True/False: List of Attempted Questions and Answers
True/False: List of Attempted Questions and Answers
True/False: List of Attempted Questions and Answers
True/False
Question In an interest rate swap if the payment schedules are identical,
only diffrence between the two payments is delivered.
Correct Answer True
Correct Answer Verify the suitable documentary evidence, and that the customer
is exposed to risk , Ensure that a genuine transaction exists
Your Answer Verify the suitable documentary evidence, and that the customer
is exposed to risk , Ensure that a genuine transaction exists ,
Protect the customer fully from exchange risk
Correct Answer Which are convertible , Which have liquidity confirmed in Euro
market operations
Your Answer Which are convertible , Which have liquidity confirmed in Euro
market operations , Which have greater intrinsic value
True/False
Question Resident Individuals in India can acquire foreign bonus shares
on the foreign securities already held by them without prior
approval of RBI
Correct Answer True
True/False
Question Head office of ICC is in Paris because of its First President
Eliance Clementel.
Correct Answer True
Correct Answer Interest rates are changing, Interest rates affect and are affected
by exchange rates
Your Answer Interest rates are changing, Interest rates affect and are affected
by exchange rates
True/False
Question Normally the forward contracts are booked for making huge
profits.
True/False
Question Bridge Loans are granted for construction of large size bridges,
and flyovers.
Correct Answer False
True/False
Question An Indian importing goods from USA pays dollars in India.
Your Answer Purchase and sell foreign currency notes and travellers cheques
Making market Quoting rate for both Quoting rate for both
buying and selling a buying and selling a
currency currency
Spread Price difference between Market of currency outside
bid and offer home country
True/False
Question Import finance is nomally available at rates of interest cheaper
than domestic finance rates.
Correct Answer False
True/False
Question The Negotiating bank examines the documents submitted by the
seller and makes payment if they comply the terms and
conditions of the LC.
Correct Answer True
True/False
Question Bid rate is bidders buying rate and offered rate is bidders selling
rate.
Correct Answer True
True/False
Question Charter party bills of lading are generally not acceptable to
bankers as security because Sea Charters are full of problems.
Correct Answer True
Correct Answer Risk of events in a particular country which may cause loss to a
person dealing with that country
Your Answer Risk of events in a particular country which may cause loss to a
person dealing with that country
True/False
Question Installment credit is issued for specific quantities of goods to be
shipped every week or month.
Correct Answer True
True/False
Question The Prominent non banking financial institutions participating in
the FOREX markets are Pension funds, mutual funds, insurance
Cos.
Correct Answer True
True/False
Question The Euro Commercial paper is supported by a team-syndicated
credit with both sides of the transaction combined into one
operation.
Correct Answer True
True/False
Question Long in futures means a commitment to sell futures at a future
date.
Correct Answer False
Your Answer 5
Correct Answer Give Softloans to poorer countries in Asia , Give project finance
from resources raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance
from resources raised in world capital market , Borrow from
World Bank and lend to other countries
Correct Answer Swap contract exchange of fixed rate payment system for a
floating rate system
Your Answer Swap contract exchange of fixed rate payment system for a
floating rate system
True/False
Question Both futures and options are traded on a public exchange.
True/False
Question Multimodal transport document is also known as
"IntermobileTransport Document"
Correct Answer True
Correct Answer Underlying asset price , Time before expiration, rate of interest
Your Answer Underlying asset price , Time before expiration, rate of interest ,
The Performance of the Exchange handling the option
True/False
Question In an already booked forward contract, a person may seek early
delivery, extension in period, or cancellation.
Correct Answer True
True/False
Question Cross currency forward contract is not meaningful if original
contract is in Rupees to USD
Correct Answer True
True/False
Question Proposal for Investment abroa by Indian not falling under
automatic route are submitted to Exchange Control Department
of RBI.
Correct Answer True
Correct Answer Plus or minus movement of exchange rate around the parity rate
Your Answer Plus or minus movement of exchange rate around the parity rate
True/False
Question An AD can book a forward contract for a part of the amount of
Sale Contract
Correct Answer True
True/False
Question Corporates are allowed to raise funds abroad up to $ 15 million
as short term finance if they have EPCG license.
Correct Answer True
True/False
True/False
Question Transfer of funds for investment abroad is allowed freely.
Correct Answer Price established by the clearing house at the end of each
trading session , It is used to determine the net gain, loss,
margin call and next days price limits
Your Answer Price established by the clearing house at the end of each
trading session , It is used to determine the net gain, loss,
margin call and next days price limits , It is the same as strike
price
Correct Answer Trader who is neither hedger nor arbitragor , He takes risks for
profit
Your Answer Trader who is neither hedger nor arbitragor , He takes risks for
profit , He buys or sells to hedge his risk
True/False
Question Tranche' is a managed issue of securities in smaller
denominations.
Correct Answer True
Correct Answer Faith money deposited by buyers and sellers ensures liquidity ,
Margin ensures solvency for honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity ,
Margin ensures solvency for honouring contracts , Given by
buyer or seller as commission
Your Answer Guarantee for Bid bond, execution of export project, for
borrowings abroad, for retention of money , Advance payment
Guarantee, performance guarantee , Letter of credits
True/False
Question There is no difference between CIP and CIF contracts except the
mode of transportation.
