MCQs on Foreign Exchange Management - 10

1. Exchange rate between currency A and currency B, given the values of currencies A and B with respect to a third currency is known as  

(A) Golden standard 
(B) Flexible exchange rate 
(C) Fixed exchange rate 
(D) Cross exchange rate A

2. Agreement to exchange one currency for another at a specified exchange rate and date is 

(A) Currency swap 
(B) Swap points 
(C) Currency put option 
(D) Currency call option

3. Long– term securities denominated in two currencies is called as 

(A) Euro bond 
(B) Dual – currency bonds 
(C) Foreign bonds 
(D) Euro dollar deposit.

4. Foreign exchange transactions involve monetary transactions 

(A) among residents of the same country 
(B) between residents of two countries only 
(C) between residents of two or more countries 
(D) among residents of at least three countries

5. A foreign currency account maintained by a bank abroad is its 

(A) nostro account 
(B) vostro account 
(C) loro account 
(D) foreign bank account

6. Non-resident Bank Accounts’ refer to

(A) nostro account 
(B) vostro account 
(C) accounts opened in offshore centers 
(D) foreign bank account

7. The number of nostro accounts that can be maintained by a bank in a particular currency is 

(A) One 
(B) not exceeding three 
(C) minimum two 
(D) no such limit

8. Full fledged money changers are authorized to undertake 

(A) only sale transactions 
(B) only purchase transactions 
(C) all types of foreign exchange transactions 
(D) purchase and sale of foreign currency notes, coins and travelers cheques

9 . IMF augments its resources by borrowing under 

(A) General arrangements to borrow 
(B) New arrangements to borrow 
(C) Trust funds 
(D) All the above

10. The abbreviations SDR stands for 

(A) Special Drawing Rights 
(B) Specific Drawing Rights 
(C) Special Depository Rules 
(D) Specific Depository Rules

More MCQs on Foreign Exchange Management



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