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

What should be the 1-year forward bid rate of dollar to prevent arbitrage?

(a)
Rs.44.67

(b)
Rs.45.74

(c)
Rs.45.42

(d)
Rs.45.85

(e)
Rs.44.78.


< ans >

22.
A “Bulldog Bond” means

(a)
A bond issued by a Japanese resident to non-Japanese investors

(b)
US dollar denominated bonds issued in the US bond markets

(c)
Privately placed bond issued in the Japanese markets

(d)
Sterling denominated foreign bonds which are raised in the UK domestic securities market

(e)
A yen denominated bond issued for global market by Japanese residents.


< ans >

23.
A country exporting a particular commodity or product and simultaneously importing the identical commodity or product of various quality, is known as

(a)
Dumping

(b)
Inter industry trade

(c)
Embargo

(d)
Autarky

(e)
Intra-industry trade.


< ans >

24.
If the Argentina Peso is devalued by 30% against US dollar. What is the percentage of appreciation of the US dollar against the Peso?

(a)
25.00%

(b)
27.33%

(c)
33.67%

(d)
42.86%

(e)
45.33%.


< ans >

25.
Deferred Letter of Credit means

(a)
The shipments may be made in installments at a specified periods of time

(b)
Payment is made to the exporter at pre-shipment stage in anticipation of export of goods and submission of bills at a later stage

(c)
Where a portion of goods is paid for by the buyer after verification of goods or after assessing the value

(d)
Where the beneficiary has to draw usance draft on drawee / specified bank and payment will be made on due date

(e)
Whereby the credit is available to the beneficiary gets reinstated to the original amount once a drawing is made.


< ans >

26.
Which of the subsequent theory(ies) of exchange rate states that the modifications that are expected to occur in the value of a currency in future, gets reflected in the exchange rates immediately?

(a)
Demand – supply approach

(b)
Monetary approach

(c)
Portfolio balance approach

(d)
Efficient market hypothesis approach

(e)
Fundamental approach.


< ans >

27.
Which of the subsequent is the cause for the J-Curve effect?

(a)
The inelastic nature of short-run foreign demand for exported goods allows export businesses to achieve a temporary advantage

Earning:   Approval pending.