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 7 of 13

Discover more Topics under IC 89 Management Accounting

Q61.
How did investors react when the Greek government revealed falsified national budget data in 2009?

a.

Increased investment in Greek bonds

b.

Aggressive selling of Greek bonds

c.

Positive credit rating evaluations

d.

Decreased concern about sovereign default

Discuss
Answer: (b).Aggressive selling of Greek bonds Explanation:Investors reacted by aggressively selling Greek bonds when the Greek government revealed falsified national budget data in 2009.
Q62.
What is the primary difference between Foreign Direct Investment (FDI) and portfolio investment?

a.

FDI involves passive investment, while portfolio investment is active.

b.

FDI is made in financial assets, while portfolio investment is made in physical assets.

c.

FDI results in managerial control, while portfolio investment does not bring financial control.

d.

FDI and portfolio investment are synonymous terms.

Discuss
Answer: (c).FDI results in managerial control, while portfolio investment does not bring financial control. Explanation:FDI results in managerial control over the operations of the foreign entity, while portfolio investment does not bring any financial control.
Q63.
What does FDI include?

a.

Only investment through mergers and acquisitions

b.

Investment in financial assets

c.

Investment in physical assets like plant & machinery, infrastructure, and technology

d.

Only reinvestment of profits earned from overseas operations

Discuss
Answer: (c).Investment in physical assets like plant & machinery, infrastructure, and technology Explanation:FDI includes investment in physical assets like plant & machinery, infrastructure, and technology.
Q64.
What is Net FDI inflow or stock of foreign direct investment?

a.

Cumulative number for a given period

b.

Annual investment amount

c.

Short-term capital

d.

Portfolio investment

Discuss
Answer: (a).Cumulative number for a given period Explanation:Net FDI inflow or stock of foreign direct investment is the cumulative number for a given period.
Q65.
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.
Q66.
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.
Q67.
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.
Q68.
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.
Q69.
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.
Q70.
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.
Page 7 of 13