International Finance and Treasury MCQ Questions with Answers

Please refer to International Finance and Treasury MCQ Questions with Answers provided below. These multiple-choice questions are very useful if you are planning to appear in UGC NET, IAS, or UPSC examinations. All objective-based questions are provided with solutions. Students should refer to all Management MCQ with Answers provided by us. All MCQ questions have been designed based on the latest syllabus for the current academic year and the pattern issued for upcoming examinations.

MCQ Questions International Finance and Treasury

Question. Several maturities dates are involved in issued bonds if company earnings are classified as           
A. parallel term income
B. pledged
C. volatile
D. non-volatile

Question. Financial account was earlier called as                 
A. capital account
B. current account
C. factor income
D. liability account

Question. For an investment, weighted average time to maturity is considered as   
A. premium time
B. standard time
C. mean time
D. duration

Question. In financial markets, STRIPS are also classifiedas                 
A. treasury KIBOR notes
B. treasury KIBOR bonds
C. treasury zero coupon bonds
D. treasury LIBOR bonds

Question. In Eurodollar market, decrease in demand of Euro dollars results in     
A. increase in KIBOR
B. decrease in KIBOR
C. decrease in federal funds rate
D. increase in federal funds rate

Question. Difference between face value of bond and call price of bond is considered as               
A. call premium
B. call provision
C. discount premium
D. discount provision

Question. Purchasing-power parity (PPP) refers to                 
A. the concept that the same goods should sell for the same price across countries after exchange rates are taken into account
B. the concept that interest rates across countries will eventually be the same
C. the orderly relationship between spot and forward currency exchange rates and the rates of interest between countries
D. the natural offsetting relationship provided by costs and revenues in similar market environments

Question. In commercial banks, subordinate debentures and subordinate notes are considered as             
A. stated rates
B. banks debentures
C. banks liabilities
D. banks deposits

Question. Loan-able funds theory is used to determine                   
A. savings
B. interest rate
C. future value
D. present value

Question. A country has a negative balance of trade it means the balance of payments on current account           
A. Should also be negative
B. Should be positive
C. May be positive or negative
D. Should be same as balance of trade

Question. The process of acquiring technology from other country is called:                 
A. Licensing
B. Franchising
C. Technology Transfer
D. Joint Venture

Question. Loans for education and medical is classified as loans for             
A. equilibrium goods
B. non-equilibrium goods
C. durable goods
D. non-durable goods

Question. Monetary expansion increases and there is decrease in equilibrium interest rate then supply curve of funds must shift             
A. up and to left
B. up and to right
C. down and to left
D. down and to right

Question. In treasury bills auction, treasury bills are sold at           
A. premium basis 
B. discount basis
C. competitive basis
D. federal basis

Question. Value of option issued to call debt is $670 and return rate on callable bond is $540 then return rate on non-callable bond is         
A. $1,210
B. $1,010
C. $130
D. $1,020

Question. Type of index in which current values of stock are added together and divided by value of stock on base date is classified as             
A. value weighted index
B. herring weighted index
C. primary market index
D. stock market index

Question. Maximum maturity days of holding commercial paper are             
A. 170 days
B. 270 days
C. 120 days
D. 5 days

Question. Maturity of debt instruments which faces more price fluctuations is                   
A. primary maturity
B. capital maturity
C. short term maturity
D. long term maturity

Question. Treasury bonds and notes pays interest rate is classified as       
A. LIBOR rate monthly
B. coupon interest monthly
C. coupon interest semi-annually
D. coupon interest annually

Question. Type of bonds that are swapped to less developed country against an outstanding loan are classified as   
A. Brady bonds
B. swapped bonds
C. developed bonds
D. developing bonds

Question. Interest rate on Eurobonds are paid                 
A. monthly
B. quarterly
C. annually
D. semi-annually

Question. Risk of financial institutions which states mismatching assets maturities and liabilities maturities is classified as           
A. selling intermediation
B. maturity intermediation
C. direct intermediation
D. indirect intermediation

Question. Holders of debentures receive their payments or bonds yields only after holders of                   
A. registered debt holders
B. secured debt holders
C. unsecured debt holders
D. unregistered debt holders