Correct Answer True
True/False
Question FEDAI does not require RBI permission to frame and revise
rules of business
Correct Answer False
Your Answer Arrange to give loans and subsidies to the projects in poor
countries
True/False
Question Terms in an Irrevocable credit can not be alterred at all.
True/False
Question In a coupon swap the receiver is the one who receives fixed rate
of interest.
Correct Answer True
True/False
Question The working of the IBRD and IMF in recent has blurred the
difference between the two
Correct Answer True
Correct Answer It represents title to goods , It is issued under Sale of Goods act
Your Answer It represents title to goods , It is issued under Sale of Goods act ,
It is issued under Transportation act
Correct Answer Payment of hotel bills abroad, payment for expenses on Heart
operation abroad , Payment to EOUs in India for services
rendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heart
operation abroad , Payment to EOUs in India for services
rendered by them
True/False
Question Cause of increase in cost of public issues Underwriting fees ,
selling commission
Correct Answer True
Correct Answer One which has been derived from other fundamental instruments
Your Answer One which has been derived from other fundamental instruments
True/False
Question Charter party bills of lading are generally not acceptable to
bankers as security because Sea Charters are full of problems.
Correct Answer True
True/False
Question The Option period in the forward contract is at the option of the
Banker, hence the bank has to be very conservative in quoting
rates.
True/False
Question Installment credit is issued for specific quantities of goods to be
shipped every week or month.
Correct Answer True
True/False
Question In developed markets, speculators play important role in
determining the trend of currency rates.
Correct Answer True
True/False
Question In a coupon swap the receiver is the one who receives fixed rate
of interest.
Correct Answer True
Correct Answer It is not considered by the banks as a good security for financing.
Your Answer It is not considered by the banks as a good security for financing.
Correct Answer Floating rate notes, bonds, debentures , Syndicate loans, issue
of shares
Your Answer Floating rate notes, bonds, debentures , Syndicate loans, issue
of shares
True/False
Question PP Form is required when exports are made to any country by
post parcel on value payable basis.
Correct Answer False
True/False
Question Postal receipt is an acknowledgement of receipt of goods, a
quasi negotiable instrument.
Correct Answer False
Correct Answer It represents title to goods , It is issued under Sale of Goods act
Your Answer It represents title to goods , It is issued under Sale of Goods act
True/False
Question Transfer of funds for investment abroad is allowed freely.
Correct Answer Gilts offer higher attractive margin , Choice of issuing medium
term and long term bonds
Your Answer Gilts offer higher attractive margin , Choice of issuing medium
term and long term bonds
Correct Answer Plus or minus movement of exchange rate around the parity rate
Your Answer Plus or minus movement of exchange rate around the parity rate
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Your Answer Post shipment credit , Duty Draw back , Preshipment credit
True/False
Question Bridge Loans are granted for construction of large size bridges,
and flyovers.
Correct Answer False
Correct Answer Foreign yen bonds issued to non resident entities in Japanese
Market
Your Answer Foreign yen bonds issued to non resident entities in Japanese
Market
Making market Quoting rate for both Quoting rate for both
buying and selling a buying and selling a
currency currency
Spread Price difference between Price difference between
bid and offer bid and offer
True/False
Question Bid rate is bidders buying rate and offered rate is bidders selling
rate.
Correct Answer True
True/False
Question An Indian party which has made direct investment abroad has to
submit a annual performance report in form ARP-1 to RBI.
Correct Answer False
Correct Answer The exercise or strike price, the amount , The expiration date
and time, the method of payment
Your Answer The exercise or strike price, the amount , The expiration date
and time, the method of payment
Your Answer The goods are put on board a ship for shipment
True/False
True/False
Question Normally the forward contracts are booked for making huge
profits.
Correct Answer False
Correct Answer Give Softloans to poorer countries in Asia , Give project finance
from resources raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance
from resources raised in world capital market
Your Answer To weed out unviable projects and rank profitable ones
True/False
Question Yankee bond is issued for domestic borrowers.
True/False
Question An Indian importing goods from USA pays dollars in India.
True/False
Question ADR Level I, is the final step to enter US erquity market.
True/False
Question Corporates are allowed to raise funds abroad up to $ 15 million
as short term finance if they have EPCG license.
Correct Answer True
Correct Answer The exercise price is below the spot price for a call option , The
exercise price is above the spot price for a put option
Your Answer The exercise price is below the spot price for a call option , The
exercise price is above the spot price for a put option
True/False
Question In an already booked forward contract, a person may seek early
delivery, extension in period, or cancellation.
Correct Answer True
Correct Answer Trader who is neither hedger nor arbitragor , He takes risks for
profit
Your Answer Trader who is neither hedger nor arbitragor , He takes risks for
profit
True/False
Question The credit rating of World Bank is high in the world Capital
market because it operates at the debt equity ratio of 1:2
Correct Answer False
True/False
Question Country risk analysis is a futile exercise in the background of
cost of analysis.
