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

(a) Increase in the demand for foreign currency, a reduce in the supply of foreign currency and a depreciation in the dollar

(b) Increase in the demand for foreign currency, an increase in the supply of foreign currency and an appreciation in the dollar

(c) reduce in the demand for foreign currency a reduce in the supply of foreign currency and a depreciation in the dollar

(d) reduce in the demand for foreign currency and increase in the supply of foreign currency and an appreciation in the dollar

(e) Depreciation of dollar only.
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6.
The market rates are as under

Euro/SFr = 0.6472/75

3-month forward = 20/15

4-month forward = 30/20

What should be the rate quoted to a Swiss exporter who wants to have an choice delivery in the 4th month?

(a) 0.6452 (b) 0.6460 (c) 0.6442 (d) 0.6455 (e) 0.6475.
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7.
Which of the subsequent statements is/are actual if the capital gains tax rate is lower than the income tax rate?

I. Investors would like to invest in those foreign currencies which are at a premium.

II. Borrowers would like to borrow in a foreign currency which is at a discount.

III. Both borrowers and investors would like to borrow/invest in a currency which is at a premium.

IV. Both borrowers and investors would like to borrow/invest in a currency which is at a discount.



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

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

(e) Both (II) and (IV) above.
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8.
According to the Monetary Approach of exchange rate forecasting, inflation is the result of

(a) Increase in wages in the economy

(b) Increase in real output growth

(c) Increase in government spending

(d) Increase in money supply in excess of real output growth

Earning:   Approval pending.