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290+ International Financial Management Solved MCQs

Chapters
Unit 1

Unit 2

Unit 3

Unit 4

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Chapter: Unit 4

201. A macro-assessment of country risk:

A. is adjusted for the particular business of the firm involved.

B. excludes all aspects relevant to a particular firm or project.

C. A and B

D. none of the above

Answer» B. excludes all aspects relevant to a particular firm or project.

discuss
202. The checklist approach:

A. requires several inspections of the country being evaluated.

B. requires the use of discriminant analysis to assess country risk.

C. requires ratings and weights to be assigned to all factors relevant in assessing country risk.

D. involves the collection of independent opinions on country risk.

Answer» C. requires ratings and weights to be assigned to all factors relevant in assessing
country risk.
discuss

203. Insurance purchased to cover the risk of expropriation __________, and will
typically cover __________.

A. will be the same for all firms; only a portion of the firm's total exposure.

B. will be the same for all firms; all of the firm's total exposure.

C. will be dependent on the firm's risk; all of the firm's total exposure.

D. will be dependent on the firm's risk; only a portion of the firm's total exposure.

Answer» D. will be dependent on the firm's risk; only a portion of the firm's total exposure.
discuss

204. If a foreign country follows the "Purchase Homemade Products" philosophy,

the least effective strategy would be for a UK firm to:

A. use a licensing arrangement with a local firm in that country.

B. enter into a joint venture in that country.

develop a subsidiary (under the US name) that manufactures and sells products in that
C.
country.

D. develop a subsidiary (under the US name) that manufactures products in that

Answer» C. develop a subsidiary (under the US name) that manufactures and sells products in
that country.
discuss
205. A firm may incorporate a country risk rating into the capital budgeting analysis
by:

adjusting the NPV upward if the country risk rating has fallen (implying increased risk)
A.
below a benchmark level.

adjusting the discount rate upward as the country risk rating decreases (implying increased
B.
risk).

C. A and B

D. none of the above

Answer» B. adjusting the discount rate upward as the country risk rating decreases (implying
increased risk).
discuss

206. ______________ is(are) not a form of political risk.

A. Exchange rate movements

B. Attitude of consumers in the host country

C. Actions of the host government

D. Blockage of fund transfers

Answer» A. Exchange rate movements

discuss

207. When quantifying country risk:

A. weights should be equally allocated among factors.

weights should be assigned to the political and financial factors according to their
B.
perceived importance.

it is not generally necessary to construct separate ratings for political and financial risk since
C.
these will be equally weighed in the final analysis.

D. the derived factors will be identical for all MNCs conducting business in that country.

Answer» B. weights should be assigned to the political and financial factors according to their
perceived importance.
discuss
208. An argument for MNCs to have a debt-intensive capital structure is:

A. they are well diversified.

B. foreign government tax rules may change over time.

C. exposure to exchange rate fluctuations.

D. exposure to fund blockage.

Answer» A. they are well diversified.

discuss

209. The capital asset pricing theory is based on the premise that:

A. only unsystematic variability in cash flows is relevant.

B. only systematic variability in cash flows is relevant.

C. both systematic and unsystematic variability in cash flows are relevant.

D. neither systematic nor unsystematic variability in cash flows is relevant.

Answer» B. only systematic variability in cash flows is relevant.

discuss

210. One argument for why subsidiaries should be wholly-owned by the parent is
that:

A. the potential conflict of interests between the MNC's managers and shareholders is avoided.

the potential conflict of interests between the MNC's majority shareholders and minority
B.
shareholders is avoided.

C. the potential conflict of interests between the MNC's existing creditors is avoid

Answer» B. the potential conflict of interests between the MNC's majority shareholders and
minority shareholders is avoided.
discuss
211. Other things being equal, countries with relatively _______ populations and
_______ inflation are more likely to have a low cost of capital.

A. young; high

B. old; high

C. old; low

D. young; low

Answer» C. old; low

discuss

212. According to the text:

A. the cost of debt for each country is somewhat stable over time.

the cost of debt for countries change over time, and these changes are negatively
B.
correlated.

