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Wednesday, July 21, 2021

Elements Of Economics Theory - Mcqs

July 21, 2021 0
Elements Of Economics Theory - Mcqs


1) Which one of the following is NOT an aspect of the assumption of rationality?

A) Complexity in behavior
B) Consistency in behavior
C) Complete information
D) Clarity of purpose

2) Which of these does not line within the scope of Managerial Economics?

A) Profit management
B) Demand analysis
C) Cost and production analysis
D) Balance of Payments

3) Identify which of these does not satisfy the basic assumptions of economics.

A) A worker cannot work for 24 hours a day
B) Apples cannot grow in dessert region
C) A consumer aims at maximization of satisfaction
D) A businessman may maximize profits by trading in illegal goods.

4) __________ is also known as aggregative economics.

A) Managerial Economics
B) Micro Euonomics
C) Business Economics
D) Macro Economics

5) According to __________ Economics is a study of man's action in the ordinary business of life.

A) Alfred Marshall
B) Paul Samuelson
C) Adam Smith
D) Lionel Robbins

6) Which of these is the reason that makes Marshall's definition oí Economics classificatory in nature?

A) It classifies welfare into material and non material welfare
B) It classifies economics into microeconomics and macroeconomics
C) It classifies resources into scarce and abundant
D) None of the above

7) Economic growth is best depicted by ________.

A) Upward movement on the given PPC
B) Outward shift in PPC
C) Downward movement on the given PPC
D) Inward shift in PPC

8) Price mechanism works efficiently provided there is:

A) Stability in the value of money
B) Existence of perfect competition
C) Reasonable equality in the distribution of wealth
D) All of the above

9) Which of these statements is true?

A) All values can rise or fail together
B) All wealth is money
C) All prices can rise or fall together
D) Only economic goods possess utility

10) Under economic statics

A) All variables refer to different points of time.
B) The concern is only with the final outcome of the relationship between variables
C) The entire process of change is traced
D) Supply in time period t is a function of Price in time period t - 1.

11) Those goods whose supply is limited in relation to their demand is known as

A) Scattered goods 
B) Economic goods 
C) Abundant goods
D) Free goods

12) When an object after having been disturbed restore its original position, it is a case of

A) Static Equilibrium
B) Stable Equilibrium
C) Unstable Equilibrium
D) Neutral Equilibrium

13) Which of these factors can cause competition to become imperfect?

A) Product is homogeneous
B) Product is heterogeneous
C) Sellers are price makers
D) B and C

14) Economic forces do not get sufficient time to bring about complete adjustment in the case of __________ equilibrium.

A) Short tem
B) Long term
C) Partial
D) General

15) Under perfect competition, the shape of AR and MR curves is __________.

A) Horizontal straight line
B) Vertical straight line
C) Parallel to X-axis
D) Both Aand C

16) The shape of AR and MR curves under imperfect competition is __________.

A) Vertical straight line
B) Hovizontal straight line
C) Upward sloping
D) Downward sloping

17) Match list (a) with list (b)

List (a)

List (b)

i. Raw materials

1. Non durable good

ii. Air

2. Free good

iii. Roads

3. Intermediate good

iv. Toothpaste

4. Public good

A) i - 2, ii - 1, iii - 3, iv - 4
B) i - 3, ii - 2, iii - 4, iv - 1
C) i - 4, ii - 3, iii - 1, iv - 2
D) i - 3, ii - 4, iii - 2, iv - 1

18) Match list (a) with list (b)

List (a)

List (b)

i. L. Robbins

1. Welfare approach

ii. A. Marshall

2. Wealth approach

iii. A. Smith

3. Economics is what the economists do.

iv. J. Viner

4. Scarcity approach

A) i - 4, ii - 3, iii - 2, iv - 1
B) i - 1, ii - 2, iii - 3, iv - 4
C) i - 4, ii - 1, iii - 2, iv - 3
D) i - 4, ii - 2, iii - 1, iv - 3

19) The three basic propositions of the 'Scarcity' definition of economics are

A) Ends, Scare Means & Alternative Uses
B) Ends, Wealth and Welfare
C) Wealth, Welfare & Money
D) Utility, Scarcity and Transferability

20) Which one of the following is NOT a fundamental economic problem?

