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Internal Finance

This document contains multiple choice questions and short notes related to internal finance topics such as foreign exchange, currency markets, capital budgeting, taxation, and international financial concepts. There are 30 multiple choice questions testing knowledge of terms and concepts as well as short descriptions or definitions of additional financial topics.

Uploaded by

Pratham Kushwaha
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23 views5 pages

Internal Finance

This document contains multiple choice questions and short notes related to internal finance topics such as foreign exchange, currency markets, capital budgeting, taxation, and international financial concepts. There are 30 multiple choice questions testing knowledge of terms and concepts as well as short descriptions or definitions of additional financial topics.

Uploaded by

Pratham Kushwaha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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INTERNAL FINANCE

Multiple Choice Questions :-


1) In the foreign exchange market, the _______ of one
country is traded for the ______ of another country.
a) Currency; Currency b) Currency; financial instruments
c) Currency; goods d) Goods; goods
2) Current account includes all of the following, except
______.
a) Merchandise balance b) Service balance c) FDI d)
Unilateral transfer
3) Euro is the official currency of _______ member
states.
a) 25 b) 28 c) 19 d) 18
4) Inverse quote for USD/DKK 5.7935 – 5.8085 is
:_______
a) DKK/USD 0.1722 – 0.1726
b) USD/DKK 0.1722 – 0.1726
c) DKK/USD 0.1726 – 0.1722
d) USD/DKK 0.1726 – 0.1722
5) Spot USD INR 60 and six months forward is USD INR
61. AFM is ________.
a) 3.33% b) 1.13% c) 2.33% d) 4.33%
6) ________ is the standardize contract to exchange one
currency for anther at a specified date in the future at
a price ( exchange rate) that is fixed on the purchased
date.
a) Future Contract
b) Options Contract
c) Swaps
d) Forward Contract
7) FEDAI stands for _______
a) Foreign Exchange Dealers Act of India
b) Foreign Exchange direct Association of India
c) Foreign Exchange Dealers Association Index
d) Foreign Exchange Dealers Association of India
8) Lower the better applies to _______ capital budgeting
method.
a)NPV b) Payback period c) IRR d) Profitability Index
9) An investor looking at reducing his risk is know as
_____.
a) Speculator b) Hedger c) Arbitrageur d) Trader
10) _______ analysis implies the study of confirming
the adequacy of proposed plant and equipment.
a) Financial analysis b) Technical analysis c) Market
analysis d) Economic analysis
11) In the ______ method, the revenues and costs of
project are estimated and then are discounted and
compare with the initial investment.
a) PBP b) IRR c) NPV d) None of these
12) FDI Stands for _______
a) Foreign Direct Intermediation
b) Foreign Domestic Investment
c) Foreign Direct Intervention
d) Foreign Direct Investment
13) Bretton Wood is a town in _______ in US
a) Boston b) Seattle c)Hampshire d) Denver
14) In spot market, exchange of currencies take place
on _______.
a) T+1 b) T+2 c) T+ 0 d) T+4
15) SBI account with HSBC in UK is an example of
______.
a) Loro b) Nostro c) Vostro d) SWIFT
16) Spot rate is also called as _______.
a) Future price
b) Forword price
c) Swap price
d) Current Market price
17) ______ is the market where foreign currencies are
bought and sold .
a) Stock market b) Forex market c) Capital market d)
debt market
18) Foreign currency forward market is :_______
a) An over the counter unorganized market
b) Organized market without trading
c) Organized listed market
d) Unorganized listed market
19) Application of Currency Futures includes _____
a) Hedging
b) Speculation
c) Arbitrage
d) All of the above
20) ______ is the debt instrument with a coupon that
change periodically accordingly to same
predetermined interest rate benchmark.
a) Floating rate notes b) Zero coupon bonds c)
Straight Euro bond d)None of the above
21) Euro currency market is utilized by _____
A) Banks b) MNCs c) Mutule Funds d) All of the
above
22) ADR’s are denominated in _______ currency.
a) US b) Euro c) GBP d) INR
23) Required Return from an Investment = ______
a) Risk Free Return + Risk Premium
b) Risk Free Return – Risk Premium
c) Risk Free Return x Risk Premium
d) Risk Free Return / Risk Premium
24) ______ can authorize a person/company to deal in
foreign exchange.
a) SEBI b)RBI c) IRDA d) Parliament
25) Formula for Profitability Index is _____
a) PV of cash inflows / PV of cash outlay
b) PV of cash inflows – PV of cash outlay
c) PV of cash inflows + PV of cash outlay
d) PV of cash inflows x PV of cash outlay
26) _____ means the transfer of corporate money from
a foreign country back to its home country.
a) Repatriation b) capital Budgeting c) Withholding
d) Non of these
27) Reserves are held in following forms, except _____.
a) Foreign Currency b) Gold c) SDR d)Silver
28) SDR is an international reserve assets, created by
____.
a) IMF b) WTO c) World Bank d) IBRD
29) Under _____ monetary unit is a associated with the
value of circulating gold coins.
a) Gold species b) Gold exchange c) Gold bullion d)
None of these
30) In Holgate Principle, If Bid< Ask, Swap points for
forward rate are to be ______.
a) Added b) Subtracted c) Multiplied d) Divided

Short Notes :-
 Economic and Technical analysis in project compressor
 Project compressor
 Transfer pricing
 Objective of taxation
 Tax haven
 Different type of foreign exchange risk
 Portfolio Management
 Speculation of forex market
 Types of capital budgeting decision
 FEMSA
 FEDAI
 Elements of international equity market
 GDR
 Types of euro
 Forword Trade

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