MCQs on Foreign Exchange Management - 12

1. The price at which a market maker is prepared to sell (a currency) or lend (money) 

(A) forward rate 
(B) sport rate 
(C) bid rate 
(D) offer rate

2. Bretton woods agreement arrived at in 

(A) July 1994 
(B) July 1954 
(C) June 1960 
(D) June 1964

3. A contract that gives the buyer the right to buy commodity or a foreign currency from the seller at a fixed price is called as 

(A) put option 
(B) call option 
(C) cross option 
(D) currency swap 

4. CIF stands for 

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

5. The market where long term securities (shares, bonds, etc) are bought and sold is called as 

(A) money market 
(B) capital market 
(C) primary market 
(D) secondary market

6. A bank located usually in another country that provides service for another bank is 

(A) Foreign bank
(B) Central bank 
(C) Correspondent bank 
(D) World bank

7. _______________ is a process of taking advantage of differentials in interest rates of two currencies while eliminating exchange risk. 

(A) Hedging 
(B) Insurance 
(C) Covered – Interest Arbitrage 
(D) Exposure

8. Quotation where the price of one unit of foreign currency is given in terms of local currency units is called as 

(A) Indirect quotation 
(B) Direct quotation 
(C) Open-ended quotation 
(D) Close – ended quotation

9. FOB stands for 

(A) Freight on board 
(B) Free on board 
(C) Flexible on board 
(D) Future on board

10. An operation in order to protect the domestic currency value of an asset or a liability that is denominated in foreign currency is called as 

(A) Hedging 
(B) Hermes 
(C) Indexation 
(D) Leading

More MCQs on Foreign Exchange Management



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