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

(a) Export finance guarantee

(b) Export performance guarantee

(c) Export production finance guarantee

(d) Export finance (overseas lending) guarantee

(e) Transfer guarantee.
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18.
In the APV method, the discount rate used for calculating the value of concessional loan is

(a) The risk-free interest rate in the home country

(b) The risk-free interest rate in the host country

(c) Competitive borrowing rate in the home country

(d) Competitive borrowing rate in the host country

(e) Discount rate for savings through transfer pricing.
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19.
Which of the subsequent is stated to be false towards Forward Exchange Contracts (FEC) as per FEDAI Rules?

(a) FEC can be booked for genuine transactions and where there is exposure to exchange risk, not for speculative purposes

(b) Cannot be booked for anticipated transactions, only for firm exposures

(c) Value of the forward cover should not exceed the value of the goods contracted for

(d) Non-trade transactions, contracts once cancelled can be rebooked

(e) In case of merchanting trade transactions forward contracts will have to be booked simultaneously for both legs of the transactions or for the net amount of expected profits.
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20.
Which of the subsequent policies does not help a country accurate its current account deficit?

(a) Letting the exchange rate depreciate (b) Subsidizing exports

(c) Free foreign grants (d) Expanding aggregate demand

(e) Taxing imports.
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21.
Which of the subsequent shows interest parity ranging from US$ and £?

I. – = .

II. .

III. .

(a) Only (I) above (b) Only (II) above

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

Earning:   Approval pending.