Correct Answer True
Your Answer Following Tuesday if it is a working day in all the three centers
Correct Answer Through Rule like "Full value of Export bills must be realised in
180 days," , Through Rule like " Export must be denominated In
a currency of the Importing country or a freely convertible
Your Answer Through Rule like "Full value of Export bills must be realised in
180 days," , By Issuing a Export Code Number, and monitoring
his exports through returns and statements filed by him
True/False
Question The Option period in the forward contract is at the option of the
Banker, hence the bank has to be very conservative in quoting
rates.
Correct Answer False
Your Answer 50
True/False
Question In a coupon swap the receiver is the one who receives fixed rate
of interest.
Correct Answer True
True/False
Question PP Form is required when exports are made to any country by
post parcel on value payable basis.
Correct Answer False
Your Answer It represents title to goods , It is issued under Sale of Goods act
True/False
Question Sterling FRNs are issued in Europe, USA ,Asia
Your Answer Purchase and sell foreign currency notes and travellers cheques
True/False
Correct Answer One which has been derived from other fundamental instruments
Your Answer One which has been derived from other fundamental instruments
True/False
Question Cross currency forward contract is not meaningful if original
contract is in Rupees to USD
Correct Answer True
Correct Answer The exercise or strike price, the amount , The expiration date
and time, the method of payment
Your Answer The exercise or strike price, the amount , The expiration date
and time, the method of payment , The Market report of the
exchange which trades the option
True/False
Question Postal receipt is an acknowledgement of receipt of goods, a
quasi negotiable instrument.
Correct Answer False
True/False
Question The Prominent non banking financial institutions participating in
the FOREX markets are Pension funds, mutual funds, insurance
Cos.
Correct Answer True
Correct Answer Faith money deposited by buyers and sellers ensures liquidity ,
Margin ensures solvency for honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity ,
Margin ensures solvency for honouring contracts
True/False
Question If ERD > IRD hen exporter should availa Rupee finance
Correct Answer Payment of hotel bills abroad, payment for expenses on Heart
operation abroad , Payment to EOUs in India for services
rendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heart
operation abroad , Payment to EOUs in India for services
rendered by them
True/False
Question Funding Options in domestic yen market are Futures, FRAs, Call
and put options.
Correct Answer True
True/False
Question There is no difference between CIP and CIF contracts except the
mode of transportation.
Correct Answer True
True/False
Question The volume of trading of Derivatives in the world trade market is
growing but still only 5% of the total.
Correct Answer False
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Correct Answer Which are convertible , Which have liquidity confirmed in Euro
market operations
Your Answer Which are convertible , Which have liquidity confirmed in Euro
market operations , Which have greater intrinsic value
Correct Answer Give Softloans to poorer countries in Asia , Give project finance
from resources raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance
from resources raised in world capital market
Your Answer To weed out unviable projects and rank profitable ones
Correct Answer Prices of capital market instruments change and are expected to
change drastically
Your Answer Prices of capital market instruments change and are expected to
change drastically
True/False
Question JV means Joint venture and WOS means World of Security.
Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a
market intelligence cell to study and monitor developments in Forex Market
Your Answer Clearing house for settlement and clearance for the operations of Ads , Make
additional foreign currency available to ADs at cheaper rates
True/False
Question Cross currency forward contract is not meaningful if original contract is in Rupees to
USD
Correct Answer True
Correct Answer The exercise or strike price, the amount , The expiration date and time, the method
of payment
Your Answer The exercise or strike price, the amount , The expiration date and time, the method
of payment , The Market report of the exchange which trades the option
Intolerable risk Drop the investment project Drop the investment project
Country risk analysis Cost of evluation does not justify Cost of evluation does not justify
analysis analysis
Stock market analysis Banks are ahead Factors' values
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the
country
Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the
country
Maturity of future Time when actual commodity is Last date of exercising option
delivered
Note issuance facility Euronotes Euronotes
True/False
Question Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable
instrument.
Correct Answer False
True/False
Question The Prominent non banking financial institutions participating in the FOREX markets
are Pension funds, mutual funds, insurance Cos.
Correct Answer True
Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures
solvency for honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures
solvency for honouring contracts
Correct Answer By underwriting bank to support funding for a certain period, against which
borrowers can issue short term papers
Your Answer Which enables the investor to market the same in the secondary market
Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad
Your Answer Preshipment credit up to six months for construction and turnkey projects abroad
Your Answer Sharing risk of Non payment by the Syndicate of Banks giving loans
True/False
Question If ERD > IRD hen exporter should availa Rupee finance
Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an
undertaking given on behalf of a certain person to another person in different
country
Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an
undertaking given on behalf of a certain person to another person in different
country
Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,
Payment to EOUs in India for services rendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,
Payment to EOUs in India for services rendered by them
True/False
Question Funding Options in domestic yen market are Futures, FRAs, Call and put options.
True/False
Question There is no difference between CIP and CIF contracts except the mode of
transportation.
Correct Answer True
True/False
Question The volume of trading of Derivatives in the world trade market is growing but still
only 5% of the total.
Correct Answer False
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations ,
Which have greater intrinsic value
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources
raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources
raised in world capital market
Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently
floated issue
Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recently
floated issue
Your Answer To weed out unviable projects and rank profitable ones
Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of
rates between 3 currencies
Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of
rates between 3 currencies
Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Correct Answer Prices of capital market instruments change and are expected to change drastically
Your Answer Prices of capital market instruments change and are expected to change drastically
True/False
Question JV means Joint venture and WOS means World of Security.
Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS
maximum $ 100 million or equivalent
Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS
maximum $ 100 million or equivalent , Indian co should not have been black listed
1
5 – 10
13 – 14
15 – 17
18 – 19
20 – 23
24 – 27
31 – 35
36 – 39
40 – 41
43 – 46
47 – 49
50 – 53
55 – 57
61 – 66
67 – 69
70 – 71
73 – 74
75 -76
79 – 83
84 – 88
109 – 114
117 – 123
124 – 127
128 – 129
131 – 137
138 – 141
143- 147
148 – 152
155 – 157
158 – 161
163 – 166
169 – 173
174 – 177
179 – 180
183 – 183
189 – 190
191
195
199
203 – 204
207- 212
215 – 217
218 -219
220 – 221
True/False
Question JV means Joint venture and WOS means World of Security.
Correct Answer The exercise or strike price, the amount , The expiration date and time, the method
of payment
Your Answer The exercise or strike price, the amount , The expiration date and time, the method
of payment
True/False
Question At Least one principal Lender bank is essential for issue of the ADR or GDR.
Correct Answer Institutions can introduce new products and instuments at the price of their choice.
Your Answer Institutions can introduce new products and instuments at the price of their choice.
True/False
Question Till August 1994 India was following the Indirect Methodof Rate quotation.
10
Correct Answer Purchase and sell foreign currency notes and travellers cheques
Your Answer Purchase and sell foreign currency notes and travellers cheques and also Give export
finance
Correct Answer Price established by the clearing house at the end of each trading session , It is used
to determine the net gain, loss, margin call and next days price limits
Your Answer Price established by the clearing house at the end of each trading session , It is used
to determine the net gain, loss, margin call and next days price limits
Correct Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime
Your Answer Aribtration and dispute resolving , Canvass for open trade combat commercial crime ,
Increased Govt regulation of Business
True/False
Question Cause of increase in cost of public issues Underwriting fees , selling commission
True/False
Question The Option period in the forward contract is at the option of the Banker, hence the
bank has to be very conservative in quoting rates.
11
Correct Answer Demand and supply, interest rates, inflation, , Sentiment, Speculation
Your Answer Demand and supply, interest rates, inflation, , Sentiment, Speculation , GDP,Balance
of trade and payment,Unemployment
Correct Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term
bonds
Your Answer Gilts offer higher attractive margin , Choice of issuing medium term and long term
bonds , Linking of issues to currency swaps
True/False
Question In red clause credit some clauses are printed in Red ink.
Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,
Payment to EOUs in India for services rendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,
Payment to EOUs in India for services rendered by them
12
Your Answer To weed out unviable projects and rank profitable ones
Correct Answer Activity for investment is core activity of Indian Company. , Total Financial
commitment in JV/WOS as per prescribed ceiling
Your Answer Activity for investment is core activity of Indian Company. , Total Financial
commitment in JV/WOS as per prescribed ceiling
True/False
Question In developed markets, speculators play important role in determining the trend of
currency rates.
Correct Answer True
13
Correct Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bank
Your Answer Negotiating Bank, advising bank , Reimbursing bank, Confirming bank
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised
in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised
in world capital market
Your Answer UK
14
True/False
Question The Negotiating bank examines the documents submitted by the seller and makes
payment if they comply the terms and conditions of the LC.
Correct Answer True
True/False
Question Country risk analysis is a futile exercise in the background of cost of analysis.
15
16
Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market
intelligence cell to study and monitor developments in Forex Market
Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional
foreign currency available to ADs at cheaper rates
True/False
Question Cross currency forward contract is not meaningful if original contract is in Rupees to
USD
Correct Answer True
Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of
payment
Your Answer The exercise or strike price, the amount , The expiration date and time, the method of
payment , The Market report of the exchange which trades the option
Intolerable risk Drop the investment project Drop the investment project
Country risk analysis Cost of evluation does not justify Cost of evluation does not justify
analysis analysis
Stock market analysis Banks are ahead Factors' values
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the
country
Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the
country
Maturity of future Time when actual commodity is Last date of exercising option
delivered
Note issuance facility Euronotes Euronotes
True/False
Question Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable
instrument.
Correct Answer False
True/False
Question The Prominent non banking financial institutions participating in the FOREX markets are
Pension funds, mutual funds, insurance Cos.
Correct Answer True
Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures
solvency for honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures
solvency for honouring contracts
Correct Answer By underwriting bank to support funding for a certain period, against which borrowers
can issue short term papers
Your Answer Which enables the investor to market the same in the secondary market
Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad
Your Answer Preshipment credit up to six months for construction and turnkey projects abroad
Your Answer Sharing risk of Non payment by the Syndicate of Banks giving loans
True/False
Question If ERD > IRD hen exporter should availa Rupee finance
Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an
undertaking given on behalf of a certain person to another person in different country
Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an
undertaking given on behalf of a certain person to another person in different country
Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,
Payment to EOUs in India for services rendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,
Payment to EOUs in India for services rendered by them
True/False
Question Funding Options in domestic yen market are Futures, FRAs, Call and put options.