A) How to allocate resources
B) What technique of production of use
C) Population explosion
D) How to distribute National Income

21) Any combination of two goods lying inside the production possibility frontier represents _______ of resources.

A) Growth
B) Scarcity
C) Under utilization 
D) Full utilization

22) The underlying assumptions (s) for the Price Mechanism to function efficiently is/are

A) Perfect Competition 
B) Stable Monetary System 
C) Free Market
D) All of the above

23) Which of the following is NOT an area of Microeconomics?

A) Producer's equilibrium
B) Consumer's equilibrium
C) Theory of factor pricing
D) Inflation

24) Which of these is a limitation of 'Robbins' definition of Economics?

A) It classifies welfare into material and non material welfare
C) It is Universal in nature
C) It covers only microeconomics
D) All of the above

25) Utility means ___________.

A) Satisfaction derived from consumption
B) Usefulness of a good
C) Power of a good to satisfy a want
D) Pleasure derived from consuming a good

26) Luxury is defined as ___________ consumption.

A) Necessary
B) Subsistence
C) Comfort
D) Superfluous

27) Any commodity to have exchange value must possess three attributes:

A) Form, place, time
B) Utility, scarcity, transferability
C) Utility, abundance, marketability
D) Satisfaction, usefulness, pleasure

28) Increase in economic goods is synonymous with increase in __________.

A) Wealth
B) Welfare
C) Utility
D) Desire

29) Which of these statements is true with regard to Capital goods?

A) They are known as goods of the first order
B) They are used for final consumption
C) They are known as goods of he second order 
D) They give satisfaction directly

30) Which of these is a characteristic of durable goods?

A) They have single use
B) They are repairable
C) They are purchased repeatedly
D) They are perishable

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Thursday, July 15, 2021

Elements Of Economics Theory Mcqs

July 15, 2021 0
Elements Of Economics Theory Mcqs

MCQS = OCTOBER 2013 - 14

OCTOBER - 2013

1. Increase in economic goods is synonymous with increase in

A) Desire
B) Utility
C) Wealth
D) Welfare

2. Value of a commodity refers to its __________.

A) Purchasing power
B) Price
C) Utility
D) Usefulness

3. Producers goods are also known as __________.

A) Goods of the First Order
B) Goods of the Second Order
C) Goods of the Fourth Order
D) Goods of the Third Order

4. When a slight disturbance evokes further disturbance so that the original position is never restored, it is a case of _________ equilibrium.

A) Stable
B) Unstable
C) Partial
D) Neutral

5. Business economics is ________ in nature.

A) Managerial
B) International
C) Descriptive
D) Prescriptive

6. Marshall's definition of Economics has been criticized by

A) Ricardo
B) Ruskin
C) Adam Smith
D) Robbins

7. Another name for Production Possibility Curve is __________ Curve.

A) Transformation
B) Maximum
C) Growth
D) Utilization

8. In economics, we assume that there is _________ stability in the economy.

A) Political
B) Economic
C) Technological
D) Seasonal

9. Which theory is generally included under micro economics?

A) Income theory
B) Employment theory 
C) Development theory
D) Price theory

10. The price elasticity of firm's average revenue curve is equal to infinity in case of

A) Perfect Competition
B) Monopoly
C) Monopolistic Competition
D) Oligopoly



1. Which of the following is not an example of transferable goods?

A) Computer
B) Singer's talent
C) Land
D) Building

2. Theory of income and employment is a subject matter of __________.

A) Micro Economics
B) Macro Economics
C) Managerial Economics
D) Business Economics