Question. Longer debt instrument issued by government and corporations is considered as                 
A. contraction bonds
B. expansion bonds
C. dollar bonds
D. bonds

Question. Which of the following theories suggests that firms seek to penetrate new markets over time?                 
A. Theory of Comparative Advantage
B. Imperfect Market Theory
C. Product cycle theory
D. None of the above

Question. Situation in which large portion of majority is borrowed from broker of investor is classified as                 
A. future investment
B. forward investment
C. leveraged investment
D. non-leveraged investment

Question. Agreement between two parties to exchange cash flows in future and cash flows are based on underlying instruments is classified as               
A. swaps
B. interchange
C. exchange
D. index

Question. Retail certificate of deposits which are not traded have face value of                 
A. $250,000 
B. $100,000
C. $150,000
D. $200,000

Question. The margin for a currency future should be maintained with the clearing house by                 
A. The buyer
B. The seller
C. Both the buyer and the seller
D. Either the buyer or the seller as per the agreement between them

Question. Call premium is $456 and face value of bond is $234 then call price of bonds is                   
A. $1.95
B. 1.95%
C. $222
D. $690

Question. Consider buying call option, if price of stock rises then buyer of call option has               
A. low potential of losses
B. high potential of losses
C. high potential of profit
D. low potential of profit

Question. Conversion values is $8500 and conversion rate received on stock conversion is 430 then current market price of stock is                       
A. $15.24
B. $13.24
C. $20.24
D. $19.24

Question. Cash and carry arbitrage explains the determination of                   
A. Forward Rates for currencies
B. Spot rates for currencies
C. Both forward and spot rates for currencies
D. Penalty for non-execution of forward contracts

Question. Agency problem is between                       
A. Manager and Employees
B. Manager and Government
C. Manager and Shareholders
D. Parent to Subsidiary

Question. As compared to Treasury bonds, trading of municipal bonds in trading market is considered as                 
A. more index inflation
B. less indexed inflation
C. less active
D. more active

Question. Consider buying call option, if price of stock falls then buyer of call option has             
A. high potential of profit
B. low potential of profit
C. low potential of losses
D. high potential of losses

Question. Repurchase price is subtracted from selling price divided by selling price and multiplied to 360 by number of days Up to maturity to calculate             
A. repurchase agreement yields
B. purchase agreement yields
C. repurchase yields
D. transaction yields

Question. Investors of coupon bond will receive cash flow very soon if                   
A. maturity is lower
B. maturity is higher
C. interest payment is higher
D. interest payment is lower

Question. The demand for heavy loans can cause             
A. excess funds for banks
B. deficiencies for banks
C. organized reservation
D. competitive reservations

Question. Gifts and Relief are                     
A. Merchandise Payment
B. Service Payment
C. Factory Income
D. Transfer payment

Question. Type of market in which short term instruments are traded and purchased by economic units is classified as             
A. money markets
B. capital markets
C. debt markets
D. economic markets

Question. In zero coupon bonds, impact of higher duration on maturity is that           
A. maturity will be zero
B. maturity will be elastic
C. maturity will be higher
D. maturity will be lower

Question. Superior portfolio is not basically a collection of individually               
A. good portfolio
B. good investments
C. negative securities
D. all of answer correct

Question. Source of funds for repayment of municipal bonds is considered as                   
A. local tax and revenue
B. global tax and revenue
C. print notes
D. commercial notes

Question. The legal settlement of international trade disputes is.                     
A. Negotiation
B. Arbitration
C. Litigation
D. Conciliation

Question. Shift of demand curve to down and to left then there must be               
A. support from World Bank
B. decreases in funds traded
C. increase in funds traded
D. rise of international funds

Question. Foreign bonds issued in Japan financial institutions are classified as               
A. bull dog bonds
B. bull cat bonds
C. Yankee bonds
D. samurai bonds

Question. Price of treasury notes and treasury bonds without including accrued interest is classified as                     
A. clean price
B. full price
C. dirty price
D. accrued price

Question. Position which came in to existence because of holding assets less than liabilities is considered as             
A. net surplus in assets
B. net surplus in liabilities
C. net long in currency
D. net short in currency

