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Foreign Exchange Management - Questions & Answers for Competitive Exams | GkSeries

25. Market selection as a strategy to manage economic exposure requires-
  • [A] preferring domestic market to foreign market
  • [B] preferring market with fixed exchange rate
  • [C] shifting to a market whose currency has appreciated
  • [D] shifting to a market whose currency has depreciated

Answer: Option [C]

26. The transaction in which the bank receives local currency from the customer and pays him foreign currency is a-
  • [A] purchase transaction
  • [B] sale transaction
  • [C] direct transaction
  • [D] none of the above

Answer: Option [B]

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27. Interest for the transit period is included in -
  • [A] bill buying rate
  • [B] bill selling rate
  • [C] usance bill buying rate
  • [D] none of the above

Answer: Option [D]

28. The exchange rates quoted by an authorised dealer to its customers are known as-
  • [A] authorised rates
  • [B] commercial rates
  • [C] merchant rates
  • [D] indirect rates

Answer: Option [C]

29. Buying rate for ready merchant rate is derived from-
  • [A] interbank spot buying rate
  • [B] interbank ready buying rate
  • [C] interbank spot selling rate
  • [D] none of the above

Answer: Option [A]

30. An import customer accepts a bill drawn on him. The bank will apply-
  • [A] bill selling rate
  • [B] bill acceptance rate
  • [C] TT selling rate
  • [D] no exchange rate, since no foreign exchange transaction is executed

Answer: Option [D]

31. In calculating cross rates, exchange margin is entered-
  • [A] only once int he dollar/rupee rate
  • [B] only once int he dollar/foreign currency rate
  • [C] twice in the dollar/rupee rate and dollar/foreign currency rate
  • [D] twice int he dollar/rupee rate and dollar/foreign

Answer: Option [A]

32. For calculating cross currency rates, banks in India use the dollar/foreign currency rate quotedin
  • [A] Mumbai
  • [B] London
  • [C] New York
  • [D] any international market

Answer: Option [D]

33. For option forward purchase transactions the forward premium will be reckoned
  • [A] based on earliest delivery date
  • [B] based on latest delivery date
  • [C] based on the average due date for delivery
  • [D] none of the above.

Answer: Option [A]

34. For funding the vostro acount, the bank in India will apply-
  • [A] its TT buying rate
  • [B] its TT selling rate
  • [C] interbank spot buying rate
  • [D] interbank spot selling rate

Answer: Option [C]

35. Both legs of swap will be executed
  • [A] at the same rate
  • [B] on the same date
  • [C] at different rates
  • [D] at different rates on different dates

Answer: Option [D]

36. A swap deal is executed by
  • [A] entering into another swap deal
  • [B] settling the difference int he rates
  • [C] actual delivery of currencies
  • [D] none of the above

Answer: Option [C]

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