3. According to Robbins, economics is ________ as regards ends.

A) Normative
B) Positive
C) Neutral
D) Negative

4. Economic forces do not get sufficient time to bring about complete adjustment in case of _________ equilibrium.

A) General
B) Partial
C) Short-term
D) Long-term

5. Any combination of two goods lying inside the production possibility frontier represents ________ of rosources.

A) Under - utilization 
B) Un - utilization
C) Fuller utilization
D) Growth

6. Under perfect competition, the shape of AR and MR curves is ________.

A) Horizontal straight line
B) Vertical straight line
C) Parallel to Y-axis
D) Both B and C

7. What among the following is not an economic problem?

A) Unlimited wants
B) Social justice
C) Choice between wants
D) Resources having alternative uses

8. Which of the following group comes under basic needs and necessities?

A) Food, Housing, Luxury
B) Food, Clothing, Shelter
C) Food, Shelter, Education
D) Food, Housing, Medication

9. Carlyle and Ruskin called Economics as a ________ Science.

A) Social
B) Physical
C) Dismal
D) Universal

10. Value-in-exchange of a commodity refers to its __________

A) Longevity
B) Scarcity
C) Purchasing power 
D) Utility

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Tuesday, July 13, 2021

Advanced Accounting - Accounting for Amalgamations

July 13, 2021 0
Advanced Accounting - Accounting for Amalgamations

UNIT - 1



The term amalgamation is used when two or more existing companies go in to liquidation and a new company is formed to take over their business. The term absorption is used when one or more existing companies go into liquidation & one existing company takes over or purchases their businesses. However this difference between amalgamation & absorption has been dispensed with the Accounting Standard (AS-14) ‘Accounting for Amalgamations’ issued by ICAI. Thus amalgamation means merging of one company with another company or merging of two or more companies to form a new company or one company is taken over by the other. Hence amalgamation includes absorption. In amalgamation the assets & liabilities of transferor company(ies) are amalgamated with the transferee company. 
AS-14 specifies the procedure of accounting for amalgamations and the treatment of any resultant goodwill or reserves. The following terms are used in this standard with reference to amalgamation of companies.

a) Amalgamation : means an amalgamation pursuant to the provisions of Companies Act, 1956 or any other statute, which may be applicable to companies.
b) Transferor : Company means the company which is amalgamated in to another co.
c) Transferee : Company means the company into which Transferor Company is amalgamated.
d) Reserve : Means the portion of earnings, receipts or other surplus of an enterprise (Whether (C) Capital or (R) Revenue) appropriated by the management for a general or a specific purpose other than a provision for depreciation or diminution in value of assets or for known liability.

Types of Amalgamation:

Amalgamation for accounting purpose can be classified into two categories.

1. Amalgamation in the nature of merger
2. Amalgamation in the nature of purchase.

Amalgamation in the nature of Merger:

This is a type of amalgamation which satisfies all the following conditions.

1. All the liabilities and assets of the transferor company become after amalgamation, The liabilities and assets of the transferee Company.
2. Shareholders holding not less than 90% of the face value of the equity shares of the transferor company become equity shareholders of transferee company by virtue of the amalgamation.
3. The consideration for the amalgamation receivable by those equity shareholders of transferor company who agree to become equity shareholders of the transferee company is discharged by the transferee company wholly by issue of equity shares in transferee company except that cash may be paid for in respect of any fractional shares.
4. The business of the transferor company is intended to be carried on by the transferee Company
5. No adjustment is intended to be made to the book value of the assets and liabilities of Transferor Company when they are incorporated in the accounts of Transferee Company, except to ensure that the accounting policies are uniform.

Amalgamation in the nature of Purchase: 

Amalgamation may be considered in the nature of purchase when any one or more of the five conditions specified for amalgamation in the nature of merger is not satisfied. These amalgamations which are in effect a mode by which one company acquires another company & hence the equity shareholders of the combining entities do not continue to have a proportionate share in the equity of the combined entity or the business of the acquired company is not intended to be continued after amalgamation.

