Foreign Exchange Management - Questions & Answers for Competitive Exams | GkSeries

49. The reduction in the value of a currency due to market forces is known as

• [A] Appreciation
• [B] Revaluation
• [C] Depletion
• [D] Depreciation

Answer: Option [D]

50. Paper currency was used for internal use and gold was used for international settlement under _________ standard

• [A] IMF
• [B] gold bullion
• [C] fixed
• [D] floating

Answer: Option [B]

51. Convertibility of rupee refers to its convertibility into a ______ as desired by its holder.

• [A] foreign currency
• [B] local currency
• [C] Bank Notes
• [D] Demand Draft

Answer: Option [A]

52. Balance of payment records _________ transactions of the country with outsiders

• [A] economic
• [B] debit
• [C] credit
• [D] cash

Answer: Option [A]

53. Generally exports are recorded at _________ value in balance of payments

• [A] FOB
• [B] CIF
• [C] CPT
• [D] CIP

Answer: Option [A]

54. The current account of balance of payments includes

• [A] unilateral payments
• [B] portfolio investments
• [C] short term borrowings
• [D] long term borrowings

Answer: Option [A]

55. Basic balance in balance of payments refers to

• [A] the balance of payments on current account
• [B] the combined balance of current and capital accounts
• [C] the balance in official reserves account
• [D] the total of balance of current account and balances on long term items in capital account.

Answer: Option [D]

56. TT buying rate is applicable for transactions where-

• [A] remittance is received by telecommunicaton
• [B] remittance is sent by telecommunication
• [C] the nostro account of the bank is already debited
• [D] the nostro account of the bank is already credited

Answer: Option [D]

57. A 'credit in balance of payments indicates

• [A] accumulation of bank balances abroad
• [B] foreign direct investment received into the country
• [C] earning of foreign exchange by the country
• [D] earning of foreign exchange or incurring of liability abroad or decrease in asset abroad

Answer: Option [D]

58. Rupee is partially convertible on

• [A] current account
• [B] vostro account
• [C] capital account
• [D] nostro account

Answer: Option [C]

59. The rate used for all transactions that do not involve handling of documents by the banks is

• [A] TT buying Rate
• [B] TT selling rate
• [C] Bill selling rate
• [D] Bill buying rate

Answer: Option [B]

60. The bank should verify the letter of credit/sale contract for booking a-

• [A] forward sale contract
• [B] forward purchase contract
• [C] cancelleing a forward contract
• [D] none of the above

Answer: Option [C]