International Financial Management MCQ with Answer

  1. The current system of international finance is a ____.
  2. A simultaneous purchase and sale of foreign exchange for two different dates is called ___.
  3. Hedging is used by companies to:
  4. Derivative securities includes:
  5. By definition, currency appreciation occurs when:
  6. If purchasing power parity were to hold even in the short run, then:
  7. In the foreign exchange market, the ________ of one country is traded for the ________ of another country.
  8. A floating exchange rate ____.
  9. The date of settlement for a foreign exchange transaction is referred to as:
  10. Which one of the following is not a type of foreign exchange exposure?
  11. Which of the methods below may be viewed as most effective in protecting against economic exposure?
  12. The impact of Foreign exchange rate on firm is called as:
  13. Foreign currency forward market is ____.
  14. An economist will define the exchange rate between two currencies as the:
International Financial Management MCQ

Practice here the 20+ International Financial Management MCQ Questions that check your basic knowledge of International Financial Management.

  • gold standard
  • fixed exchange rate system
  • floating exchange rate system
  • managed float exchange rate system
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  • currency devalue
  • currency swap
  • currency valuation
  • currency exchange
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  • Decrease the variability of tax paid
  • Decrease the variability of expected cash flows
  • Increase the variability of expected cash flows
  • Decrease the spread between spot and forward market quotes
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  • swap contract
  • futures contract
  • option contract
  • All of the above
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  • the value of all currencies fall relative to gold.
  • the value of all currencies rise relative to gold.
  • the value of one currency rises relative to another currency.
  • the value of one currency falls relative to another currency.
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  • quoted nominal exchange rates should be stable over time.
  • real exchange rates should tend to increase over time.
  • real exchange rates should be stable over time.
  • real exchange rates should tend to decrease over time.
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  • currency; currency
  • currency; financial instruments
  • currency; goods
  • goods; goods
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  • is determined by the national governments involved
  • remains extremely stable over long periods of time
  • is determined by the actions of central banks
  • is allowed to vary according to market forces
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  • Tax exposure
  • Translation exposure
  • Transaction exposure
  • Balance sheet exposure
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  • Futures market hedging
  • Forward contract hedges
  • Geographical diversification
  • Money market hedges
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  • Operating Exposure
  • Transaction exposure
  • Translation exposure
  • Business risk
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  • An over the counter unorganized market
  • Organized market without trading
  • Organized listed market
  • Unorganized listed market
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  • Amount of one currency that must be paid in order to obtain one unit of another currency
  • Difference between total exports and total imports within a country
  • Price at which the sales and purchases of foreign goods takes place
  • Ratio of import prices to export prices for a particular country
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  • Under a fixed exchange rate regime
  • Under a flexible exchange rate regime
  • Under a dirty exchange rate regime
  • Always
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  • the actions of market-makers
  • interest rate arbitrage
  • purchasing power parity
  • stabilising speculation
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  • attempt to make profits by outguessing the market
  • make their profits through the spread between bid and offer rates of exchange
  • need foreign exchange in order to buy foreign goods
  • take advantage of the small inconsistencies that develop between markets
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  • translation risk exposure.
  • transactions risk exposure.
  • political risk exposure.
  • taxation.
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  • Investments
  • Financing decisions
  • Both a and b
  • None of the above
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  • very little information is publicly available
  • most of the news is foreign
  • it is difficult to know which news is relevant to future exchange rates
  • It is difficult to know whether the news has been obtained legally
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  • The exchange rate at which a foreign exchange dealer will convert one currency into another that particular day
  • Simultaneous purchase and sale of a given amount of foreign exchange for two different value dates
  • The short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates
  • None of the above
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