Purchase Consideration:

According to AS-14, purchase consideration for the amalgamations means the aggregate of the shares & securities issued and the payment made in the form of cash or other assets by the transferee company to the shareholders of the transferor company. Purchase consideration does not include the amount of liabilities taken over by the transferee company or the amount paid directly to the creditors of the transferee company.

There are differented methods in which consideration may be calculated :

1. Lump Sum method :

This is the simplest method. The amount to be paid by Transferee Company as purchase consideration may be stated in the problem as lump sum. In such case no calculation is required. For example it may be stated that A Ltd. takes over the business of B Ltd. for Rs. 25,00,000. Hence the sum of Rs. 25,00,000 is purchase consideration.

2. Net Payment Method :

Under this method, the purchase consideration is ascertained adding up the total payments made by transferee in whatever form either in shares, debentures or in cash to the liquidator of the transferor company for payment to equity shareholders and preference shareholders of the transferor company. While ascertaining the purchase consideration, care should be taken of the following:

a) The value of assets and liabilities taken over by the transferee company are not to be considered.
b) The payments made by the transferee company for shareholders whether in cash or in shares or in debentures must be taken into account.
c) Where the liabilities are taken over by the transferee company & subsequently discharged such amount should not be added to purchase consideration.
d) When liabilities are taken over by transferee company they are neither deducted nor added to the amount arrived at as purchase consideration.
e) Any payments made by transferee company to some other party on behalf of the transferor company are to be ignored.
f) If the liquidation expenses of the transferor company are paid by the transferee company the same 
should not be taken as a part of the purchase consideration.
g) If any liability is not taken over by the transferee the same should be excluded.
h) The term business will always mean both the Assets and Liabilities of the company.

3. Net Assets Method :

Normally the net payment method is used to compute the purchase consideration. However, it cannot be used if details of all payments are not available e.g. in case where the purchasing company agrees to pay, say by way of 1,000 shares and the balance in cash, the purchase consideration is determined by adding up the ‘agreed values of all assets taken over’ and deducting the ‘agreed value of all liabilities taken over’. While determining the amount of purchase consideration under this method, care should be taken of the following:

a) The term ‘Assets’ will always include cash in hand and cash at bank, unless otherwise stated but shall not include any fictitious assets like preliminary expenses, underwriting commission, discount on issue of shares or debentures, profit and loss account (debit balance), etc. 
b) Asset not taken over by Transferee company should be excluded.
c) If there is goodwill or prepaid expenses, the same should be included in the assets taken over unless otherwise stated.
d) The term ‘liabilities’ will mean all liabilities to third parties.
e) The term ‘trade liabilities’ will mean trade creditors and bills payable. 
f) The term ‘liabilities’ shall not include any past accumulated profits and reserves such as general reserve, reserve fund, sinking fund, dividend equalization fund, capital reserve, share premium account, capital redemption reserve account, profit and loss account etc. These are payable to the shareholders and notto the third parties. 
g) If any fund or portion of any fund denotes liability to third parties the same must be included in Liabilities such as staff provident fund, workmen’s savings bank account, workmen’s profit sharing fund, workmen’s compensation fund (up to the amount of claim if any), etc.
h) If any liability is not taken over by the transferee the same should be excluded.
i) The term businesses will always means both the Assets and Liabilities of the Company.

4. Intrinsic worth/ Share Exchange Method :

In this method, purchase consideration is ascertained on the basis of the ratio in which the shares of the transferee company are to be exchanged for the shares of the transferor company. The exchange ratio is generally determined on the basis of the intrinsic value of each company shares.

Methods of Accounting for Amalgamations :

According to AS 14 there are two methods of accounting for amalgamations : 

1. Pooling of Interests Method : 

This method issued in case of amalgamation in nature of merger. The accounting is done in the following manner.
a. The assets, liabilities, profit & loss account and reserves (whether capital, revenue or revaluation reserves) of the transferor company are recorded in the books of the transferee company at the same values and in the same form as at the date of amalgamation. This reflects the fact that the entries are simply merged together. No goodwill account should be accounted for.
b. If at the time of amalgamation, the transferor and transferee companies have conflicting accounting policies, a uniform set of accounting policies should be adopted following amalgamation.
c. The difference between the amounts recorded as share capital issued (plus any additional consideration in the form of cash or other assets) and the amount of share capital of Transferor Company should be adjusted against reserves of Transferee Company.