True/False
Question The volume of trading of Derivatives in the world trade market is growing but still only
5% of the total.
Correct Answer False
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations ,
Which have greater intrinsic value
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised
in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised
in world capital market
Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently
floated issue
Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recently
floated issue
Your Answer To weed out unviable projects and rank profitable ones
Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of
rates between 3 currencies
Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of
rates between 3 currencies
Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Correct Answer Prices of capital market instruments change and are expected to change drastically
Your Answer Prices of capital market instruments change and are expected to change drastically
True/False
Question JV means Joint venture and WOS means World of Security.
Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum
$ 100 million or equivalent
Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum
$ 100 million or equivalent , Indian co should not have been black listed
Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently
floated issue
Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recently
floated issue
True/False
Question Out of 15 member countries in European Union 12 countries commiteed themselves for
a single currency.
Correct Answer False
True/False
Question The volume of trading of Derivatives in the world trade market is growing but still only
5% of the total.
Correct Answer False
Intolerable risk Drop the investment project Drop the investment project
Country risk analysis Cost of evluation does not justify Cost of evluation does not justify
analysis analysis
Stock market analysis Banks are ahead Banks are ahead
Correct Answer Risk of events in a particular country which may cause loss to a person dealing with
that country
Your Answer Risk of events in a particular country which may cause loss to a person dealing with
that country
Correct Answer Names of consigner, consignee , The port of loading and unloading, contract of
shipment
Your Answer Names of consigner, consignee , The port of loading and unloading, contract of
shipment
True/False
Question The American Dollar market comprises of the domestic segment of USD the offshore
segment of USD.
Correct Answer True
Your Answer Because of different tax systems , Because of different credit standards
True/False
Question Till August 1994 India was following the Indirect Methodof Rate quotation.
True/False
Question Funding Options in domestic yen market are Futures, FRAs, Call and put options.
10
Your Answer 26
True/False
Question In red clause credit some clauses are printed in Red ink.
True/False
Question Prior approval of RBI is needed for payment of all imports.
Correct Answer Underlying asset price , Time before expiration, rate of interest
Your Answer Underlying asset price , Time before expiration, rate of interest
11
Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum
$ 100 million or equivalent
Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum
$ 100 million or equivalent
Correct Answer Prevails in Domestic market of foreign country , Prevails in offshore markets
Your Answer Prevails in Domestic market of foreign country , Prevails in offshore markets
Correct Answer The change in value of currency alters the home currency value of an asset , liability, ,
The change in value of currency alters the home currency value of profit, loss, or future
cash flows
Your Answer The change in value of currency alters the home currency value of an asset , liability, ,
The change in value of currency alters the home currency value of profit, loss, or future
cash flows , Certainty of an event which would happen in favour of the importer/
exporter
Correct Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000
Your Answer Particulars of cancellation of forward cover for the equivalent of USD 500,000
True/False
Question In the forward rate quotations between two currencies, when one currency is at
discount the other currency is at premium.
12
Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations
Correct Answer Preshipment credit beyond six months for constructi on and turnkey projects abroad
Your Answer Preshipment credit beyond six months for construction and turnkey projects abroad
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the
country
Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the
country
True/False
Question Import finance is nomally available at rates of interest cheaper than domestic finance
rates.
Correct Answer False
Correct Answer Commercial Banks , Non banking Finance companies , Insurance Companies
13
Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a
market intelligence cell to study and monitor developments in Forex Market
Your Answer Clearing house for settlement and clearance for the operations of Ads , Make
additional foreign currency available to ADs at cheaper rates
True/False
Question Cross currency forward contract is not meaningful if original contract is in Rupees
to USD
Correct Answer True
Correct Answer The exercise or strike price, the amount , The expiration date and time, the
method of payment
Your Answer The exercise or strike price, the amount , The expiration date and time, the
method of payment , The Market report of the exchange which trades the option
14
Intolerable risk Drop the investment project Drop the investment project
Country risk analysis Cost of evluation does not justify Cost of evluation does not justify
analysis analysis
Stock market analysis Banks are ahead Factors' values
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside
the country
Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside
the country
Maturity of future Time when actual commodity is Last date of exercising option
delivered
Note issuance facility Euronotes Euronotes
True/False
Question Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable
instrument.
Correct Answer False
15
Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures
solvency for honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures
solvency for honouring contracts
Correct Answer By underwriting bank to support funding for a certain period, against which
borrowers can issue short term papers
Your Answer Which enables the investor to market the same in the secondary market
Correct Answer Preshipment credit beyond six months for construction and turnkey projects
abroad
Your Answer Preshipment credit up to six months for construction and turnkey projects abroad
16
Your Answer Sharing risk of Non payment by the Syndicate of Banks giving loans
True/False
Question If ERD > IRD hen exporter should availa Rupee finance
Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is
an undertaking given on behalf of a certain person to another person in different
country
Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is
an undertaking given on behalf of a certain person to another person in different
country
Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,
Payment to EOUs in India for services rendered by them
17
True/False
Question Funding Options in domestic yen market are Futures, FRAs, Call and put options.
True/False
Question There is no difference between CIP and CIF contracts except the mode of
transportation.
