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 2 of 13

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Q11.
Which institutions provide the institutional structure and services for the operation of the International Monetary System?

a.

Only international financial institutions

b.

Only central banks

c.

Only commercial banks

d.

International financial institutions, central banks, and commercial banks

Discuss
Answer: (d).International financial institutions, central banks, and commercial banks Explanation:International financial institutions, central banks, and commercial banks provide the institutional structure and services for the operation of the International Monetary System.
Q12.
Suppose X has a FCNR deposit in USD with SBI, and he transfers it to Bank of India. How is this transaction recorded in the Balance of Payments (BoP)?

a.

The transaction is not recorded in the BoP

b.

The transaction is recorded in the BoP as it affects the BoP position

c.

The transaction is recorded in the BoP even though it does not affect the BoP position

d.

The recording of such transactions in the BoP is not specified

Discuss
Answer: (c).The transaction is recorded in the BoP even though it does not affect the BoP position Explanation:Transactions like the transfer of FCNR deposits between banks are recorded in the BoP even if they do not affect the BoP position as a whole.
Q13.
What are transfer payments in the context of Balance of Payments (BoP)?

a.

Payments made in return for goods and services

b.

One-sided transfers without receiving anything of economic value in return, such as aids, grants, taxes, and gifts

c.

Transactions affecting the BoP position

d.

Transactions not recorded in the BoP

Discuss
Answer: (b).One-sided transfers without receiving anything of economic value in return, such as aids, grants, taxes, and gifts Explanation:Transfer payments are described as one-sided transfers where the transfer does not receive anything of economic value in return. Examples include aids, grants, taxes, and gifts. These are recorded in the BoP under the head "Transfer Payments."
Q14.
What is one of the fundamental aspects of the international financial system?

a.

Interest of money

b.

Exchange rates

c.

National economies

d.

Private equity transactions

Discuss
Answer: (a).Interest of money Explanation:In the international financial system, the interest of money is not a subject of consideration, which is highlighted as one of its fundamental aspects.
Q15.
What does the International Financial System cover?

a.

Only interest and return-bearing assets

b.

Only bank and non-bank financial institutions

c.

Only financial markets for international trade

d.

The complete range of interest and return-bearing assets, financial institutions, and financial markets

Discuss
Answer: (d).The complete range of interest and return-bearing assets, financial institutions, and financial markets Explanation:The International Financial System covers the complete range of interest and return-bearing assets, financial institutions, and financial markets.
Q16.
What does the International Financial System depend mainly on for its effective functioning?

a.

National economies

b.

Prudent management of the International Monetary System (IMS)

c.

Private equity transactions

d.

Currency pricing

Discuss
Answer: (b).Prudent management of the International Monetary System (IMS) Explanation:The International Financial System depends mainly on the effective functioning and prudent management of the International Monetary System (IMS).
Q17.
What was the objective of devising the post-war international monetary system by the UK and the US in the early 1940s?

a.

Integration of financial markets for domestic deals

b.

Discipline for national financial markets

c.

Order and discipline for integration of financial markets for cross-border deals

d.

Development of a closed international financial system

Discuss
Answer: (c).Order and discipline for integration of financial markets for cross-border deals Explanation:The objective was to create order and discipline for the integration of financial markets for more cross-border financial deals.
Q18.
Who created the plan accepted at the Bretton Woods Conference in 1944?

a.

John Maynard Keynes and Harry Dexter

b.

UK policymakers

c.

US policymakers

d.

World Bank representatives

Discuss
Answer: (a).John Maynard Keynes and Harry Dexter Explanation:John Maynard Keynes and Harry Dexter created the plan accepted at the Bretton Woods Conference in 1944.
Q19.
What did the nations agree to at the Bretton Woods Conference regarding exchange rates?

a.

Fixed and unadjustable exchange rates

b.

Fixed but adjustable exchange rates

c.

Floating exchange rates

d.

No exchange rates

Discuss
Answer: (b).Fixed but adjustable exchange rates Explanation:The nations agreed to a system of fixed but adjustable exchange rates at the Bretton Woods Conference.
Q20.
What did the Bretton Woods system effectively provide?

a.

Gold - Euro exchange standard

b.

Gold - Yen exchange standard

c.

Gold - Dollar exchange standard

d.

Gold - Pound exchange standard

Discuss
Answer: (c).Gold - Dollar exchange standard Explanation:The Bretton Woods system effectively provided a gold - dollar exchange standard.
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