2. Purchase Method :

This method is used for amalgamation in nature of purchase. The application of method involves the following:
a) The assets and liabilities of the transferor company should be incorporated in the books of transferee company on the basis of their agreed values (i.e. either book values or the fair values).
b) The reserves (whether capital, revenue or revaluation reserves) of the transferor company other than the statutory reserves should not be included in the financial statements of the transferee company. 
c) Any excess of the purchase consideration over the value of net assets of the transferor company should be treated as goodwill and debited to goodwill account. On the other hand if purchase consideration is lower than the value of net assets acquired, the difference should be credited to capital reserve. AS-14 recommends that goodwill arising on amalgamation should be amortized over a period of five years unless a somewhat longer period can be justified. 
d) No reserves, other than statutory reserves, of the transferor company should be incorporated in the financial statements of the Transferee Company. Statutory reserves of the transferor company should be incorporated in the balance sheet of the transferee company by way of the following journal entry.

Amalgamation Adjustment A/c             Dr.
               To Statutory Reserves A/c 

When the above statutory reserves will no longer be required to be maintained by transferee company, such reserves will be eliminated by reversing the above entry.

Journal Entries in the Books of Transferor Company:

1 Assets Transfer :

Realisation A/C                     Dr
                To Assets A/C

2. Transfer of Liabilities taken over by transferee company :

Liabilities A/C                       Dr
          To Realisation A/c

3. Transfer preference share capital to preference share holder :

Preference share capital A/C Dr
                 To preference share holder A/C

4. Transfer of Equity Capital & Reserves :

Equity Share Capital A/C Dr
Reserves & Surplus A/C Dr
               To Equity Share holder A/C

5. Transfer of Accumulated Losses or Fictitious Assets :

Equity Shareholders A/C Dr
                To Accumulated Loss/Ficti. Assets A/C

6. For Purchase Consideration Due :

Transferee Company A/c       Dr
           To Realisation A/C

7. For Purchase Consideration received :

Cash / Bank A/C                Dr
Equity Shares / Preference Shares / Deb.  In Transferee Co A/C         Dr
                To Transferee Co A/C

8. For Disposing assets not taken over by Transferee Co :

Cash / Bank A/C                   Dr
               To Realisation A/C

9. For payment of liabilities not taken over by Transferee company :

Liabilities A/c               Dr
                  To Cash / Bank A/C

10. For liquidation expenses : 

a. Paid by Transferor Company

Realisation A/C Dr
           To Cash / Bank A/C

b. Paid by Transferee Company

 No Entry

c. Paid first by Transferor and later recovered

 Transferee Co A/C                Dr.
                       To Cash A/C
 Cash A/C                              Dr.
                       To Transferee Co A/C

11. Payment of Preference shareholders :

Preference share holder A/C      Dr 
               To Equity/Pref Sh. in Transferee Co/ Cash /Bank A/C

12. To close Realisation Accounts :

a. In Case of Profit : 

Realisation A/C               Dr
             To Equity share holder A/C

b. In Case of Loss : 

Equity share holder A/C Dr
               To Realisation A/C 

13. Close Equity Share Holder Accounts :

Equity shareholders A/C Dr
              To Equity share / Preference Share / Cash / Bank A/C

Advanced Accounting

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Saturday, July 10, 2021


July 10, 2021 0

MCQS = 2010 - 2011

1) The intra-personal aspects of organizational behavior like motivation, personality, perception, attitude, opinion, and learning owe thelir study to ___________.