Correct Answer True
True/False
Question The volume of trading of Derivatives in the world trade market is growing but still
only 5% of the total.
Correct Answer False
18
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Correct Answer Which are convertible , Which have liquidity confirmed in Euro market operations
Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations ,
Which have greater intrinsic value
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources
raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources
raised in world capital market
Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of
recently floated issue
Your Answer Advertisement which lists the managers, underwriters, , List of Providers of
recently floated issue
Your Answer To weed out unviable projects and rank profitable ones
19
Correct Answer Prices of capital market instruments change and are expected to change
drastically
Your Answer Prices of capital market instruments change and are expected to change
drastically
True/False
Question JV means Joint venture and WOS means World of Security.
Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS
maximum $ 100 million or equivalent
Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS
maximum $ 100 million or equivalent , Indian co should not have been black listed
20
True/False
Question Out of 15 member countries in European Union 12 countries commiteed
themselves for a single currency.
Correct Answer False
Your Answer True
True/False
Question In red clause credit some clauses are printed in Red ink.
Correct Answer True
Your Answer True
True/False
Question Transfer of funds for investment abroad is allowed freely.
Correct Answer True
Your Answer False
True/False
Question An Indian importing goods from USA pays dollars in India.
Correct Answer False
Your Answer True
21
True/False
Question CFR = FOB plus freight paid by seller + insurance paid by seller.
Correct Answer False
Your Answer True
True/False
Question Integrated branches of Commercial banks handle forex transactions as well as
options, swaps,
futures, arbitrage operations
Correct Answer True
Your Answer True
True/False
Question Normally the forward contracts are booked for making huge profits.
Correct Answer False
Your Answer False
True/False
Question Head office of ICC is in Paris because of its First President Eliance Clementel.
Correct Answer True
Your Answer False
22
True/False
Question Till August 1994 India was following the Indirect Methodof Rate quotation.
Correct Answer False
Your Answer False
23
True/False
Question PP Form is required when exports are made to any country by post parcel on value
payable basis.
Correct Answer False
Your Answer True
24
25
Correct Answer Clearing house for settlement and clearance for the operations of Ads , Set up a market
intelligence cell to study and monitor developments in Forex Market
Your Answer Clearing house for settlement and clearance for the operations of Ads , Make additional
foreign currency available to ADs at cheaper rates
True/False
Question Cross currency forward contract is not meaningful if original contract is in Rupees to
USD
Correct Answer True
Correct Answer The exercise or strike price, the amount , The expiration date and time, the method of
payment
Your Answer The exercise or strike price, the amount , The expiration date and time, the method of
payment , The Market report of the exchange which trades the option
Intolerable risk Drop the investment project Drop the investment project
Country risk analysis Cost of evluation does not justify Cost of evluation does not justify
analysis analysis
Stock market analysis Banks are ahead Factors' values
26
Correct Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the
country
Your Answer Yen,Euro Dollar, Swiss Francs, USD market, Govt Borrowings within and outside the
country
Maturity of future Time when actual commodity is Last date of exercising option
delivered
Note issuance facility Euronotes Euronotes
True/False
Question Postal receipt is an acknowledgement of receipt of goods, a quasi negotiable instrument.
True/False
Question The Prominent non banking financial institutions participating in the FOREX markets are
Pension funds, mutual funds, insurance Cos.
Correct Answer True
27
Correct Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency
for honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity , Margin ensures solvency
for honouring contracts
Correct Answer By underwriting bank to support funding for a certain period, against which borrowers
can issue short term papers
Your Answer Which enables the investor to market the same in the secondary market
Correct Answer Preshipment credit beyond six months for construction and turnkey projects abroad
Your Answer Preshipment credit up to six months for construction and turnkey projects abroad
28
Your Answer Sharing risk of Non payment by the Syndicate of Banks giving loans
True/False
Question If ERD > IRD hen exporter should availa Rupee finance
Correct Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an
undertaking given on behalf of a certain person to another person in different country
Your Answer It is an undertaking given by the openers bank to pay certain sum of money , It is an
undertaking given on behalf of a certain person to another person in different country
Correct Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,
Payment to EOUs in India for services rendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heart operation abroad ,
Payment to EOUs in India for services rendered by them
True/False
Question Funding Options in domestic yen market are Futures, FRAs, Call and put options.
29
True/False
Question The volume of trading of Derivatives in the world trade market is growing but still only
5% of the total.
Correct Answer False
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
30
Your Answer Which are convertible , Which have liquidity confirmed in Euro market operations ,
Which have greater intrinsic value
Correct Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in
world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance from resources raised in
world capital market
Correct Answer Advertisement which lists the managers, underwriters, , List of Providers of recently
floated issue
Your Answer Advertisement which lists the managers, underwriters, , List of Providers of recently
floated issue
Your Answer To weed out unviable projects and rank profitable ones
Correct Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of
rates between 3 currencies
Your Answer He gets the flexibility to exposure , He is exposed to additional risk of movement of
rates between 3 currencies
31
Correct Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Your Answer Unfavourable fluctuations in exchange rate can wipe out the normal business profit
Correct Answer Prices of capital market instruments change and are expected to change drastically
Your Answer Prices of capital market instruments change and are expected to change drastically
True/False
Question JV means Joint venture and WOS means World of Security.
