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

ques. Paper
International Finance and Trade – I (221) : July 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.
M/s. Smart Traders India Ltd., exported goods worth US$ 30,000 to a buyer in Sudan and sent the documents to the Blue Nile Bank, Sudan for collection. The buyer has paid the bill in his local currency to Blue Nile Bank and cleared the consignment. However, due to shortage of forex reserves, Central Bank of Sudan has not provided permission to Blue Nile Bank for repatriation of bill proceeds to India. The risk the Indian company facing is

(a)
An exchange risk

(b)
Embargo

(c)
Blocking of currency

(d)
Non-convertibility currency

(e)
Country risk.


< ans >

2.
Which of the subsequent items is not a debit in India’s Balance of Payments?

(a)
Import of components for machinery by a Manufacturing company

(b)
Sanction of loan of EURO 100,000 by EXIM Bank to a buyer in U.K

(c)
US$ 20,000 paid by a Non-resident Indian towards medical expenses of his mother in India

(d)
Remittance of Euro 15,000 by an Indian parent to his son studying Post-graduation course in Germany

(e)
Release of USD 10,000 by an Authorized Dealer in India to Indian national for his travel to Singapore.


< ans >

3.
Which of the subsequent theories of international trade explores the possibility of 2 nations operating at the identical level of efficiency, benefiting by trading with every other?

(a)
Theory of Comparative Advantage

(b)
Heckscher-Ohlin Model

(c)
Theory of Absolute Advantage

(d)
Imitation Gap Theory

(e)
International Product Life Theory.


< ans >

4.
The designated authority under FEMA, 1999 to administer the Exchange control regulations in India is

(a)
Director General of Foreign Trade

(b)
Chief Controller of Customs, Excise & Service Tax

(c)
Foreign Exchange Dealers’ Association of India

(d)
Reserve Bank of India

(e)
Chief Secretary, under Ministry of Commerce, Govt. of India.


< ans >

5.
Which of the subsequent are not exempted from export declaration forms?

(a)
Exports by air/post parcel which do not involve any foreign exchange flow

(b)
Personal effects of travellers, whether accompanied or unaccompanied

(c)
Trade samples supplied of free of payment

(d)
Goods imported free of cost on re-export basis

(e)
Export of goods on lease basis.


< ans >

6.
According to which incoterms (International Commercial Terms), the seller is under obligation to bear the risks, costs, duties and other charges of delivering the goods thereto, cleared for importation ?

Earning:   Approval pending.