a) Sociology
b) Social Psychology 
c) Psychology
d) Anthropology

2) _________ is useful in measuring, understanding, and changing attitudes, communication patterns, the ways in which group activities can satisfy individual needs, and in group-decision making process

a) Political Science 
b) Sociology
c) Social Psychology 
d) Psychology

3) _________ is the result of the processes, internal or external to the individual, that rouse enthusiasm and persistence to pursue a certain course of action.

a) Perception
b) Leaning
c) Attitude
d) Motivation

4)  A perceiver affected by _________ principle tends to see in another person, traits that they themselves possess.

a) Contraction
b) Rejection
c) Extraction
d) Projection

5) ________ refers to the set of traits and behaviors that characterize an individual.

a) Personality
b) Punishment
c) Perception
d) Person

6) The process of assigning meaning to the received stimuli in the perception process is called as

a) Selecting
b) Directing
c) Interpreting
b) Organizing

7) _______ is science that seeks to measure, explain, and sometimes change the behaviour of human.

a) Anthropology
b) Sociology
c) Social Psychology
d) Psychology

8) _______is the study of societies to learn about human beings and their activities.

a) Social psychology 
b) Anthropology 
d) Sociology
a) Psychology

9) ________ can be defined as the process by which individuals organize and interpret their sensory impressions in order to give meaning to their environments

a) Learning
b) Motivation
c) Perception
d) Systematization

10) The perception when influenced by the group to which the stimuli belong, is called as ________

a) Attrition
b) Projection
c) Halo Effect
d) Stereo-type

11) ________ is a field of study that investigates the impact that individuals, groups and structure have on behavior within organizations for the purpose of applying such knowledge towards improving an organization's effectiveness.

a) Management
b) Organization Behavior
c) Science
d) Mathematics

12) _________ is the science or study of behavior, and includes animal as well as Human behavior

a) Sociology
b) Social Psychology 
c) Political Science
d) Psychology

13) ________ address Wit self to the study of group behavior.

a) Sociology
b) Social Psychology 
c) Psychology
d) Political Science

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Thursday, July 8, 2021

International Finance MCQS With Solutions

July 08, 2021 0
International Finance MCQS With Solutions


1. Global bond market consists of all bonds sold by issued companies, governments, or other firms

A. within their own countries
B. outside their own countries
C. to London banks
D. to developing nations only

2. more instability in currency is called as

A. country risk
B. financial risk
C. currency risk
D. liquidity risk

3. Foreign bonds issued in Japan are known

A. bulldog bonds
B. dragon bonds
C. Yankee bonds
D. samurai bonds

4. Largest number of buyers and sellers, greater the

A. liquidity
B. speculation
C. hedging
D. forward rate

5. Exchange rate entail delivery of trade currency within two business days know as

A. forward rate
B. future rate
C. spot rate
D. bid rate

6. Differences in nominal interest rates are removed in exchange rate is

A. fisher effect
B. Leontief paradox
C. Combined equilibrium theory
D. purchasing power parity

7. Simplicity with which bondholders and shareholders can change their investments into cash is known

A. barter
B. hedging
C. arbitrage
D. liquidity

8. Eurobonds are admired because

A. they are less risky than traditional bonds
B. European companies are considered very stable
C. of absence of government regulation
D. they are always denominated in euro

9. Bid quote is for

A. seller
B. buyer
C. hedger
D. speculator

10. Bid-ask spread in foreign exchange market is the

A. price of currency in foreign exchange market
B. difference between bid and ask quotes for a currency
C. price at which a bank will buy a currency
D. price a bank will pay for a currency

11. Not aim of international capital market is

A. preserving hard currencies to finance trade deficits
B. reducing cost of money to borrowers
C. reducing investor risk
D. expanding money supply for borrowers

