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 9 of 13

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Q81.
What steps has the government taken to boost FDI in the country?

a.

Reduced the foreign investment limit in defence manufacturing

b.

Raised the foreign investment limit in insurance to 50%

c.

Relaxed the policy in the construction sector

d.

Restricted FDI in all sectors

Discuss
Answer: (c).Relaxed the policy in the construction sector Explanation:The government has raised the foreign investment limit to 49 per cent in defence manufacturing and relaxed the policy in the construction sector.
Q82.
What is the maximum percentage of the paid-up capital of an Indian company that SEBI registered FIIs and its sub-accounts can acquire?

a.

10%

b.

15%

c.

24%

d.

5%

Discuss
Answer: (c).24% Explanation:SEBI registered FIIs and its sub-accounts can acquire up to 10% of the paid-up capital of the Indian company. However, in the case of foreign corporate or High Net-worth Individuals (HNIs) registered as sub-accounts of an FII, their investment is restricted to 5% of the paid-up capital of the Indian company. All FIIs and their sub-accounts taken together cannot acquire more than 24% of the paid-up capital of an Indian Company.
Q83.
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.
Q84.
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.
Q85.
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.
Q86.
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.
Q87.
What does Merchandise trade in the BOP cover?

a.

Services only

b.

Unilateral transfers only

c.

Moveable goods transactions

d.

Capital transactions

Discuss
Answer: (c).Moveable goods transactions Explanation:Merchandise trade in the BOP covers all transactions related to moveable goods, including the change of ownership from residents to non-residents (exports) and vice versa (imports).
Q88.
How are exports valued in the Merchandise trade in the BOP?

a.

C.I.F. basis

b.

F.O.B. basis

c.

Freight basis

d.

Insurance basis

Discuss
Answer: (b).F.O.B. basis Explanation:Exports in the Merchandise trade are valued on the F.O.B. (Free on Board) basis, separating international freight and insurance from the value of the goods.
Q89.
What is the Balance on Merchandise Trade Account in the BOP?

a.

The total value of imports

b.

The total value of exports

c.

The difference between exports and imports

d.

The sum of exports and imports

Discuss
Answer: (c).The difference between exports and imports Explanation:The Balance on Merchandise Trade Account is the difference between the total value of exports and imports, representing either a deficit or a surplus.
Q90.
When and where was the International Monetary Fund (IMF) formally created?

a.

1945, Geneva

b.

1944, Paris

c.

1945, Washington, D.C.

d.

1944, London

Discuss
Answer: (c).1945, Washington, D.C. Explanation:The International Monetary Fund (IMF) was formally created in 1945 in Washington, D.C., United States, following the Bretton Woods Conference in 1944.
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