Classical

Advanced Questions - Section 3

16:  

No. of units of domestic currency required to buy one unit of a foreign currency is known as

A.

Indirect Route

B.

Cross-Rate

C.

Direct Route

D.

Spot Rate

 
 

Option: D

Explanation :


17:  

The European Union has achieved all of the following except

A.

adopted a common fiscal policy for member nations

B.

established a common system of agricultural price supports

C.

disbanded all tariffs between its member countries

D.

levied common tariffs on products imported from nonmembers

 
 

Option: A

Explanation :


18:  

Foreign Currency Exchange Rate risk can be hedged in

A.

Options Market

B.

Futures Market

C.

Money Market

D.

All of the above

 
 

Option: D

Explanation :


19:  

Before expiry date, the time value of a call option is

A.

Strike Price - Spot Price

B.

Spot Price - Strike Price

C.

Market Premium - Intrinsic Value

D.

Intrinsic Value

 
 

Option: C

Explanation :


20:  

Boeing aircraft company was able to cover its production costs of the first jumbo jet in the seventies because Boeing could market it to several foreign airlines in addition to domestic airlines. This illustrates

A.

How economies of scale make possible a larger variety of products in international trade.

B.

A transfer of wealth from domestic consumers to domestic producers as the result of trade

C.

How a natural monopoly is forced to behave more competitively with international trade.

D.

How a natural monopoly is forced to behave less competitively with international trade.

 
 

Option: A

Explanation :




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