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 8 of 13

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Q71.
What is the condition for SEBI registered FIIs/sub-accounts to invest in primary issues of Non-Convertible Debentures (NCDs)/bonds?

a.

The listing of such bonds/NCDs should be committed within 30 days.

b.

The listing of such bonds/NCDs should be committed within 10 days.

c.

The listing of such bonds/NCDs should be committed within 15 days.

d.

The listing of such bonds/NCDs is not a requirement.

Discuss
Answer: (c).The listing of such bonds/NCDs should be committed within 15 days. Explanation:SEBI registered FIIs/sub-accounts can invest in primary issues of Non-Convertible Debentures (NCDs)/bonds only if the listing of such bonds/NCDs is committed to be done within 15 days of such investment.
Q72.
What action should an Indian company take if it wants to raise its FII investment limit from 24% to the sectoral cap/statutory ceiling?

a.

File a case with SEBI

b.

Inform the Finance Ministry

c.

Pass a resolution by its Board of Directors and a Special Resolution by their General Body

d.

Seek permission from the Ministry of Corporate Affairs

Discuss
Answer: (c).Pass a resolution by its Board of Directors and a Special Resolution by their General Body Explanation:An Indian company can raise up to 24% to the sectoral cap/statutory ceiling by passing a resolution by its Board of Directors followed by passing a Special Resolution to that effect by their General Body.
Q73.
What is the purpose of informing the Reserve Bank of India (RBI) when an Indian company raises the aggregate cap for FII investment?

a.

To seek approval for the decision

b.

To avoid inconvenience to the FII investors and the Indian company

c.

To report a violation of FII regulations

d.

To request an increase in the FII investment cap

Discuss
Answer: (b).To avoid inconvenience to the FII investors and the Indian company Explanation:Informing the Reserve Bank of India (RBI) when an Indian company raises the aggregate cap for FII investment is necessary to avoid inconvenience to the FII investors and the Indian company.
Q74.
What does the Balance of Payment (BOP) account measure?

a.

Flow of economic transactions within a country

b.

Flow of international payments and receipts

c.

Flow of domestic payments and receipts

d.

Flow of transactions between government and private entities

Discuss
Answer: (b).Flow of international payments and receipts Explanation:The Balance of Payment (BOP) account is the summary of the flow of economic transactions between the residents of a country and the rest of the world (ROW) during a given time period. It measures the flow of international payments and receipts.
Q75.
What are the two broad categories into which transactions in the Balance of Payment (BOP) account are classified?

a.

Goods and Services

b.

Imports and Exports

c.

Current Account and Capital Account

d.

Investments and Assets

Discuss
Answer: (c).Current Account and Capital Account Explanation:Various transactions like exports/imports of goods and services, payment of dividend/interest, investments in assets, etc., are recorded in the BoP account, and these transactions are broadly classified into the current account and capital account.
Q76.
What is the recommended basis for valuing transactions entering the Balance of Payments (BoP) account, according to the IMF manual?

a.

Historical cost

b.

Face value

c.

Market prices

d.

Book value

Discuss
Answer: (c).Market prices Explanation:The IMF manual recommends that transactions entering the BoP account should be valued at market prices, defined as the amount of money a willing buyer pays to acquire something from a willing seller when commercial considerations alone are involved.
Q77.
How are both imports and exports valued in the Balance of Payments (BoP) according to the IMF manual?

a.

Imports are valued at market prices, and exports are valued at face value

b.

Both imports and exports are valued at free on board (FOB) basis

c.

Imports are valued at book value, and exports are valued at market prices

d.

Both imports and exports are valued at historical cost

Discuss
Answer: (b).Both imports and exports are valued at free on board (FOB) basis Explanation:The IMF manual recommends that both imports and exports should be valued at free on board (FOB) basis. This means the price paid for the insurance and shipment of goods should not be included as part of the value of goods.
Q78.
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.
Q79.
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.
Q80.
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.
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