International Finance Objective Question and Answer
International Finance MCQ Multiple Choice Questions - Page 2 for Practice
31. The Bretton Woods accord
Correct Answer is: of 1944 formulated a new international monetary system after the collapse of the gold standard
32. The current system of international finance is a
Correct Answer is: managed float exchange rate system
33. The date of settlement for a foreign exchange transaction is referred to as:
Correct Answer is: Value date
34. The difference between the value of a call option and a put option with the same exercise price is due primarily to:
Correct Answer is: The differential between the current stock price and the exercise price in present value terms
35. The exchange rate is the
Correct Answer is: price of one countrys currency in terms of another countrys currency
36. The impact of Foreign exchange rate on firm is called as
Correct Answer is: Operating Exposure
37. The potential for an increase or decrease in the parents net worth and reported net income caused by a change in exchange rates since the last consolidation of international operations is a reflection of:
Correct Answer is: Translation exposure
38. The Purchasing Power Parity (PPP) theory is a good predictor of
Correct Answer is: the long-run tendencies between changes in the price level and the exchange rate of two countries
39. The Purchasing Power Parity should hold:
Correct Answer is: Under a flexible exchange rate regime
40. Under a gold standard
Correct Answer is: a nations currency can be traded for gold at a fixed rate
41. When an enterprise has an unhedged receivable or payable denominated in a foreign currency and settlement of the obligation has not yet taken place, that firm is said to have:
Correct Answer is: Transaction exposure
42. Which of the following is NOT a criticism of a flexible exchange rate system?
Correct Answer is: Under flexible exchange rates, trading countries tend to rely more heavily upon tariffs and other restrictions
43. Which of the following is not a type of foreign exchange exposure?
Correct Answer is: Tax exposure
44. Which of the following is not an interest rate derivative used for interest rate management?
Correct Answer is: All of the above are interest rate derivatives
45. Which of the following is true of foreign exchange markets?
Correct Answer is: The futures market is mainly used by speculators while the forward market is mainly used for hedging.
46. Which of the following may be participants in the foreign exchange markets?
Correct Answer is: All of the above
47. Which of the methods below may be viewed as most effective in protecting against economic exposure?