C. the cost of debt for countries change over time, and these changes are positively correlat

Answer» C. the cost of debt for countries change over time, and these changes are positively
correlat
discuss

213. Which of the following is not a factor that favorably affects an MNC's cost of
capital, according to your text?

A. exchange rate risk.

B. size.

C. access to international capital markets.

D. international diversification.

Answer» A. exchange rate risk.

discuss
214. MNC Corporation has a beta of 2.0. The risk-free rate of interest is 5%, and the
return on the stock market overall is expected to be 13%. What is the required
rate of return on MNC stock?

A. 21%.

B. 41%.

C. 16%.

D. 13%.

Answer» A. 21%.
discuss

215. In general, MNCs probably prefer to use ____________ foreign debt when their
foreign subsidiaries are subject to potentially ___________ local currencies.

A. more; strong

B. more; weak

C. less; strong

D. less; weak

Answer» B. more; weak

discuss
216. To the extent that individual economies are ______ each other, net cash flows
from a portfolio of subsidiaries should exhibit ______ variability, which may
reduce the probability of bankruptcy.

A. dependent on; less

B. independent of; less

C. dependent on; more

D. independent of; more

Answer» C. dependent on; more

discuss

217. The lower a project's beta, the _______ is the project's _________ risk.

A. lower; systematic

B. lower; unsystematic

C. higher; systematic

D. higher; unsystematic

Answer» A. lower; systematic

discuss

218. The profitability index is:

A. Net present value/Initial outlay.

B. Initial outlay/Gross present value.

C. Gross present volume/Initial outlay.

D. Gross present value/Net present value.

Answer» C. Gross present volume/Initial outlay.

discuss
219. Which of the following is a correct method of adjusting for inflation when
calculating net present value?

Estimate the future cash flows by multiplying by the specific inflation of each cash inflow
A.
and outflow item, and then discount using the real rate of return.

B. Estimate the cash flows in real terms and use a real discount rate.

C. Estimate the cash flows in money terms and use a real discount rate.

D. Estimate the cash flows in real terms and use a money discount rate.

Answer» B. Estimate the cash flows in real terms and use a real discount rate.
discuss

220. The relationship between the money rate of return, m, the real rate of return, h,
and the inflation rate, i, is expressed in which of the following formulae?

A. h = 1 + i / 1 + m

B. m = h + i

C. (1 + m) = (1 + h)i

D. 1 + h = (1 + m) / (1 + i)

Answer» D. 1 + h = (1 + m) / (1 + i)
discuss
221. Which of the following is true? A. Risk is the probability of an outturn being
less than anticipated. B. An objective probability is one which can be
established mathematically or from historical data. C. The discount rate may be
raised or lowered to allow for the risk of a project, the extent of the risk
premium being based on indisputable theory.

A. B

B. C

C. A

D. none

Answer» A. B
discuss

222. Which of the following statements about sensitivity analysis is false?

Sensitivity analysis allows the decision maker to direct search effort by highlighting
A.
variables which, when they change by a small percentage, have a large impact on NPV.

Sensitivity analysis can be used to highlight variables of greatest significance to NPV, which
B. then allows monitoring in the implementation phase and the drawing up of contingency
plans.

Sensitivity analysis allows decision makers to be more informed about project sensitivities,
C. to know what room they have for judgemental error and decide whether they are prepared
to accept the risks.

Sensitivity analysis permits the decision maker to change all the variables simultaneously
D.
and thereby examine a project in various different circumstance

Answer» D. Sensitivity analysis permits the decision maker to change all the variables
simultaneously and thereby examine a project in various different circumstance
discuss

223. Which of the following does not obey the mean-variance rule?

Project X will be preferred to project Y if the standard deviation on X and Y is the same, but
A.
the expected return on Y is lower.

Answer» D. Project X will be preferred to project Y if the variance of X is higher than Y and the
expected return is lower than Y.
223. Which of the following does not obey the mean-variance rule?

Project X will be preferred to project Y if the expected return on X exceeds that of Y and the
B.
variance is equal to or less than that of Y.

Project X will be preferred to project Y if the expected return on X and Y is the same, but Y
C.
has a higher standard deviation.

Project X will be preferred to project Y if the variance of X is higher than Y and the expected
D.
return is lower than Y.

