Top 150+ Solved International Business MCQ Questions Answer
Q. By definition, currency appreciation occurs when
a. the value of all currencies falls relative to gold.
b. the value of all currencies rises relative to gold.
c. the value of one currency rises relative to another currency.
d. the value of one currency falls relative to another currency
Q. Hedging is used by companies to:
a. decrease the variability of tax paid
b. decrease the spread between spot and forward market quotes
c. increase the variability of expected cash flows
d. decrease the variability of expected cash flows
Q. Exchange rates
a. are always fixed
b. fluctuate to equate the quantity of foreign exchange demanded with the quantity supplied
c. fluctuate to equate imports and exports
d. fluctuate to equate rates of interest in various countries
Q. If the U.S. dollar appreciates relative to the British pound,
a. it will take fewer dollars to purchase a pound
b. it will take more dollars to purchase a pound
c. it is called a weakening of the dollar
d. both a & c
Q. A floating exchange rate
a. is determined by the national governments involved
b. remains extremely stable over long periods of time
c. is determined by the actions of central banks
d. is allowed to vary according to market forces
Q. In a quote exchange rate, the currency that is to be purchase with another currency is called the
a. liquid currency
b. foreign currency
c. local currency
d. base currency
Q. An economist will define the exchange rate between two currencies as the:
a. amount of one currency that must be paid in order to obtain one unit of another currency
b. difference between total exports and total imports within a country
c. price at which the sales and purchases of foreign goods takes place
d. ratio of import prices to export prices for a particular country
Q. India is facing continuous deficit in its balance of payments. In the foreign exchange marketrupee is expected to
a. depreciate.
b. appreciate.
c. show no specific tendency.
d. depreciate against currencies of the countries with positive balance of payment and appreciate against
Q. The demand for domestic currency in the foreign exchange market is indicated by the followingtransactions in balance of payment
a. export of goods and services
b. import of goods and services.
c. export of goods and services and capital inflows.
d. import of goods and services and capital outflows.
Q. The price at which a market maker is prepared to buy (a currency) or borrow (money) is termed as
a. spot rate
b. bid rate
c. ask price
d. forward rate
Q. The __________ is especially well suited to offer hedging protection against transactions risk exposure.
a. forward market
b. spot market
c. transactions market
d. inflation-rate market
Q. Difference between buying and selling rates in an exchange rate is known as
a. strike price
b. spread
c. swap points
d. spot rate
Q. Exchange rate between currency A and currency B, given the values of currencies A and B with respect toa third currency is known as
a. golden standard
b. flexible exchange rate
c. fixed exchange rate
d. cross exchange rate
Q. The swap arrangement where principal amounts are not exchanged, but periodical payments will be
a. currency swap
b. cross currency interest swap
c. interest rate swap.
d. non-financial swap.
Q. What is FEMA?
a. first exchange management act
b. foreign exchequer management act
c. foreign exchange management act
d. d)foreign evaluation management act