Q161: Foreign Exchange transactions involve monetary transactions
- A. among residents of the same country
- B. between residents of two countries only
- C. between residents of two or more countries
- D. among residents of at least three countries
Answer
Answer B. between residents of two countries only
Q162: Under FEMA, the RBI has been authorised to make___to carry out the provisions of the Act
- A. rules
- B. regulations
- C. both rules and regulations
- D. notifications
Answer
Answer B. regulations
Q163: The international parity conditions consist of
- A. CIRP and UIRP only
- B. UIRP, PPP, and the Fisher hypothesis only
- C. UIRP, PPP, CIRP, and the Fisher hypothesis only
- D. CIRP, UIRP, PPP, Mac PPP, and the Fisher hypothesis only
Answer
Answer C. UIRP, PPP, CIRP, and the Fisher hypothesis only
Q164: ‘Non-resident Bank Accounts’ refer to
- A. nostro account
- B. vostro account
- C. accounts opened in offshore centres
- D. none of the above
Answer
Answer B. vostro account
Q165: Non-resident bank accounts are maintained in
- A. the permitted currencies
- B. the currency of the country of the bank maintaining the account
- C. the currencies in which FCNR accounts are permitted to be maintained
- D. Indian Rupee
Answer
Answer D. Indian Rupee
Q166: The statutory basis for administration of foreign exchange in India is
- A. Foreign Exchange Regulation Act, 1973
- B. Conservation of foreign Exchange and Prevention of Smuggling Act
- C. Foreign Exchange Management Act, 1999
- D. Exchange Control Manual
Answer
Answer C. Foreign Exchange Management Act, 1999
Q167: Full-fledged money changers are authorized to undertake
- A. only sale transactions
- B. only purchase transactions
- C. all types of foreign exchange transactions
- D. purchase and sale of foreign currency notes, coins and travellers’ cheques
Answer
Answer D. purchase and sale of foreign currency notes, coins and travellers’ cheques
Q168: The acronym FEDAI stands for
- A. Foreign Exchange Dealers’ Association of India
- B. Federal Export Dealers’ Association of India
- C. Fixed Earners’ Draft Agreement on Interest
- D. None of the above
Answer
Answer A. Foreign Exchange Dealers’ Association of India
Q169: An authorised person under FEMA does not include
- A. an authorised dealer
- B. an authorised money changer
- C. an off-shore banking unit
- D. an exchange broker
Answer
Answer D. an exchange broker
Q170: The authorised dealers under FEMA are classified into___categories
- A. Three
- B. one
- C. two
- D. four
Answer
Answer A. Three
Q171: The term ‘loro account’ means
- A. our account with you
- B. your account with us
- C. their account with them
- D. none of the above
Answer
Answer C. their account with them
Q172: The term ‘Nostro account’ means
- A. our account with you
- B. your account with us
- C. their account with them
- D. none of the above
Answer
Answer A. our account with you
Q173: The term ‘Vostro account’ means
- A. our account with you
- B. your account with us
- C. their account with them
- D. none of the above
Answer
Answer B. your account with us
Q174: The market forces influencing the exchange rate are not fully operational under
- A. floating exchange rate system
- B. speculative attack on the market
- C. fixed exchange rate system
- D. current regulations of IMF
Answer
Answer C. fixed exchange rate system
Q175: According to classification by IMF, the currency system of India falls under
- A. managed floating
- B. independently floating
- C. crawling peg
- D. pegged to basket of currencies
Answer
Answer A. managed floating
Q176: Under fixed exchange rate system, the currency rate in the market is maintained through
- A. official intervention
- B. rationing of foreign exchange
- C. centralising all foreign exchange operations with central bank of the country
- D. none of the above
Answer
Answer A. official intervention
Q177: The reduction in the value of a currency due to market forces is known as
- A. revaluation
- B. depreciation
- C. appreciation
- D. inflation
Answer
Answer B. depreciation
Q178: The largest foreign exchange market in the world is
- A. Newyork
- B. London
- C. Japan
- D. Swiss
Answer
Answer B. London
Q179: Foreign exchange market is considered 24 hours market because
- A. it is open all through the day
- B. all transactions are to be settled with in 24 hours
- C. due to geographical dispersal at least one market is active at any point of time
- D. minimum 24 hours must lapse before any transaction is settled
Answer
Answer C. due to geographical dispersal at least one market is active at any point of time
Q180: The major players in the foreign exchange market are
- A. commercial banks
- B. corporates
- C. exchange brokers
- D. central bank of the country and the central government
Answer
Answer A. commercial banks
Q181: Speculation in foreign exchange market refers to
- A. buying or selling of currencies in large volumes
- B. booking of forward contracts without intention to execute
- C. buying or selling with a view to make profits from movement in rates
- D. buying or selling with a view to making riskless profits
Answer
Answer C. buying or selling with a view to make profits from movement in rates