Answer» D. Project X will be preferred to project Y if the variance of X is higher than Y and the
expected return is lower than Y.
discuss

224. The impact of blocked funds on the net present value of a foreign project will
be greater if interest rates are _______ in the host country and there are _______
investment opportunities in the host country.

A. very high; limited

B. very low; limited

C. very low; numerous

D. very high; numerous

Answer» B. very low; limited

discuss
225. Assume that Baps Corporation is considering the establishment of a subsidiary
in Norway. The initial investment required by the parent is $5,000,000. If the
project is undertaken, Baps would terminate the project after four years. Baps'
cost of capital is 13%, and the project is of the same risk as Baps' existing
projects. All cash flows generated from the project will be remitted to the
parent at the end of each year. Listed below are the estimated cash flows the
Norwegian subsidiary will generate over the project's lifetime in Norwegian
kroner (NOK): Year 1 NOK 10,000,000 Year 2 NOK 15,000,000 Year 3 NOK
17,000,000 Year 4 NOK 20,000,000 The current exchange rate of the Norwegian
kroner is $.135. Baps' exchange rate forecast for the Norwegian kroner over the
project's lifetime is listed below: Year 1 $.13 Year 2 $.14 Year 3 $.12 Year 4 $.15
Baps is also uncertain regarding the cost of capital. Recently, Norway has been
involved in some political turmoil. What is the net p

A. -$17,602.62.

B. $8,000,000

C. $1,048,829.

D. $645,147.

Answer» D. $645,147.
discuss

226. When a foreign subsidiary is not wholly owned by the parent and a foreign
project is partially financed with retained earnings of the parent and of the
subsidiary, then:

A. the parent's perspective should be used to evaluate a foreign project.

B. the subsidiary's perspective should be used to evaluate a foreign project.

C. the foreign project should enhance the value of both the parent and the subsidiary.

D. none of the above

Answer» C. the foreign project should enhance the value of both the parent and the subsidiary.
discuss
227. An international project's NPV is _________ related to the size of the initial
investment and _________ related to the project's required rate of return.

A. positively; positively

B. positive; negatively

C. negatively; positively

D. negatively; negatively

Answer» D. negatively; negatively

discuss

228. If an MNC sells a product in a foreign country and imports partially

manufactured components needed for production to that country from the
U.S., then the local economy's inflation will have:

A. a more pronounced impact on revenues than on costs.

B. a less pronounced impact on revenues than on costs.

C. the same impact on revenues as on costs.

D. none of the above

Answer» A. a more pronounced impact on revenues than on costs.

discuss

229. Which of the following would probably not cause the stock price of a foreign
target to decrease?

A. Its expected cash flows decline.

B. General stock market conditions in the foreign country are deteriorating.

C. Investors anticipate that the target will be acquir

Answer» C. Investors anticipate that the target will be acquir

discuss
230. Other things being equal, a foreign subsidiary in China would more likely be
divested by the U.S. parent if new information caused the parent to suddenly
anticipate that:

A. the Chinese yuan would depreciate in the future.

B. the Chinese yuan would appreciate in the future.

C. the Chinese yuan would remain somewhat stable in the future.

none of the above; the value of the Chinese yuan has no impact on the feasibility of a
D.
divestiture.

Answer» A. the Chinese yuan would depreciate in the future.

discuss

231. When quantifying country risk:

A. weights should be equally allocated among factors. 186

weights should be assigned to the political and financial factors according to their perceived
B.
importance.

it is not generally necessary to construct separate ratings for political and financial risk since
C.
these will be equally weighed in the final analysis.

D. the derived factors will be identical for all MNCs conducting business in that country.

Answer» B. weights should be assigned to the political and financial factors according to their
perceived importance.
discuss
232. The most preferred form of securities for funding by firms in the U.S. is

A. debt

B. preferred stock

C. common stock

D. stock derivatives

Answer» A. debt
discuss

233. Which one of the following new issues of stock has the greatest probability of
lowering its cost of equity capital?

A. Microsoft in the New York markets

B. Toyota on the Tokyo exchange

C. Apple stock on the London exchange

D. all of the above

Answer» C. Apple stock on the London exchange

discuss

234. When computing the weighted average cost of capital, the weighting should
be proportional based on the ______ rather than the _____ value of the firm.

