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MCQs

Total Questions : 156 | Page 12 of 16 pages
Question 111. The special provisions that can have adverse or beneficial effects and are reflected in interest rates do not include
  1.    tax-ability
  2.    covert ability
  3.    call ability
  4.    inflation premium
 Discuss Question
Answer: Option D. -> inflation premium
Answer: (d).inflation premium
Question 112. If the risk of financial security increases and the supply curve shifts to the left then the impact on equilibrium of interest rate must
  1.    decreases
  2.    increases
  3.    positive
  4.    negative
 Discuss Question
Answer: Option B. -> increases
Answer: (b).increases
Question 113. For a foreign exchange of specific currency, the non-hedged position is classified as
  1.    open position
  2.    close position
  3.    currency long position
  4.    currency short position
 Discuss Question
Answer: Option A. -> open position
Answer: (a).open position
Question 114. The services such as commercial trade transactions and positions in financial investments provided by financial institutions are classified as
  1.    trade services
  2.    investment services
  3.    agent services
  4.    commercial services
 Discuss Question
Answer: Option C. -> agent services
Answer: (c).agent services
Question 115. The larger fluctuations in portfolio value of foreign exchange of financial institutions leads to
  1.    greater liquidity of assets
  2.    greater volatility of rates
  3.    lesser volatility of rates
  4.    lesser liquidity of assets
 Discuss Question
Answer: Option B. -> greater volatility of rates
Answer: (b).greater volatility of rates
Question 116. The position which came in to existence because of holding assets less than liabilities is considered as
  1.    net surplus in assets
  2.    net surplus in liabilities
  3.    net long in currency
  4.    net short in currency
 Discuss Question
Answer: Option D. -> net short in currency
Answer: (d).net short in currency
Question 117. The theory according to which the difference between expected appreciation and foreign interest must be equal to domestic interest rate, is called
  1.    interest rate parity theorem
  2.    appreciation parity theorem
  3.    domestic parity theorem
  4.    foreign interest parity theorem
 Discuss Question
Answer: Option A. -> interest rate parity theorem
Answer: (a).interest rate parity theorem
Question 118. In equilibrium position, the spread between foreign and domestic rate of interest must be equal to spread of
  1.    domestic rates
  2.    forward and spot exchange rates
  3.    forward rate
  4.    spot rates
 Discuss Question
Answer: Option B. -> forward and spot exchange rates
Answer: (b).forward and spot exchange rates
Question 119. The rule which states that similar set of goods and services produced in various countries should have equal price is classified as
  1.    law of similar mortgage rate
  2.    law of one type manufacturing
  3.    law of similar labor rules
  4.    law of one price
 Discuss Question
Answer: Option D. -> law of one price
Answer: (d).law of one price
Question 120. The reasons for smaller exposure of foreign exchange than US money center are
  1.    regulations
  2.    prudent individuals
  3.    smaller size of assets
  4.    all of the above
 Discuss Question
Answer: Option D. -> all of the above
Answer: (d).all of the above

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