Q182: Arbitrageur in a foreign exchange market
- A. buys when the currency is low and sells when it is high
- B. buys and sells simultaneously the currency with a view to making riskless profit
- C. sells the currency when he has a receivable in future
- D. buys or sells to make advantage of market imperfections
Answer
Answer B. buys and sells simultaneously the currency with a view to making riskless profit
Q183: The acronym SWIFT stands for
- A. Safety Width in Financial Transactions
- B. Society for Worldwide International Financial Telecommunication
- C. Society for Worldwide Interbank Financial Telecommunication
- D. Swift Worldwide Information for Financial Transactions
Answer
Answer C. Society for Worldwide Interbank Financial Telecommunication
Q184: Indirect rate in foreign exchange means –
- A. the rate quoted with the units of home currency kept fixed
- B. the rate quoted with units of foreign currency kept fixed
- C. the rate quoted in terms of a third currency
- D. none of the above
Answer
Answer A. the rate quoted with the units of home currency kept fixed
Q185: Indirect rate of exchange is quoted in India for –
- A. sale of foreign travellers’ cheque
- B. sale of rupee travellers’ cheques
- C. purchase of personal cheques
- D. none of the above
Answer
Answer D. none of the above
Q186: In direct quotation, the unit kept constant is –
- A. the local currency
- B. the foreign currency
- C. the subsidiary currency
- D. none of the above
Answer
Answer B. the foreign currency
Q187: The maxim ‘buy low; sell high’ is applicable for
- A. quotation of pound-sterling
- B. indirect rates
- C. direct rates
- D. US dollars
Answer
Answer C. direct rates
Q188: In Mumbai, US Dollar is quoted as under: USD 1 = Rs.43.6725/6875. It means
- A. The buying rate is Rs.43.6725 and selling rate is Rs.43.6875
- B. The buying rate is Rs.43.6875 and selling rate is Rs.43.6725
- C. The dollar is appreciating in value
- D. The dollar is depreciating in value
Answer
Answer A. The buying rate is Rs.43.6725 and selling rate is Rs.43.6875
Q189: In foreign exchange markets, ‘American Quotation’ refers to
- A. quotation by a US based bank
- B. quotation in New York foreign exchange market
- C. quotation in which the value of foreign currency is expressed per US dollar
- D. quotation in which the value of US dollar is expressed per unit of foreign currency
Answer
Answer D. quotation in which the value of US dollar is expressed per unit of foreign currency
Q190: Forward margin is
- A. the profit on forward contract
- B. commission payable to exchange brokers
- C. difference between the spot rate and forward rate
- D. none of the above
Answer
Answer C. difference between the spot rate and forward rate
Q191: Which of the following statements is true?
- A. Exchange exposure leads to exchange risk
- B. exchange risk leads to exchange exposure
- C. exchange exposure and exchange risk are unrelated
- D. none of the above
Answer
Answer A. Exchange exposure leads to exchange risk
Q192: Which of the following is not contained in the notes to the financial statements under IAS 1?
- A. Measurement basis used
- B. A statement of compliance with IFRS
- C. Details of specific accounting policies used
- D. Numbers of employees
Answer
Answer D. Numbers of employees
Q193: What is the term used to describe the time between the acquisition of assets for processing and their realization in cash or cash equivalents?
- A. Processing cycle
- B. Turnover
- C. Operating cycle
- D. Turnaround
Answer
Answer C. Operating cycle
Q194: Under IAS 1, which of the following must be disclosed on the face of the statement of financial position?
- A. Property, Plant and Equipment
- B. Biological Assets
- C. Provisions
- D. All of the above
Answer
Answer D. All of the above
Q195: Which sections of an annual report do IFRSs apply to?
- A. Management report
- B. Financial statements
- C. Auditors report
- D. Entire annual report
Answer
Answer B. Financial statements
Q196: Which of the following is true?
- A. IAS 1 stipulates the order in which items should be presented
- B. IAS 1 stipulates that material items that are different in nature must be presented separately
- C. IAS 1 stipulates that material items may be aggregated
- D. None of the above
Answer
Answer B. IAS 1 stipulates that material items that are different in nature must be presented separately
Q197: How many formats are permitted for income and expense items under IAS 1?
- A. One
- B. Two
- C. Three
- D. Four
Answer
Answer B. Two
Q198: Where should extraordinary items appear in an entity’s Statement of Comprehensive Income?
- A. Other Comprehensive Income
- B. Income Statement
- C. Notes
- D. Nowhere
Answer
Answer D. Nowhere
Q199: Which of the following is not a component of a Statement of Financial Position?
- A. Non-current assets
- B. Retained Earnings
- C. Cost of goods sold
- D. Deferred tax
Answer
Answer C. Cost of goods sold
Q200: Which of the following is not a requirement in the financial statements under IAS 1
- A. Name of the entity
- B. Chairman’s commentary on performance
- C. The accounting periods
- D. Presentation currency
Answer
Answer B. Chairman’s commentary on performance