Question. Price at which stock is sold to investors by investment banks is called                 
A. Gross proceeds
B. cumulative proceeds
C. non-cumulative proceeds
D. net proceeds

Question. According to loanable funds theory, fall in interest rates results in to               
A. zero demand of funds
B. equilibrium demands of funds
C. higher demand of funds
D. lower demand of funds

Question. Determination of forward rates is explained by                     
A. Purchasing power parity theory
B. Uncovered interest arbitrage
C. Demand and Supply for spot currency
D. demand and supply of currency in future

Question. US and Chile agree on agreement in 2003 which is               
A. free trade agreement
B. European union
C. Berlin wall
D. NAFTA

Question. Bonds rated lower than triple-B bonds by Standard and Poor’s are considered as               
A. split bonds
B. automated bonds
C. junk bonds
D. sinking bonds

Question. Interest rate paid on traded Eurodollars is called as                   
A. London intra bank offered rate
B. London interbank offered rate
C. euro interbank offered rate
D. demand intra bank rate

Question. Type of preferred stock in which dividend does not increase or decrease with ncrease or decrease in profit of firm is classified as                 
A. non-cumulative preferred stock
B. cumulative preferred stock
C. non-participating preferred stock
D. participating preferred stock

Question. International Finance Corporation established in                       
A. 1956
B. 1960
C. 1966
D. 1970

Question. Subsidiary may be favourable to acquisitions because                         
A. Easy to incorporate
B. Can be tailored
C. Can’t be tailored
D. Easy to manage

Question. Investors who want cash flows in near terms shows preference for                 
A. interest portion of RIAPS 
B. interest portion of STORI
C. interest portion of STRIPS
D. interest portion of bonds

Question. Auction of TIPS security is classified as                   
A. premium bid auction
B. discount bid auction
C. multiple bid auction
D. One bid auction

Question. Most favourable portfolio is proficient portfolio with the                   
A. lowest risk
B. highest risk
C. highest utility
D. least investment

Question. Curve representing demand of funds shifts to left if economic growth in                   
A. global market is stagnant
B. global market is not stagnant
C. domestic market is stagnant
D. domestic market is not stagnant

Question. Global bond market consists of all bonds sold by issued companies, governments, or other firms               
A. within their own countries
B. outside their own countries
C. to London banks
D. to developing nations only

Question. Expected rate that originates at any point in future for a specific security is classified as                     
A. forward rate
B. backward rate
C. termed rate
D. structured rate

Question. Bidder who can receive allocation of treasury bills before all other bidders is result of                   
A. highest bidder
B. lower bidder
C. zero bidder
D. non-competitive bidder

Question. Interest rate considering compounding of interest rate and is earned in 12 months is considered as           
A. effective annual return
B. ineffective annual return
C. decrease in return
D. increase in return

Question. Joint venture is                                           
A. Not jointly owned by
B. Jointly owned by two or more firms
C. Acquired by firm
D. It is licensing

Question. For a particular security transaction, agreement is ’repo’ with point of view of               
A. security seller
B. security buyer
C. security function
D. security function

Question. Value of conversion option to bond holder is $220 and rate of return on nonconvertible bond is $350 then rate of return on convertible bond is                   
A. $570
B. $130
C. $670
D. $1.59

Question. The marking to market of a futures contract is done                             
A. Daily, based on the opening price for the day
B. Weekly, based on the opening pricefor the week 
C. Daily, based on the closing price for the previous day
D. Weekly based on the closing price for the previous week

Question. Earned interest rate which is reinvested in other investment is classified as                   
A. compound interest
B. investment risk
C. interest rate
D. stated rate

Question. Financial instrument such as commercial paper can be sold                   
A. issued by commercial banks
B. directly
C. with brokers or dealers
D. functional buyers

Question. Euro is the official currency of                   
A. All the States of Europe
B. All the states of European Union
C. Only 12 of the states of European Union
D. Only 10 of the States of European Union

Question. Treasury bills are issued on                     
A. treasury basis
B. corporate basis
C. premium basis
D. discount basis

Question. Depository institutions includes                     
A. mutual funds
B. commercial banks and thrifts
C. savings banks
D. credit unions

Question. Currency in which Eurobonds are denominated is decided by                     
A. buyers of bond
B. issuers of bonds
C. close market prices
D. open market prices

