D. an actual loss.
ANSWER: B
104. TT selling rate is applicable for the transaction of
A. issue of telegraphic transfers
B. outward remittances other than for remittances of import bill
C. retirement of import bill for which remittance is sent by tt
D. None of these
ANSWER: B
105. For funding the vostro account, the bank in India will apply
A. its tt buying rate
B. interbank spot buying rate
C. its tt selling rate.
D. interbank spot selling rate
ANSWER: B
106. The objective of trading in foreign exchange by a dealer of a bank is to
A. make profit out of exchange rate fluctuations
B. insulate the bank from exchange rate changes
C. comply with exchange control regulation
D. none of the above.
ANSWER: A
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107. India is facing continuous deficit in its balance of payments. In the foreign exchange market rupee is
expected to
A. Depreciate
B. Appreciate
C. devalued
D. none of these
ANSWER: A
108. The effect of speculation on exchange rate is
A. It causes violent fluctuations in exchange rate.
B. It aggravates the market trends.
C. Either or both of 1 and 2.
D. Neither 1 nor 2
ANSWER: C
109. The demand for domestic currency in the foreign exchange market is indicated by the following
transactions in balance of payment
A. Export of goods and services
B. Import of goods and services.
C. Export of goods and services and capital inflows
D. import of goods and services and capital inflows
ANSWER: C
110. Cash and carry arbitrage explains the determination of
A. Forward Rates for currencies
B. Spot rates for currencies
C. Both forward and spot rates for currencies
D. Penalty for non-execution of forward contracts
ANSWER: A
111. A currency future is not
A. Traded on futures exchanges
B. A special type of forward contract
C. Of standard size
D. Available in India.
ANSWER: D
112. Which of the following is not considered a unilateral transfer
A. foreign aid from one government to another
B. personal gifts to friends in foreign countries
C. donations to foreign countries from non-government
D. None of these
ANSWER: A
113. Exchange rate between currency A and currency B, given the values of currencies A and B with
respect to a third currency is known as
A. Golden standard
B. Flexible rate
C. Fixed rate
D. cross rate
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ANSWER: B
114. Difference between buying and selling rates in an exchange rate or interest rate quotation is known as
A. strike rate
B. spot
C. forward
D. spread
ANSWER: D
115. Quotation where the price of one unit of foreign currency is given in terms of local currency units is
called as
A. indirect quotation
B. direct quotation
C. mixed quotation
D. pure quotation
ANSWER: B
116. _______________ is a process of taking advantage of differentials in interest rates of two currencies
while eliminating exchange risk
A. Hedging
B. Insurance
C. Covered Interest Arbitrage
D. Exposure
ANSWER: C
117. India's foreign exchange rate system is
A. Managed float
B. Free float
C. Gold standard
D. Silver standard
ANSWER: A
118. Suppose that the Euro is selling at a forward discount in the forward-exchange market. This implies
that most likely
A. the Euro has low exchange-rate risk
B. the Euro is gaining strength in relation to the dollar
C. interest rates are higher in Europe
D. interest rates are declining in Europe
ANSWER: C
119. The __________ is especially well suited to offer hedging protection against transactions risk exposure
A. forward market
B. spot market
C. transactions market
D. inflation-rate market
ANSWER: A
120. For contingency exposure of foreign exchange, the best derivative that can be used to hedge is
A. Forwards
B. Futures
C. Options
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D. Swaps
ANSWER: C
121. Category III of Authorized dealers in India are
A. all scheduled commercial banks in India
B. all public sector banks in India
C. the banks that have been authorized by RBI to deal in foreign exchange
D. selected financial and other institutions
ANSWER: D
122. The reduction in the value of the currency due to market forces is known as
A. depreciation
B. devaluation
C. appreciation
D. none of the above
ANSWER: A
123. Under the original scheme of IMF, a member country has to obtain permission of IMF for
A. any devaluation of its currency.
B. any devaluation or revaluation of its currency.
C. devaluation of its currency at a time exceeding 10%.
D. devaluation of its currency exceeding cumulative 10%.
ANSWER: D
124. EURO was launched on
A. JAN 1 1998
B. JAN 1 1999
C. MARCH 1 1998
D. JAN 1 2000
ANSWER: B
125. Head quarters of FEDAI
A. MUMBAI
B. CHENNAI
C. BANGALORE
D. TANJORE
ANSWER: A
126. FERA stands for
A. Foreign exchange regulation act
B. Foreign earnings regulation act
C. Foreign export regulation act
D. Finance exchange regulation act
ANSWER: A
127. forex market is an ----- market
A. OTC
B. MTC
C. VTC
D. KTC
ANSWER: A
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128. ------ is the largest financial market in the world
A. mutual fund
B. derivative
C. forex
D. none of these
ANSWER: C
129. In forex transactions the item purchased is -----A. foreign currency
B. domestic currency
C. gold
D. silver
ANSWER: A
130. Bank issues a DD for GBP 500 which is a ---- transaction
A. sales
B. purchase
C. both
D. none
ANSWER: A
131. Customer purchases GBP 500 means a ---- transation
A. purchase
B. sales
C. economic
D. forex
ANSWER: B
132. A traveller encashes cheque for GBP 50 involves
A. purchase
B. sales
C. TT
D. b ills
ANSWER: A
133. If banks part with foreign currency that comes under
A. sales
B. purchase
C. bank
D. TT
ANSWER: A
134. ----- rate is applied when a foreign bill is purchased
A. bill selling rate
B. TT selling
C. TT buying
D. Bill buying rate
ANSWER: D
135. in a ---- bill realisation will be only after 25 days
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A. sight
B. usance
C. term
D. clear
ANSWER: A
136. transit period +due date is applicable for ---- bills
A. sight bill
B. clear bill
C. Usance bill
D. None of these
ANSWER: C
137. Payment against import bills are based on ---- in India
A. Bills selling
B. Bills buying
C. TT selling
D. Fixed rate
ANSWER: A
138. Money market hedge is also known as
A. forward hedge
B. spot market hedge
C. prime hedge
D. none of these
ANSWER: B
139. temporal method is a --- method
A. transaction
B. translation
C. transfer
D. exchange
ANSWER: B
140. Competitive exposure is ----- exposure
A. translation
B. economic
C. transaction
D. cultural
ANSWER: B
141. Market selection is a method to manage ---- risk
A. translation
B. market
C. economic
D. transaction
ANSWER: B
142. Reduction in the value of long term financial asset refers to
A. Capital risk
B. market risk
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C. economic risk
D. none of these
ANSWER: A
143. ----- risk is associated with the change in foreign exchange rate
A. economic risk
B. translation
C. transaction
D. Capital risk
ANSWER: C
144. Prevention of speculation is an advantage of ----- exchange system
A. flexible
B. fixed
C. managed
D. none of these
ANSWER: B
145. For small open economies which exchange rate is good?
A. flexible
B. managed
C. fixed
D. gold rate
ANSWER: C
146. Exchange control is introduced in India in which year
A. 1987
B. 1947
C. 1939
D. 1985
ANSWER: C
147. Remittance out of Lottery winnings is a ---- prohibited transaction
A. prohibited transaction
B. prohibited forex transaction
C. permitted transaction
D. useful transaction
ANSWER: B
148. Retail segment of forex market consists of----A. Commercial banks
B. authorised shops
C. investment funds
D. none of these
ANSWER: B
149. In most of the forex market --- is the vehicle currency
A. Dollar
B. Rupee
C. YEN
D. Riyal
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ANSWER: A
150. The largest foreign exchange market is ----A. London
B. India
C. Japan
D. Australia
ANSWER: A
Staff Name
SHANY .
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