Correct Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum
$ 100 million or equivalent
Your Answer Activity proposed need to be core activity , Financial commitment in JV/WOS maximum
$ 100 million or equivalent , Indian co should not have been black listed
32
True/False
Question Services of a Paying bank are taken when currencies of
exporters country or the importers country is not involved in the
transaction.
Correct Answer False
Your Answer House Airway bill , Postal Receipt , On board bill of exchange
True/False
Question An Indian importing goods from USA pays dollars in India.
Correct Answer Interest rates are changing, Interest rates affect and are affected
by exchange rates
Your Answer Interest rates are changing, Interest rates affect and are affected
by exchange rates
Your Answer 26
True/False
Correct Answer Which are convertible , Which have liquidity confirmed in Euro
market operations
Your Answer Which are convertible , Which have liquidity confirmed in Euro
market operations , which have greater gold parity
True/False
Question Out of 15 member countries in European Union 12 countries
commiteed themselves for a single currency.
Correct Answer False
True/False
Question The American Dollar market comprises of the domestic segment
of USD the offshore segment of USD.
Correct Answer True
True/False
Question Tranche' is a managed issue of securities in smaller
denominations.
Correct Answer True
True/False
Question Prior approval of RBI is needed for payment of all imports.
True/False
Question Cause of increase in cost of public issues Underwriting fees ,
selling commission
Correct Answer True
Correct Answer Exemption is granted from the criteria of Core activity stipulation
under automatic route
True/False
Question Bid rate is bidders buying rate and offered rate is bidders selling
rate.
Correct Answer True
Your Answer 5
Correct Answer Floating rate notes, bonds, debentures , Syndicate loans, issue
of shares
Your Answer Floating rate notes, bonds, debentures , Syndicate loans, issue
of shares
True/False
Question The volume of trading of Derivatives in the world trade market is
growing but still only 5% of the total.
Correct Answer False
Correct Answer The exerci se or strike price, the amount , The expiration date
and time, the method of payment
Your Answer The exercise or strike price, the amount , The expiration date
and time, the method of payment , The Market report of the
exchange which trades the option
True/False
Question Out of 15 member countries in European
Union 12 countries commiteed themselves for a single
currency.
Correct Answer False
Your Answer True
True/False
Question In red clause credit some clauses are
printed in Red ink.
Correct Answer True
Your Answer True
True/False
Question Transfer of funds for investment abroad
is allowed freely.
Correct Answer True
Your Answer False
True/False
True/False
Question CFR = FOB plus freight paid by seller +
insurance paid by seller.
Correct Answer False
Your Answer True
True/False
Question Integrated branches of Commercial banks
handle forex transactions as well as options, swaps,
futures, arbitrage operations
Correct Answer True
Your Answer True
True/False
Question Normally the forward contracts are booked
for making huge profits.
Correct Answer False
Your Answer False
True/False
Question Head office of ICC is in Paris because of
its First President Eliance Clementel.
Correct Answer True
Your Answer False
True/False
Question Till August 1994 India was following the
Indirect Methodof Rate quotation.
Correct Answer False
Your Answer False
True/False
Question PP Form is required when exports are made
to any country by post parcel on value payable basis.
Correct Answer False
Your Answer True
True/False
Question Cross currency forward contract is not meaningful if original
contract is in Rupees to USD
Correct Answer True
Correct Answer The exercise or strike price, the amount , The expiration date
and time, the method of payment
Your Answer The exercise or strike price, the amount , The expiration date
and time, the method of payment , The Market report of the
exchange which trades the option
True/False
Question Postal receipt is an acknowledgement of receipt of goods, a
quasi negotiable instrument.
Correct Answer False
True/False
Question The Prominent non banking financial institutions participating in
the FOREX markets are Pension funds, mutual funds, insurance
Cos.
Correct Answer True
Correct Answer Faith money deposited by buyers and sellers ensures liquidity ,
Margin ensures solvency for honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity ,
Margin ensures solvency for honouring contracts
True/False
Question If ERD > IRD hen exporter should availa Rupee finance
Correct Answer Payment of hotel bills abroad, payment for expenses on Heart
operation abroad , Pay ment to EOUs in India for services
rendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heart
operation abroad , Pay ment to EOUs in India for services
rendered by them
True/False
Question Funding Options in domestic yen market are Futures, FRAs,
Call and put options.
Correct Answer True
True/False
Question There is no difference between CIP and CIF contracts except
the mode of transportation.
Correct Answer True
True/False
Question The volume of trading of Derivatives in the world trade market is
growing but still only 5% of the total.
Correct Answer False
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
Correct Answer Which are convertible , Which have liquidity confirmed in Euro
market operations
Your Answer Which are convertible , Which have liquidity confirmed in Euro
market operations , Which have greater intrinsic value
Correct Answer Give Softloans to poorer countries in Asia , Give project finance
from resources raised in world capital market
Your Answer Give Softloans to poorer countries in Asia , Give project finance
from resources raised in world capital market
Your Answer To weed out unviable projects and rank profitable ones
Correct Answer Prices of capital market instruments change and are expected to
change drastically
Your Answer Prices of capital market instruments change and are expected to
change drastically
True/False
Question JV means Joint venture and WOS means World of Security.