A. book, market

B. hypothetical, book

C. market, analyst's

D. market, book

Answer» D. market, book

discuss
235. The rate of return on its existing assets that a firm must earn to maintain the
current value of the firm's stock is called the:

A. return on equity.

B. internal rate of return.

C. weighted average cost of capital.

D. weighted average cost of equity.

Answer» C. weighted average cost of capital.

discuss

236. Which one of the following is a correct statement regarding a firm's weighted
average cost of capital (WACC)?

A. An increase in the market risk premium will tend to decrease a firm's WACC.

B. A reduction in the risk level of a firm will tend to increase the firm's WACC.

C. A 5 percent increase in a firm's debt-equity ratio will tend to increase the firm's WACC.

The WACC can be used as the required return for all new projects with similar risk to that of
D.
the existing firm.

Answer» D. The WACC can be used as the required return for all new projects with similar risk to
that of the existing firm.
discuss
237. Capital structure weights are based on the:

A. market values of a firm's debt and equity.

B. market value of a firm's equity and the face value of its debt.

C. initial issue values of a firm's debt and equity.

D. book value of a firm's debt and equity.

Answer» A. market values of a firm's debt and equity.

discuss

238. Which one of the following represents the best estimate for a firm's pre-tax
cost of debt?

A. the current yield-to-maturity on the firm's existing debt

B. the firm's historical cost of capital

C. twice the rate of return currently offered on risk-free securities

D. the current coupon on the firm's existing debt

Answer» A. the current yield-to-maturity on the firm's existing debt

discuss

239. A project may be regarded as high risk project when

A. It has smaller variance of outcome but a high initial investment

B. It has larger variance of outcome and high initial investment

C. It has smaller variance of outcome and a low initial investment

D. It has larger variance of outcome and low initial investment

Answer» A. It has smaller variance of outcome but a high initial investment

discuss
240. Following is (are) the method(s) for adjustment of risks

A. Risk-adjusted Discounting Rate

B. Risk Equivalence Coefficient Method

C. Both (A) and (B)

D. None of the above

Answer» C. Both (A) and (B)

discuss

241. With limited finance and a number of project proposals at hand, select that
package of projects which has

A. The maximum net present value

B. Internal rate of return is greater than cost of capital

C. Profitability index is greater than unity

D. Any of the above

Answer» A. The maximum net present value

discuss

More MCQs

242. Which of the following is a legitimate reason for international investment?

A. Dividends from a foreign subsidiary are tax exempt in the United States.

B. Most governments do not tax foreign corporations.

Answer» C. There are possible benefits from international diversification.

242. Which of the following is a legitimate reason for international investment?

C. There are possible benefits from international diversification.

D. International investments have less political risk than domestic investments.

Answer» C. There are possible benefits from international diversification.

discuss

243. Theory which considers change in exchange rate with fluctuations in inflation
rates is classified as

A. liquidated power parity

B. purchasing power parity

C. selling power parity

D. volatile power parity

Answer» B. purchasing power parity

discuss

244. If purchasing power parity were to hold even in the short run, then:

A. real exchange rates should tend to decrease over time.

B. quoted nominal exchange rates should be stable over time.

C. real exchange rates should tend to increase over time.

D. real exchange rates should be stable over time.

Answer» D. real exchange rates should be stable over time.

discuss

245. Given a home country and a foreign country, purchasing power parity suggests
that:

the home currency will appreciate if the current home inflation rate exceeds the current
A.
foreign inflation rate

Answer» C. the home currency will depreciate if the current home inflation rate exceeds the
current foreign inflation rate
245. Given a home country and a foreign country, purchasing power parity suggests
that:
the home currency will depreciate if the current home interest rate exceeds the current
B.
foreign interest rate

the home currency will depreciate if the current home inflation rate exceeds the current
C.
foreign inflation rate

the home currency will depreciate if the current home inflation rate exceeds the current
D.
foreign interest rate

Answer» C. the home currency will depreciate if the current home inflation rate exceeds the
current foreign inflation rate
discuss

246. Interest Rate Parity (IRP) implies that:

Interest rates should change by an equal amount but in the opposite direction to the
A.
difference in inflation rates between two countries

