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 5 of 13

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Q41.
How can a foreign direct investor acquire voting power in an enterprise?

a.

Only through participating in equity as a joint venture

b.

Only through acquiring shares in an associated enterprise

c.

Through various methods, including incorporating a wholly owned subsidiary, acquiring shares, merger, or participating in an equity joint venture

d.

Only by incorporating a wholly owned subsidiary

Discuss
Answer: (c).Through various methods, including incorporating a wholly owned subsidiary, acquiring shares, merger, or participating in an equity joint venture Explanation:There are various methods through which a foreign direct investor may acquire voting power in an enterprise.
Q42.
What is NOT an objective of Foreign Direct Investment (FDI)?

a.

Achieving economies of scale and comparative advantages

b.

Enjoying tax benefits in certain projects

c.

Increasing domestic production only

d.

Attacking and combating foreign competition

Discuss
Answer: (c).Increasing domestic production only Explanation:There are various objectives of FDI, but increasing domestic production is not.
Q43.
How is FDI allowed under the Automatic Route in India?

a.

Only with the prior approval of the Government

b.

Without prior approval either of the Government or the Reserve Bank of India

c.

Only in certain specified sectors

d.

Only after examination and consideration by the Foreign Investment Promotion Board (FIPB)

Discuss
Answer: (b).Without prior approval either of the Government or the Reserve Bank of India Explanation:FDI is allowed under the Automatic Route without prior approval either of the Government or the Reserve Bank of India.
Q44.
What is the role of the Foreign Investment Promotion Board (FIPB) in India's FDI Policy?

a.

Determine pricing for FDI

b.

Examine and consider FDI under the Government Route

c.

Issue consolidated FDI Policy

d.

Report FDI to the Reserve Bank of India

Discuss
Answer: (b).Examine and consider FDI under the Government Route Explanation:The FIPB examines and considers FDI under the Government Route in India's FDI Policy.
Q45.
When is foreign investment considered as FDI?

a.

Only if it involves upfront pricing

b.

Only if it is made in fully convertible debentures

c.

Only if it is made in equity shares

d.

If it is made in equity shares, fully and mandatorily convertible preference shares, and fully and mandatorily convertible debentures with upfront pricing

Discuss
Answer: (d).If it is made in equity shares, fully and mandatorily convertible preference shares, and fully and mandatorily convertible debentures with upfront pricing Explanation:Foreign investment is considered as FDI if it is made in equity shares, fully and mandatorily convertible preference shares, and fully and mandatorily convertible debentures with upfront pricing.
Q46.
What is the requirement for the pricing or conversion formula of convertible capital instruments according to the FDI policy?

a.

It should be decided at the time of conversion

b.

It should be determined upfront at the time of issue

c.

It should be lower than the fair value worked out at the time of issuance

d.

It should be decided based on the extant FEMA regulations

Discuss
Answer: (b).It should be determined upfront at the time of issue Explanation:The pricing or conversion formula of convertible capital instruments should be determined upfront at the time of issue, according to the FDI policy.
Q47.
What are the permissible methods for an Indian company to receive the amount of consideration for shares or convertible debentures under the FDI Scheme?

a.

Only through inward remittance

b.

Only through debit to NRE/FCNR account

c.

Multiple methods including inward remittance, debit to NRE/FCNR account, and conversion of royalty or technical knowhow fee

d.

Only through conversion of import payables

Discuss
Answer: (c).Multiple methods including inward remittance, debit to NRE/FCNR account, and conversion of royalty or technical knowhow fee Explanation:There are multiple methods, including inward remittance, debit to NRE/FCNR account, and conversion of royalty or technical knowhow fee, for an Indian company to receive the amount of consideration for shares or convertible debentures.
Q48.
What happens if shares or convertible debentures are not issued within 180 days from the date of receipt of inward remittance or debit to NRE/FCNR/Escrow account?

a.

The company is fined by the Reserve Bank

b.

The amount received shall be refunded

c.

The company is obligated to issue shares after 180 days

d.

The amount is forfeited by the government

Discuss
Answer: (b).The amount received shall be refunded Explanation:if shares or convertible debentures are not issued within 180 days, the amount shall be refunded.
Q49.
Under what conditions may the Reserve Bank permit an Indian company to refund or allot shares after the 180-day period?

a.

Without any conditions

b.

If the company provides sufficient reasons

c.

If the company receives a penalty notice

d.

If the FIPB approves the request

Discuss
Answer: (b).If the company provides sufficient reasons Explanation:The Reserve Bank may permit an Indian company to refund or allot shares after the 180-day period for sufficient reasons.
Q50.
In which sectors has FDI not been prohibited under the Government Route or the Automatic Route?

a.

Information Technology

b.

Atomic Energy

c.

Tourism

d.

Education

Discuss
Answer: (b).Atomic Energy Explanation:There are some sectors where FDI has not been prohibited, including Atomic Energy.
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