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

The supply of domestic currency would rise

(b)
The country’s “reserve account” would reduce

(c)
The value of domestic currency would rise

(d)
Demand for domestic currency would fall

(e)
The value of domestic currency would fall.


< ans >

12.
Most nations tend to focus on their current account deficit. In what instances is it perfectly reasonable to have a current account deficit ?

(a)
A current account deficit is acceptable as long as foreign direct investments goes towards building infrastructure rather than consumption

(b)
A current account deficit is acceptable as long as nation has international reserves or can be supported by the International Monetary Fund

(c)
A current account deficit is acceptable as long as tariffs are low

(d)
It is never good to have a current account deficit

(e)
A current account deficit retards the economic growth.


< ans >

13.
Consider the subsequent

Mumbai

Rs/ Spot 79.99 / 80.33

Rs/Euro Spot 55.32 / 55.45

London

/Euro Spot 0.6877 / 0.6880

Which of the subsequent is true?

(a)
The profit from 3 point arbitrage for an investment of Rs.100 is three paise

(b)
The profit from 3 point arbitrage for an investment of Rs.100 is five paise

(c)
The profit from 3 point arbitrage for an investment of Rs.100 is 10 paise

(d)
The profit from 3 point arbitrage for an investment of Rs.100 is 16 paise

(e)
The profit from 3 point arbitrage for an investment of Rs.100 is 19 paise.


< ans >

14.
The market rates are as under

Rs./$ :
44.72 / 74

1 month :
11 / 12

2 months :
22 / 23


If an exporter wants an choice delivery of dollars over the 2nd month, then the rate quoted by the bank is

(a)
Rs.44.83 / $

(b)
Rs.44.74 / $

(c)
Rs.44.94 / $

(d)
Rs.44.86 / $

(e)
Rs.44.95 / $.


< ans >

15.
As per Uniform Rules for Collection, ICC Publication No. 522, which of the subsequent is not a commercial document?

(a)
Bill of lading

(b)
Invoice

(c)
Certificate of origin

(d)
Packing List

(e)
Bill of exchange.


< ans >

16.
Which of the subsequent is not a suitable strategy to hedge economic exposure?

Earning:   Approval pending.