Institute of Chartered Financial Analysts of India (ICFAI) University 2006 Certification Finance International and Trade – I - Question Paper

(c) Both (I) and (III) above (d) Both (II) and (IV) above

(e) (I), (II) and (III) above.
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13.
The Interest Rate Parity (IRP) formula depends on

(a) Prevailing Relative Purchasing Power Parity (PPP)

(b) Prevailing Absolute Purchasing Power Parity (PPP)

(c) Expectations of future exchange rate movements be unbiased

(d) No risk premium built into forward markets

(e) Relative free flow of capital ranging from countries.
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14.
The inflation rates in U. K. and Singapore are 3% and 2% respectively. Interest rate in U. K. is 5% p.a. The interest rate in Singapore can be expected to be

(a) 3.60% p.a. (b) 3.98% p.a. (c) 4.25% p.a.

(d) 6.00% p.a. (e) 6.15% p.a.
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15.
Which of the subsequent exchange rate forecasting approaches is also known as the balance of payment approach?

(a) Monetary approach (b) Portfolio balance approach

(c) Asset approach (d) Demand-supply approach

(e) Mundell-Fleming approach.
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16.
Credit Support to imports is usually extended in the form of

(a) Imports of consumable inputs and canalized items

(b) Import made under short term credit facility extended by the overseas seller

(c) Credit margin in the concerned state

(d) Deferred payment guarantees favoring overseas seller on behalf of importer who is importing capital goods on long term credit

(e) Availment of import loan at minimum rate of interest prevailing in the market.
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17.
Which of the subsequent guarantees issued by Export Credit Guarantee Corporation, seeks to safeguard a bank in India that added confirmation to a foreign L/C, against losses arising out of the failure of L/C issuing bank?

Earning:   Approval pending.