Question. Principal investors of US treasury bills which are issued by US treasury does not includes                       
A. mutual funds
B. extensive funds
C. corporations
D. brokers and dealers

Question. Type of option that gives right to buyer to sell underlying option at specific exercise price is considered as                 
A. call option
B. put option
C. European option
D. Australian option

Question. The threshold limit for the handloom industry as per the recent EXIM policy is:                     
A. 500 crores
B. 350 crores
C. 250 crores
D. 100 crores

Question. Gross proceeds of stock is $37000 and underwriter spread is $25000                   
A. $25,000.00
B. $37,000
C. $12,000
D. $62,000

Question. Selling price is added in to repurchase agreement paid interest to calculate                 
A. direct price of security
B. repurchase price of securities
C. purchase price of security
D. transaction price of security

Question. Liquidity risk is:                   
A. is risk investments bankers face
B. is lower for small OTC
C. is risk associated with secondary market transactions
D. increases whenever interest rates increases

Question. Type of risk in which value of liabilities and assets is affected by exchange rate is classified as                 
A. economic rates
B. foreign exchange risk
C. selling rate
D. buying rates

Question. IN negotiated sale, services provided by investment banks are                   
A. origination services 
B. document collection services
C. advising services
D. both a and c

Question. In United States, JPMorgan Chase is considered as                         
A. largest foreign exchange trading
B. smaller foreign exchange trading
C. largest bond holder
D. smaller bond holder

Question. What is the role of IMF                   
A. It controls the budgets of national government
B. It acts as a forum for international economics
C. It Observes world exchange rates, balance of payments and multilateral payments
D. It seeks to promote free international trade

Question. Current Account in BOP characterize summary of stream of funds between particular country and all other country due to                   
A. sale of assets
B. purchase of goods and services
C. liabilities of long term
D. liabilities of short term

Question. Underwriter spread of stock is added to net proceeds to calculate value of                   
A. over writer spread
B. Gross proceeds
C. participation proceeds
D. non participation proceeds

Question. Agreement which incurs transaction between two parties and promise held that second party will repurchase security at specific price is classified as           
A. repurchasing commercial notes
B. repurchase bills
C. repurchase agreement
D. reverse repurchase agreement

Question. MIGA stands for                   
A. Multilateral Investment Guarantee Agency
B. Multilateral Institutional and GovernmentAgencies 
C. Mutual Interest Guaranteeing Agencies
D. Mutual Institutional and Government Agencies

Question. The nodal agency of the Government of India for promoting the country’s externaltrade is.                   
A. Indian Trade Promotion Organisation
B. Indian Institute of Foreign Trade
C. Federation of Indian Exports
D. Trade Development Authority of India

Question. Deposit that are required in futures contract and is considered as guarantee that conditions of contracts would be fulfilled is classified as             
A. initial margin
B. futures margin
C. conditional margin
D. non-conditional margin

Question. Bonds that are not pledged against revenue stream or specific assets are classified as               
A. general obligation bonds
B. general obligation notes
C. general obligation tax
D. general obligation savings

Question. Interest rate that investors receive on financial security to calculate fair value of security is classified as     
A. forward rate of return
B. unturned rate of return
C. required rate of return
D. termed rate of return

Question. According to best efforts offering, investment bank in return of providing services must               
A. not receive fee
B. receive fee
C. receive interest rate
D. receive market rate of return

Question. Investors should be agreeing to invest in riskier investments merely                 
A. if return is short
B. if there are no safe alternatives except for holding cash
C. if expected return is adequate for risk level
D. if there are true speculators

Question. Current market price of common stock is $18 and conversion rate received on conversion is $410 to calculate             
A. $3,580
B. $5,380
C. $6,380
D. $7,380

Question. Uruguay Round that has started                   
A. earlier 8 years
B. earlier 5 years
C. earlier 10 year
D. earlier 7 years

Question. Voting ballot that is sent to stock holders by corporation is classified as               
A. corporate paper
B. white voting paper
C. screened paper
D. proxy

Question. Intrinsic value of option is subtracted from exercise price of an option to calculate                 
A. forward price of asset
B. price of underlying asset
C. future price of asset
D. spot price of asset