Previous Year Solved Question Papers

Previous Year Solved Question Papers

MCQs on Foreign Exchange Management - 4

1. The EU is the major provider of FDI for: 

(A) Eastern Europe. 
(B) South America. 
(C) developing Asian countries 
(D) all of these regions.



2. Markets in which funds are transferred from those who have excess funds available to those who have a shortage of available funds are called 

(A) commodity markets. 
(B) fund-available markets. 
(C) derivative exchange markets. 
(D) financial markets.


3. Increasing interest rates 

(A) discourage corporate investments. 
(B) discourage individuals from saving. 
(C) encourage corporate expansion. 
(D) encourage corporate borrowing.



4. Which of the following is not considered a unilateral transfer? 

(A) foreign aid from one government to another 
(B) income earned from foreign investments 
(C) personal gifts to friends in foreign countries 
(D) donations to foreign countries from non-government


5. An increase in the current account deficit will place _______ pressure on the home currency value, other things equal 

(A) upward. 
(B) downward 
(C) no 
(D) upward or downward



6. Which of the following would likely have the least direct influence on a country's current account? 

(A) Inflation. 
(B) National income. 
(C) Exchange rates 
(D) A tax on income earned from foreign stocks


7. The primary component of the current account is the: 

(A) balance of trade. 
(B) balance of money market flows 
(C) balance of capital market flows 
(D) unilateral transfers.


8. The WTO Agreement related to investment measures is: 

(A) TRIPS. 
(B) TRIMS. 
(C) GATS. 
(D) TCA.



9. CIF stands for 

(A) Cost, interest, freight 
(B) Cost, income, freight 
(C) Cost, insurance, freight 
(D) Customs, insurance, freight



10. Exposed assets are those translated at 

(A) Historical rate. 
(B) Average rate. 
(C) Current rate. 
(D) Current rate or average rate.





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