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 3 of 13

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Q21.
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.
Q22.
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.
Q23.
What are the roles of the International Monetary Fund (IMF) and the World Bank in the international monetary system?

a.

Enforcing exchange rates

b.

Facilitating international credit creation

c.

Accelerating implementation of domestic policies

d.

Creating a closed financial system

Discuss
Answer: (b).Facilitating international credit creation Explanation:The IMF and the World Bank were created to accelerate the implementation of the plan and facilitate international credit creation among other roles.
Q24.
What has contributed phenomenally to the growth of the global financial market in the last six decades?

a.

Regional conflicts

b.

Second World War

c.

International finance

d.

Domestic financial policies

Discuss
Answer: (b).Second World War Explanation:The enormous growth in international trade and commerce is attributed to the period following the Second World War.
Q25.
In the Balance of Payments (BoP) accounting system, how many aspects does every transaction have?

a.

One

b.

Two

c.

Three

d.

Four

Discuss
Answer: (b).Two Explanation:The BoP accounting system follows a standard double-entry bookkeeping system, where every transaction has two aspects – one as a credit and the other as a debit.
Q26.
What is the logic behind the double-entry bookkeeping system in the BoP accounting?

a.

To complicate the accounting process

b.

To ensure every transaction has multiple aspects

c.

To simplify the accounting process

d.

To eliminate the need for debit and credit entries

Discuss
Answer: (b).To ensure every transaction has multiple aspects Explanation:The logic behind the double-entry bookkeeping system in the BoP accounting is to ensure that every transaction has two aspects – one as a credit and one as a debit.
Q27.
How is the balance maintained in the Balance of Payments (BoP) accounting?

a.

By eliminating transfer payments

b.

By treating transfer payments as trade in goods

c.

By balancing credit and debit entries

d.

By ignoring transfer payments

Discuss
Answer: (c).By balancing credit and debit entries Explanation:The BoP account always balances because for every credit entry, there is a corresponding debit entry. Transfer payments are treated as trade in goodwill to maintain this balance.
Q28.
How are credit transactions recorded in the BoP accounting?

a.

With a plus sign

b.

With a minus sign

c.

Without any sign

d.

With an asterisk

Discuss
Answer: (a).With a plus sign Explanation:Credit transactions in the BoP accounting are recorded with a plus sign.
Q29.
What is the impact on the BoP account when a country exports goods to another country?

a.

Credit entry

b.

Debit entry

c.

No impact

d.

Both credit and debit entries

Discuss
Answer: (a).Credit entry Explanation:When a country exports goods, it creates demand for the domestic currency, resulting in a credit entry in the BoP account.
Q30.
How does the BoP account represent imports in terms of currency flow?

a.

Credit entry

b.

Debit entry

c.

No impact

d.

Both credit and debit entries

Discuss
Answer: (b).Debit entry Explanation:Imports increase the supply of the domestic currency, leading to a debit entry in the BoP account as it represents a use of foreign currency.
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