Deck 2: Foreign Exchange and Currency

Question 1

An account which is held within a domestic country by a foreign bank, in a currency of domestic country is known as account

A)loro
B)nostro
C)vostro
D)swift

Answer 1

vostro

Question 2

SBI A/c with HSBC in UK is an example of

A)loro
B)nostro
C)vostro
D)swift

Answer 2

nostro

Question 3

Inverse quote for USD/DKK 5.7935 - 5.8085 is ____________    

A)dkk/usd 0.1722 - 0.1726
B)usd/dkk 0.1722 - 0.1726
C)dkk/usd 0.1726 - 0.1722
D)usd/dkk 0.1726 - 0.1722

Answer 3

dkk/usd 0.1722 - 0.1726

Question 4

100 INR/JPY is an indirect quote for ____________  

A)india
B)japan
C)us
D)china

Question 5

The quote 1 GBP = INR 99.85 is a direct quote for .

A)india
B)britain
C)us
D)china

Question 6

In Holgate's principle, if Bid > Ask, Swap points of forward rate are to be

A)added
B)subtracted
C)multiplied
D)divided

Question 7

__________is the smallest unit by which a currency quotation can change.

A)pip
B)bid
C)ask
D)spread

Question 8

If spot USD/INR is 50, and six months forward rate is 51 then AFM is ____________

A)1%
B)4%
C)2%
D)3%

Question 9

____________is a market where foreign currencies are bought & sold.

A)stock market
B)forex market
C)capital market
D)debt market

Question 10

____________Theory states that the exchange rate between currencies of two countries should be equal to the ratio of the countries price levels.

A)irp
B)ppp
C)fishers
D)marshalls

Question 11

If formula I of Fishers effect is positive, borrow ____________and invest in .

A)foreign, home
B)foreign, foreign
C)home, home
D)home, foreign

Question 12

____________      is a standardized contract to exchange one currency for another at a

A)futures contract
B)options contract
C)swaps
D)forward contract

Question 13

Foreign currency forward market is ____________        

A)over the counter unorganized market
B)organised market without trading
C)organised, listed market
D)unorganised listed market

Question 14

An option giving the buyer of the option the right to buy but not an obligation to buy a currency is called ____________  

A)call option
B)put option
C)forward option
D)futures option

Question 15

____________    contacts are bilateral contracts.

A)forward
B)futures
C)options
D)swaps

Question 16

____________    bond is issued in a local market by a foreign borrower, denominated in local currency

A)foreign bond
B)euro bond
C)domestic bond
D)euro credit

Question 17

____________  is a negotiable instrument issued by a US bank, representing non-US company stock, trading on the US stock Exchange.

A)adr
B)gdr
C)idr
D)euro bonds

Question 18

____________  is a negotiable instrument issued by an international depository bank, representing a foreign company stock, trading on global stock Exchanges.

A)adr
B)gdr
C)idr
D)euro bonds

Question 19

In ADR/GDR process, _ issues depository receipts in foreign markets.

A)custodian bank
B)depository bank
C)issuing company
D)lead manager

Question 20

____________was introduced at a time when forex reserves of the country were low.

A)fera
B)fema
C)gatt
D)exim

Question 21

____________can authorize a person/company to deal in foreign exchange.

A)sebi
B)rbi
C)irda
D)parliament

Question 22

____________  frames rules and guidelines for Forex Business in India

A)rbi
B)sebi
C)irda
D)fedai

Question 23

If IRR > WACC, then the Project must be ____________      

A)accepted
B)rejected
C)discarded
D)reviewed