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

ques. Paper
International Finance and Trade – I (221) : January 2006


part A : Basic Concepts (30 Marks)



· This part consists of ques. with serial number one - 30.

· ans all ques..

· every ques. carries 1 mark.

· Maximum time for answering part A is 30 Minutes.





1.
Inflation in Hong Kong is 3% and that in Singapore is 5%. According to the relative form of PPP, the Singapore dollar against the Hong Kong dollar over a period of 1 year would

(a) Appreciate by 2% (b) Depreciate by 2%

(c) Appreciate by 1.90% (d) Depreciate by 1.90%

(e) Depreciate by 1.94%.
< ans >

2.
Which theory of international trade considers the possibility of trade ranging from 2 countries having similar factor endowments and consumer tastes?

(a) Heckscher – Ohlin Model

(b) Imitation – Gap Theory

(c) Theory of comparative Advantage

(d) International Product Life Cycle Theory

(e) Theory of Absolute advantage.
< ans >

3.
Which of the subsequent statements is/are actual regarding different kinds of guarantees issued by the EXIM bank on behalf of turnkey projects and construction contracts?

I. Bid bond guarantee is issued for a maximum period of 1 year.

II. Performance guarantee for five to 10 percent of contract is issued and is valid up to 1 year after completion of the contract.

III. Under guarantee for borrowing abroad, exporter can raise up to 10% of the contract value, in foreign currency from a foreign bank.



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

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

(e) All (I), (II) and (III) above.
< ans >

4.
Payment to a foreign tech. consultant for professional services rendered by him is recorded under which of subsequent heads of Balance of payments (BOP) statement?

(a) Merchandise (b) Miscellaneous

(c) Unilateral transfers (d) Official reserves account

(e) Errors and Omissions.
< ans >

5.
Under a system of floating exchange rates, relatively high productivity and low inflation rates in the US outcomes in a (an):

Earning:   Approval pending.