International Financial Management MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on International Financial Management, a fundamental topic in the field of IC 89 Management Accounting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our International Financial Management MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of International Financial Management mcq questions that explore various aspects of International Financial Management problems. Each MCQ is crafted to challenge your understanding of International Financial Management principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 89 Management Accounting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our International Financial Management MCQs are your pathway to success in mastering this essential IC 89 Management Accounting topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of International Financial Management. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your International Financial Management knowledge to the test? Let's get started with our carefully curated MCQs!

International Financial Management MCQs | Page 12 of 13

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Q111.
What conditions apply to the exit of a non-resident investor in a listed company after the lock-in period?

a.

Exit at the initial investment amount

b.

Exit at a price decided by the investor

c.

Exit at the market price prevailing at the stock exchanges

d.

Exit only after obtaining approval from the Reserve Bank of India

Discuss
Answer: (c).Exit at the market price prevailing at the stock exchanges Explanation:For a listed company, the non-resident investor can exit at the market price prevailing at the stock exchanges after the lock-in period.
Q112.
What change has the RBI made regarding the issuance of non-convertible redeemable preference shares or debentures to non-resident shareholders?

a.

Issuance is prohibited

b.

Permission is granted on a case-by-case basis

c.

Issuance is allowed as a bonus from General Reserves under a Scheme of Arrangement

d.

Issuance is allowed only through a public offering

Discuss
Answer: (c).Issuance is allowed as a bonus from General Reserves under a Scheme of Arrangement Explanation:The RBI has decided that an Indian company may issue non-convertible redeemable preference shares or debentures to non-resident shareholders as a bonus from its General Reserves under a Scheme of Arrangement approved by a Court in India.
Q113.
What condition applies to the issuance of preference shares and convertible debentures under the FDI scheme?

a.

Approval from the Income Tax Authorities

b.

No-objection from the Reserve Bank of India

c.

A.P (DIR series) Circular No 73 & 74 compliance

d.

Compliance with A.P (DIR series) Circular No 84

Discuss
Answer: (c).A.P (DIR series) Circular No 73 & 74 compliance Explanation:The issuance of preference shares and convertible debentures under the FDI scheme would continue to be subject to A.P (DIR series) Circular No 73 & 74 dated June 8, 2007.
Q114.
What is the significance of the optionality clauses allowed by the RBI in equity shares and convertible preference shares/debentures?

a.

It obliges investors to hold the securities indefinitely

b.

It allows investors to exit at an assured price

c.

It facilitates buy-back of securities from investors

d.

It requires investors to convert their securities into equity

Discuss
Answer: (c).It facilitates buy-back of securities from investors Explanation:Optionality clauses, without any option or right to exit at an assured price, may be allowed in equity shares and compulsorily convertible preference shares/debentures. These clauses obligate the buy-back of securities from investors at the price prevailing at the time of exercise of the optionality.
Q115.
What is the minimum lock-in period for instruments with optionality clauses under the FDI scheme?

a.

6 months

b.

1 year

c.

2 years

d.

3 years

Discuss
Answer: (b).1 year Explanation:Instruments with optionality clauses shall have a lock-in period of 1 year or a minimum locked-in period as prescribed under FDI Regulations, whichever is higher.
Q116.
In the case of an unlisted company, how can a non-resident investor exit after the lock-in period?

a.

At any desired price

b.

At a price exceeding the return on equity

c.

At a price not exceeding the return on equity

d.

Only with the approval of the Reserve Bank of India

Discuss
Answer: (c).At a price not exceeding the return on equity Explanation:In the case of an unlisted company, a non-resident investor can exit at a price not exceeding that arrived at on the basis of Return on Equity as per the latest audited Balance Sheet after the lock-in period.
Q117.
What was the FDI figure in May 2014?

a.

$1.44 billion

b.

$3.60 billion

c.

$7.23 billion

d.

$2 billion

Discuss
Answer: (b).$3.60 billion Explanation:In May 2014, the FDI figure was $3.60 billion.
Q118.
In 2013-14, what was the total FDI inflow in India?

a.

$5.39 billion

b.

$7.23 billion

c.

$22.42 billion

d.

$24.29 billion

Discuss
Answer: (d).$24.29 billion Explanation:In 2013-14, FDI inflows in India were $24.29 billion.
Q119.
What steps has the government taken to boost FDI in the country?

a.

Reduced the foreign investment limit in defence manufacturing

b.

Raised the foreign investment limit in insurance to 50%

c.

Relaxed the policy in the construction sector

d.

Restricted FDI in all sectors

Discuss
Answer: (c).Relaxed the policy in the construction sector Explanation:The government has raised the foreign investment limit to 49 per cent in defence manufacturing and relaxed the policy in the construction sector.
Q120.
What is the maximum percentage of the paid-up capital of an Indian company that SEBI registered FIIs and its sub-accounts can acquire?

a.

10%

b.

15%

c.

24%

d.

5%

Discuss
Answer: (c).24% Explanation:SEBI registered FIIs and its sub-accounts can acquire up to 10% of the paid-up capital of the Indian company. However, in the case of foreign corporate or High Net-worth Individuals (HNIs) registered as sub-accounts of an FII, their investment is restricted to 5% of the paid-up capital of the Indian company. All FIIs and their sub-accounts taken together cannot acquire more than 24% of the paid-up capital of an Indian Company.
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