12. which of following causes do investors employ foreign exchange market

A. currency hedging
B. currency speculation
C. currency conversion
D. all of above

13. in 1944 international accord is recognized as

A. Breton Wood Agreement
B. Exchange Agreement
C. International Trade
D. Fisher Effect

14. If a company agreements today for several future date of real currency exchange, they will be building use of a

A. stock rate
B. stock rate
C. futures rate
D. forward rate

15. International Money Market is for about

A. 2 years
B. 3 years
C. 5 years
D. 1 years

16. Case of foreign exchange

A. Exchange of claims denominated in another currency
B. exchange of bank deposits
C. Exchange of cash issued by a foreign central bank
D. All of above

17. Gold standard introduced in

A. 1913
B. 1990
C. 1876
D. 1944

18. Market in which currencies buy and sell and their prices settle on is called the

A. Eurocurrency market
B. international capital market
C. international bond market
D. foreign exchange market

19. International capital market

A. innovative financial instruments
B. information technology
C. deregulation
D. foreign exchange rates

20. Order cost is cost of the

A. executing order
B. processing order
C. opportunity cost
D. none of these

21. International capital market

A. limits available set of lending opportunities
B. increases overall portfolio risk for investors
C. allows investors to reduce risk by holding international securities whose price move independently
D. is easily accessible to everyone

22. Ask quote is for

A. seller
B. buyer
C. hedger
D. speculator

23. A firm that purpose to connect sellers and buyers of foreign currency denominated bank deposits is entitled

A. a wholesaler
B. a broker
C. a bank
D. an investor

24. A simultaneous purchase and sale of foreign exchange for two different dates

A. currency devalue
B. currency swap
C. currency valuation
D. currency exchange

25. If your local currency is in variable form and foreign currency is in fixed form quotation will be:

A. indirect
B. direct
C. local form
D. foreign form

26. In a quote exchange rate, currency that is to be purchase with another currency is called:

A. liquid currency
B. foreign currency
C. local currency
D. base currency

27. Holding an inventory have

A. buying cost
B. selling cost
C. opportunity cost
D. exchange rate risk

28. Today, important factor that result in augmentation in international bond market is

A. low interest rates
B. high interest rates
C. moderate interest rates
D. all of above

29. World

A. interbank market
B. Eurocurrency market
C. securities exchanges
D. over-the-counter market

30. Governments enforce currency limitations to

A. protect a currency from speculators
B. keep resident individuals and businesses from investing in other nations
C. preserve hard currencies to finance trade deficits or repay debts
D. all of above

31. In primary markets, the first time issued shares to be publicly traded, in stock markets is considered as

A. traded offering
B. public markets
C. issuance offering
D. initial public offering

32. The exchange markets and over the counter markets are considered as two types of

A. floating market
B. risky market
C. secondary market
D. primary market

33. The current market price of common stock is $15 and the conversion rate received on conversion is $320 to calculate

A. $3,800
B. $2,800
C. $4,800
D. $5,800

34. The transaction cost of trading of financial instruments in centralized market is classified as

A. flexible costs
B. low transaction costs
C. high transaction costs
D. constant costs

35. The bonds that are backed by cash flow from project and are sold to finance particular project are classified as

A. finance bonds
B. revenue bonds
C. financing bonds
D. project bonds

36. The equation that shows the relationship between expected inflation, real interest rates, and nominal interest rates is called the

A. interest rate parity equation
B. Fisher equation
C. GDP deflator
D. net inflation index

37. Which of the following is not an example of a frequently used Euro-instrument? 

A. Eurobond 
B. Euro note 
C. Euro stock 
D. Euro commercial paper

38. When was IMF established?

A. Dec. 27, 1945
B. Jan. 30, 1947
C. Jan.1, 1946
D. Sept. 24, 1947

39. Which of the following is NOT a restriction to international trade?

A. Exchange Controls 
C. Subsidies
D. Quotas

40. Balance of payments of a country includes:

A. Balance of trade
B. Capital receipts and payments
C. Saving and investment account
D. Both (a) and (b)

41. It helps countries to meet deficit in balance of payments:

C. World Bank

42. Export of goods is called trade in:

A. Visible goods
B. Invisible goods
C. Basic goods
D. Non-real goods

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