The difference in interest rates in different currencies for securities of similar risk and
B. maturity should be consistent with the forward rate discount or premium for the foreign
currency

The interest rates between two countries start in equilibrium, any change in the differential

Answer» B. The difference in interest rates in different currencies for securities of similar risk and
maturity should be consistent with the forward rate discount or premium for the foreign
currency
246. Interest Rate Parity (IRP) implies that:

C. rate of inflation between the two countries tends to be offset over the longterm by an equal
but opposite change in the spot exchange rate

D. In the long run real interest rate between two countries will be equal

Answer» B. The difference in interest rates in different currencies for securities of similar risk and
maturity should be consistent with the forward rate discount or premium for the foreign
currency
discuss

247. In equilibrium position, spread between foreign and domestic rate of interest
must be equal to spread of

A. domestic rates

B. forward and spot exchange rates

C. forward rate

D. spot rates

Answer» B. forward and spot exchange rates

discuss

248. Rule which states that similar set of goods and services produced in various
countries should have equal price is classified as

A. law of similar mortgage rate

B. law of one type manufacturing

C. law of similar labor rules

D. law of one price

Answer» D. law of one price

discuss

249. Example of derivative securities includes

A. swap contract

Answer» D. all of above

249. Example of derivative securities includes

B. option contract

C. futures contract

D. all of above

Answer» D. all of above

discuss

250. Authority which intervenes directly or indirectly in foreign exchange markets

by altering interest rates is considered as

A. central government

B. centralized stocks

C. central corporations

D. centralized instruments

Answer» A. central government

discuss

251. The forward market is especially well-suited to offer hedging protection against

A. translation risk exposure.

Answer» B. transactions risk exposure.

251. The forward market is especially well-suited to offer hedging protection against

B. transactions risk exposure.

C. political risk exposure.

D. taxation.

Answer» B. transactions risk exposure.

discuss

252. Suppose that the Japanese yen is selling at a forward discount in the forward-
exchange market. This implies that most likely

A. this currency has low exchange-rate risk.

B. this currency is gaining strength in relation to the dollar.

C. interest rates are higher in Japan than in the United States.

D. interest rates are declining in Japan.

Answer» C. interest rates are higher in Japan than in the United States.
discuss

253. Hedging is used by companies to:

A. Decrease the variability of tax paid

B. Decrease the spread between spot and forward market quotes

C. Increase the variability of expected cash flows

D. Decrease the variability of expected cash flows

Answer» D. Decrease the variability of expected cash flows

discuss

254. Which of the following is true of foreign exchange markets?

The futures market is mainly used by hedgers while the forward market is mainly used for
A.
speculating.

Answer» C. The futures market is mainly used by speculators while the forward market is mainly
used for hedging.
254. Which of the following is true of foreign exchange markets?

B. The futures market and the forward market are mainly used for hedging.

The futures market is mainly used by speculators while the forward market is mainly used
C.
for hedging.

D. The futures market and the forward market are mainly used for speculating.

Answer» C. The futures market is mainly used by speculators while the forward market is mainly
used for hedging.
discuss

255. Exchange rates

A. are always fixed

B. fluctuate to equate the quantity of foreign exchange demanded with the quantity supplied

C. fluctuate to equate imports and exports

D. fluctuate to equate rates of interest in various countries

Answer» B. fluctuate to equate the quantity of foreign exchange demanded with the quantity
supplied
discuss
256. An arbitrageur in foreign exchange is a person who

A. earns illegal profit by manipulating foreign exchange

B. causes differences in exchange rates in different geographic markets

simultaneously buys large amounts of a currency in one market and sell it in another
C.
market

D. None of the above

Answer» C. simultaneously buys large amounts of a currency in one market and sell it in another
market
discuss

257. A speculator in foreign exchange is a person who

buys foreign currency, hoping to profit by selling it a a higher exchange rate at some later
A.
date

B. earns illegal profit by manipulation foreign exchange

C. causes differences in exchange rates in different geographic markets

D. None of the above

Answer» A. buys foreign currency, hoping to profit by selling it a a higher exchange rate at some
later date
discuss

258. A floating exchange rate

A. is determined by the national governments involved

B. remains extremely stable over long periods of time

C. is determined by the actions of central banks

D. is allowed to vary according to market forces

Answer» D. is allowed to vary according to market forces

discuss
259. The current system of international finance is a

A. gold standard

B. fixed exchange rate system

C. floating exchange rate system

D. managed float exchange rate system

Answer» D. managed float exchange rate system

discuss

260. A simultaneous purchase and sale of foreign exchange for two different dates
is called

A. currency devalue

B. currency swap

C. currency valuation

D. currency exchange

Answer» B. currency swap

discuss
261. Investment can be defined.

