International Finance And Treasury - Practice Test

[#616] The most liquid asset among the following is?

(A) Gold

(B) Share

(C) Cash

(D) Land

Correct Answer

(C) Cash

Explanation

Solution: Cash is a highly liquid asset followed by the banking accounts, checkable account, short-term promissory notes, treasury bills and other government bonds.

[#617] In international financial environment for settlement of debts there is a practice known as netting practice. The netting practice pertains to which one of the following?

(A) A practice by which subsidiaries of affiliates within the TNC network settle inter-subsidiary debts for the net amount owed during the post-transaction period

(B) A practice involving the sale of export accounts receivable to a third party within the TNC network

(C) A practice of purchasing an account receivable where the credit term exceeds the permissible limit within the TNC network

(D) Where the difference between international transaction of gross capital account receivables and payables are settled against current account receivables and payables

Correct Answer

(A) A practice by which subsidiaries of affiliates within the TNC network settle inter-subsidiary debts for the net amount owed during the post-transaction period

[#618] Which of the following is false?

(A) Futures contracts are more liquid than forward contracts

(B) Futures contracts trade on a financial exchange

(C) Futures contracts are marked to market

(D) Futures contracts allow fewer delivery options than forward contracts

Correct Answer

(D) Futures contracts allow fewer delivery options than forward contracts

[#619] The given statements are related to financial derivatives. Choose the correct answer for the statements being correct or incorrect. Statement I A speculator will gain, if he sells foreign currency under a forward contract, when the spot price is higher than the forward price. Statement II In currency futures, intra currency spread exists when a speculator buys/sells the same currency for two delivery dates.

(A) Statement I is correct, but Statement II is incorrect

(B) Statement II is correct, but Statement I is incorrect

(C) Both statement are correct

(D) Both statements are incorrect

Correct Answer

(B) Statement II is correct, but Statement I is incorrect

[#620] Which of the following is not a feature of IFM?

(A) IFM faces foreign exchange exposure

(B) IFM works in perfect market situations

(C) IFM deals with expanding operation sets of the company

(D) IFM incorporates political risk

Correct Answer

(A) IFM faces foreign exchange exposure

International Finance And Treasury - Study Mode

[#616] The most liquid asset among the following is?

Correct Answer

Explanation

[#617] In international financial environment for settlement of debts there is a practice known as netting practice. The netting practice pertains to which one of the following?

Correct Answer

[#618] Which of the following is false?

Correct Answer

Correct Answer

[#620] Which of the following is not a feature of IFM?

Correct Answer