Top 150+ Solved Advanced Financial Management 2 MCQ Questions Answer
Q. An option to buy is called a _______
a. Put Option
b. Bid Option
c. Call Option
d. Preemptive Option
Q. ‘Speculators’ in the market _______________
a. Need foreign currency to pay their import obligations
b. Invest in securities of foreign country
c. Try to profit from exchange rate movements
d. None of the Above
Q. Which one of the following is NOT a Foreign Exchange Risk Management Technique
a. Forward Contract
b. Futures Contract
c. External Commercial Borrowing
d. Currency Options
Q. Default risk is higher in which one of the following?
a. Forward Contracts
b. Futures Contracts
c. Equal in both a and b
d. None of the Above
Q. A financial instrument that provides its holder a right but no obligation to buy or sell a pre-specified amount of a foreign currency at a pre-determined rate is referred to as ____________
a. A Promise
b. An Option
c. An Obligation
d. A Swap
Q. Establishment of new plants and offices overseas by MNC as a mean of FDI is
a. A Greenfield Investment
b. A Brownfield Investment
c. Vertical FDI
d. None of the Above
Q. Hilton Hotels of United States opening a hotel in Mumbai, India is ____________
a. A Horizontal FDI
b. A Vertical FDI
c. A Conglomerate FDI
d. None of the Above
Q. There are basically two approaches to find out NPV of a foreign based project’s capitalbudgeting exercise. Which are those two?
a. Home Currency and foreign currency approaches
b. One Currency and Multi Currency Approaches
c. Home Country and Foreign Country Approaches
d. None of the Above
Q. If there are no costs or other barriers associated with the movement of goods or services across countries, the price of each product should be the same in each country, after making appropriate currency conversions. It is called ____________ in Economics.
a. Law of Similar Mortgage Rate
b. Law of Similar Labour Rules
c. Law of One Price
d. Law of One type of Manufacturing
Q. The current spot rate for the Euro is Rs. 86,the expected inflation rate is 5 in India and 3in Europe. What is the expected Spot Rate of Euro one year hence?
a. Rs. 87.67/Euro
b. Rs. 84.36/Euro
c. Rs. 86/Euro
d. Rs. 93/Euro
Q. When an Option can be exercised on any date up to maturity, it is called
a. A Flexible Option
b. An European Option
c. A British Option
d. An American Option
Q. Capital investment made by firms in another county is called______
a. Foreign Direct Investment
b. Foreign Direct Involvement
c. Foreign Debt Investment
d. None of he Above