A. Person’s dedication to purchasing a house or flat

B. Use of capital on assets to receive returns

C. Usage of money on a production process of products and services

D. Net additions made to the nation’s capital stocks

Answer» B. Use of capital on assets to receive returns

discuss

262. The concept of Financial management is.

A. Profit maximization

B. All features of obtaining and using financial resources for company operations

C. Organization of funds

D. Effective Management of every company

Answer» B. All features of obtaining and using financial resources for company operations
discuss

263. What is the primary goal of financial management?

A. To minimise the risk

B. To maximise the owner’s wealth

C. To maximise the return

D. To raise profit

Answer» B. To maximise the owner’s wealth

discuss

264. The finance manager is accountable for.

A. Earning capital assets of the company

B. Effective management of a fund

Answer» C. Arrangement of financial resources

264. The finance manager is accountable for.

C. Arrangement of financial resources

D. Proper utilisation of funds

Answer» C. Arrangement of financial resources

discuss

265. The market value of a share is responsible for.

A. The investment market

B. The government

C. Shareholders

D. The respective companies

Answer» A. The investment market

discuss

266. The capital budget is associated with.

A. Long terms and short terms assets

B. Fixed assets

C. Long terms assets

D. Short term assets

Answer» C. Long terms assets
discuss

267. CAPM stands for.

A. Capital asset pricing model.

B. Capital amount printing model.

C. Capital amount pricing model.

D. Capital asset printing model.

Answer» A. Capital asset pricing model.

discuss

268. What does financial leverage measure?

A. No change with EBIT and EPS

B. The sensibility of EBIT with % change with respect to output

C. The sensibility of EPS with % change in the EBIT level

D. % variation in the level of production

Answer» C. The sensibility of EPS with % change in the EBIT level

discuss

269. From the below-mentioned items which are financial assets?

A. Machines

B. Bonds

C. Stocks

D. B and C

Answer» C. Stocks
discuss
270. Trade between two countries can be useful if cost ratios of goods are:

A. Undetermined

B. Decreasing

C. Equal

D. Different

Answer» D. Different
discuss

271. The term Euro Currency market refers to

A. The international foreign exchange market

The market where the borrowing and lending of currencies take place outside the country of
B.
issue

C. The countries which have adopted Euro as their currency

D. The market in which Euro is exchanged for other currencies

Answer» B. The market where the borrowing and lending of currencies take place outside the
country of issue
discuss
272. Which of the following theories suggests that firms seek to penetrate new
markets over time?

A. Imperfect Market Theory

B. Product cycle theory

C. Theory of Comparative Advantage

D. None of the above

Answer» B. Product cycle theory

discuss

273. Dumping refers to:

A. Reducing tariffs

B. Sale of goods abroad at low a price, below their cost and price in home market

C. Buying goods at low prices abroad and selling at higher prices locally

D. Expensive goods selling for low prices

Answer» B. Sale of goods abroad at low a price, below their cost and price in home market
discuss

274. International trade and domestic trade differ because of:

A. Different government policies

B. Immobility of factors

C. Trade restrictions

D. All of the above

Answer» D. All of the above

discuss
275. The margin for a currency future should be maintained with the clearing house
by

A. The seller

B. The buyer

C. Either the buyer or the seller as per the agreement between them

D. Both the buyer and the seller

Answer» D. Both the buyer and the seller

discuss

276. The following statement with respect to currency option is wrong

A. Foreign currency- Rupee option is available in India

B. An American option can be executed on any day during its currency

C. Put option gives the buyer the right to sell the foreign currency

D. Call option will be used by exporters

Answer» D. Call option will be used by exporters

discuss
277. Govt. policy about exports and imports is called:

A. Commercial policy

B. Fiscal policy

C. Monetary policy

D. Finance policy

Answer» A. Commercial policy

discuss

278. Which of the following is international trade:

A. Trade between countries

B. Trade between regions

C. Trade between provinces

D. Both (b) and (c)

Answer» A. Trade between countries

discuss

279. Market in which currencies buy and sell and their prices settle on is called the

A. International bond market

B. International capital market

C. Foreign exchange market

D. Eurocurrency market

Answer» C. Foreign exchange market

discuss

280. Purchasing goods from a foreign country is called

A. Import

B. Entrepot

Answer» A. Import
280. Purchasing goods from a foreign country is called

C. Export

D. Re-Export

Answer» A. Import
discuss

281. Goods imported for the purpose of export is known as

A. Home trade

B. Foreign trade

C. Entrepot

D. Trade

Answer» C. Entrepot
discuss

282. Agents are appointed by?

A. Manufacturer

B. Wholesaler

C. Retailer

D. Principal
Answer» D. Principal
discuss

283. Who among these can check the price fluctuations in the market by holding
back the goods when prices fall and releasing the goods when prices rise

A. Agent

B. Mercantile agent

C. Wholesaler

D. Retailer

Answer» C. Wholesaler
discuss

284. These are agents whose function is to bring the buyer and the seller into
contact.

A. Commission agent

B. Selling agent

C. Broker

D. Stockist

Answer» C. Broker
discuss

285. Who among the following appoints the agent

A. Principal

B. Retailer

C. Manufacturer

D. Wholesaler

Answer» A. Principal
discuss
286. Which among the following is not concerned with Chambers of Commerce &
Industry

A. CII

B. FICCI

C. ICICI

D. ASSOCHAM

Answer» C. ICICI
discuss

287. One example of Small scale Fixed retailers among these is

A. Pedlars

B. General stores

C. Hawkers

D. Cheap Jacks

Answer» B. General stores

discuss
288. This retail business acts as a universal supplier of a wide variety of products.

A. Multiple shop

B. Mail order Business

C. Tele-shopping

D. Departmental store

Answer» D. Departmental store

discuss

289. What is the Bill receivable account?

A. Personal Account

B. Machinery Account

C. Real Account

D. Nominal Account

Answer» C. Real Account

discuss

290. A bill of exchange includes.

A. An order to pay

B. A request to pay

C. A promise to pay

D. All the above

Answer» A. An order to pay

discuss
291. Which bill is drawn and accepted in the same country?

A. Trade Bill

B. Foreign Bill

C. Inland Bill

D. Accommodation Bill

Answer» C. Inland Bill

discuss

292. Who draws a bill of exchange?

A. Creditor

B. Debtor

C. Holder

D. None of the above

Answer» C. Holder
discuss (1)

293. What is the person known as who draws a bill of exchange

A. Drawer

B. Payee

C. Drawee

D. None of the above

Answer» A. Drawer
discuss
294. What are the three additional days known as that a drawer gives to the drawee
for payment

A. Conditional days

B. Additional days

C. Days of grace

D. Days of rebate

Answer» C. Days of grace

discuss

295. When the drawee signs the bill, it is considered as

A. Accepted

B. Retired

C. Renewed

D. Endorsed

Answer» A. Accepted
discuss
296. What kind of acceptance is known as when the bill is accepted without any
condition?

A. Qualified acceptance

B. Conditional acceptance

C. Blank acceptance

D. General acceptance

Answer» D. General acceptance

discuss

297. When the bill is noted from the notary public, it is known as?

A. Noting

B. Discounting

C. Accepting

D. None of the above

Answer» A. Noting
discuss

298. What is retiring a bill under rebate means?

A. Making a payment of the bill before the due date

B. Dishonoring of a bill

C. Making a payment of the bill after the due date

D. All of the above

Answer» A. Making a payment of the bill before the due date

discuss

299. The most widely used monetary policy tool among these is.

A. Open market operations

Answer» A. Open market operations

 299. The most widely used monetary policy tool among these is.

B. Issuing of notes

C. Close market operations

D. Discount rate

Answer» A. Open market operations

discuss

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