True/False
Question Tranche' is a managed issue of securities in smaller
denominations.
Correct Answer True
Correct Answer Payment of hotel bills abroad, payment for expenses on Heart
operation abroad , Payment to EOUs in India for services
rendered by them
Your Answer Payment of hotel bills abroad, payment for expenses on Heart
operation abroad , Payment to EOUs in India for services
rendered by them , Payment of Gifts of GBP 5000 per year per
donor
True/False
Question FEDAI does not require RBI permission to frame and revise
rules of business
True/False
Question Import finance is nomally available at rates of interest cheaper
than domestic finance rates.
Correct Answer False
Correct Answer Preshipment credit , Post shipment credit , Duty Draw back
True/False
Question ECGC offers isurance protection to Indian exporters againt
pay ment risks.
Correct Answer True
Correct Answer Gilts offer higher attractive margin , Choice of issuing medium
term and long term bonds
Your Answer Gilts offer higher attractive margin , Choice of issuing medium
term and long term bonds
True/False
Question An Indian importing goods from USA pays dollars in India.
True/False
Question An Indian exporting goods to New York receives dollars in New
York.
Your Answer 26
Your Answer Following Thursday if it is a working day in all the three centers
True/False
Question Installment credit is issued for specific quantities of goods to be
shipped every week or month.
Correct Answer True
True/False
Question Transfer of funds for investment abroad is allowed freely.
Correct Answer Party who is not definite about crystallisation of delivery date
Correct Answer It is not considered by the banks as a good security for financing.
Correct Answer Faith money deposited by buyers and sellers ensures liquidity ,
Margin ensures solvency for honouring contracts
Your Answer Faith money deposited by buyers and sellers ensures liquidity ,
Margin ensures solvency for honouring contracts , Given by
buyer or seller as commission
True/False
Question Services of a Paying bank are taken when currencies of
exporters country or the importers country is not involved in the
transaction.
Correct Answer False
True/False
Question Integrated branches of Commercial banks handle forex
transactions as well as options, swaps, futures, arbitrage
operations
True/False
Question There is no difference between CIP and CIF contracts except the
mode of transportation.
Correct Answer True
Correct Answer Swap contract exchange of fixed rate payment system for a
floating rate system
Your Answer Exchange of fixed deposits to equity
True/False
Question An Indian exporting goods to New York receives dollars in New
York.
Correct Answer True
True/False
Question Cross currency forward contract is not meaningful if original
contract is in Rupees to USD
Correct Answer True
True/False
Question If ERD > IRD hen exporter should availa Rupee finance
True/False
Question Floating rate notes are traded in secondary market also.
Correct Answer Which are convertible , Which have liquidity confirmed in Euro
market operations
Your Answer Which are convertible , Which have liquidity confirmed in Euro
market operations , Which have greater intrinsic value
Correct Answer The exercise price is below the spot price for a call option , The
exercise price is above the spot price for a put option
Your Answer The exercise price is below the spot price for a call option , The
exercise price is above the spot price for a put option , The
True/False
Question The working of the IBRD and IMF in recent has blurred the
difference between the two
Correct Answer True
Your Answer Sharing risk of Non pay ment by the Syndicate of Banks giving
loans
True/False
Question FEDAI does not require RBI permission to frame and revise
rules of business
Correct Answer False
Your Answer UK
Correct Answer Activity for investment is core activity of Indian Company. , Total
Financial commitment in JV/WOS as per prescribed ceiling
True/False
Question An Indian exporting goods to New York receives dollars in New
York.
Correct Answer True
True/False
Question Postal receipt is an acknowledgement of receipt of goods, a
quasi negotiable instrument.
Correct Answer False
True/False
Question Sandby credis are introduced by US Banks because they were
not permitted to issue on demand guarantees.
Correct Answer True
True/False
Question Dealing room is a place where the actual exchange of currencies
takes place phsically at predetermined rates.
Correct Answer False
Correct Answer Floating rate notes, bonds, debentures , Syndicate loans, issue
of shares
Your Answer Floating rate notes, bonds, debentures , Syndicate loans, issue
of shares , Forward contracts and options
Correct Answer Faith money deposited by buyers and sellers ensures liquidity ,
Margin ensures solvency for honouring contracts
Your Answer Margin ensures solvency for honouring contracts , Given by
buyer or seller as commission , Given to brokers by exchange,
buyer, seller
Correct Answer To establish the contract of sale between the two parties.
Correct Answer Prices of capital market instruments change and are expected to
change drastically
Your Answer Prices of capital market instruments change and are expected to
True/False
Question An AD can book a forward contract for a part of the amount of
Sale Contract
Correct Answer True
True/False
Question The volume of trading of Derivatives in the world trade market is
growing but still only 5% of the total.
Correct Answer False
True/False
Question CFR = FOB plus freight paid by seller + insurance paid by seller.
True/False
Question Integrated branches of Commercial banks handle forex
transactions as well as options, swaps, futures, arbitrage
operations
Correct Answer True
True/False
Question Charter party bills of lading are generally not acceptable to
bankers as security because Sea Charters are full of problems.
Correct Answer True