International Finance And Treasury - Practice Test

[#551] Match the following. List-I List-II a. Forward 1. Exchange b. Future 2. No obligation c. Option 3. OTC

(A) a-1, b-3, c-2

(B) a-1, b-2, c-3

(C) a-3, b-1, c-2

(D) a-3, b-2, c-1

Correct Answer

(C) a-3, b-1, c-2

[#552] When a direct quote of the home currency or any other currency is not available in the forex market, it is computed with the help of exchange quotes of others pairs of currencies, is referred to by which one of the following?

(A) Cross rate

(B) Arbitrage rate

(C) Transaction rate

(D) Translation rate

Correct Answer

(A) Cross rate

[#553] Purchasing power parity theory signifies which one of the following?

(A) Ability to exchange one currency for another at a given conversion rate and in terms of the usability of a currency for foreign transactions

(B) Which states that exhange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries

(C) When one party of an economic transaction has equal degree of information in currency market abdilt it and shared equally to arrive at uniform foreign exchange selection decision

(D) No one party can significantly influence foreign exchange rate in the market and all will be guided by asymmetric information

Correct Answer

(B) Which states that exhange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries

[#554] Which of the following statements are correct? 1. A put option is said to bein the money or favourable for the option holder when the strike price is higher than the spot price. 2. A put option is said to be out of money when the strike price is lower than the market price. 3. Fir an option writer the maximum gain is the amount of premium received by the put option holder.

(A) Both 1 and 2

(B) Both 1 and 3

(C) Both 2 and 3

(D) All of the above

Correct Answer

(B) Both 1 and 3

[#555] Which of the following statement is true about international capital market?

(A) Limits available set of lending opportunities

(B) Increases overall portfolio risk for investors

(C) Allows investors to reduce risk by holding international securities whose price move independently

(D) It is easily accessible to everyone

Correct Answer

(C) Allows investors to reduce risk by holding international securities whose price move independently

International Finance And Treasury - Study Mode

[#551] Match the following. List-I List-II a. Forward 1. Exchange b. Future 2. No obligation c. Option 3. OTC

Correct Answer

[#552] When a direct quote of the home currency or any other currency is not available in the forex market, it is computed with the help of exchange quotes of others pairs of currencies, is referred to by which one of the following?

Correct Answer

[#553] Purchasing power parity theory signifies which one of the following?

Correct Answer

Correct Answer

[#555] Which of the following statement is true about international capital market?

Correct Answer