OM

CHAPTERWISE QUESTIONS

1.XYZ company is facing transaction exposure. Which of the following suggestions is suitable to the company ?

a.Currency swap b.Currency futures c.a+b      d.All of these

2.XYZ company agreed for import of goods 5000 units from CUMINs Australia. Amount payable after three months. Amount to be paid in Aus $ 10,000. The spot quotation today is AUD = 40.50/60. After one months the spot rate is 60.50/60.

XYZ company is facing which risk

a.Transaction risk   b .Translation risk   c.Operational risk   d.Liquidity risk

3.XYZ company has 15 branches in US. XYZ company publishes balance sheet every year on 31st march. As on 31.3.15 exchange rate is  USD = 40.15/25. As on 31.3.2016 the rate is USD = 38.25/30. As on 31.3.2016 what risk is XYZ company is facing ?

a.Cross currency risk   b.Accounting risk c.Operational risk d.Liquidity risk

 NEW

3.A import bill for GBP 100,000 is to be retired by TT margin 0.20% (ignore cash discount / premium)

GBP/USD =1.5975 / 85

USD/INR 48.14 / 15.

IMPORTER'S BANK IS YES BANK

EXPORTER'S BANK IS NO BANK.

importer is Ravi and company

exporter is White company

Who is selling the Foreign currency ? 

a.Yes bank      b.No bank     c.Ravi and company     d.White company

If there is a margin What should be done with the margin ?

a.Add margin to quotation     b.Subtract margin from the quotation       c.a+b       d.None of these

What is thef quotation given to the customer

a.48.14 + forward rate    b.  48.14 - forward rate    c.77.1225 + forward rate    d. 77.1225 - forward rate