International Finance Objective Question and Answer
International Finance MCQ Multiple Choice Questions - Page 3 for Practice
International Finance MCQ Questions 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.
