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The balance of payment does not include
transactions in real assets
transactions in financial claims
transactions between two non residents
transactions in gold

For devaluation of currency to be effective to correct balance of payment deficit
demand for export shoild be price elastic
demand for imports should be price elastic
demand for export and import should be price elastic
demand for export should be price elastic and that for import should be price inelastic

Exchange control as a method of correcting balance of payment disequilibrium does not include
exchange restriction
exchange reserve
exchange intervention
exchange clearing arrangement

Incoterms cover
trade in intangibles
ownership and transfer rights
Contracts of carriage
Rights and obligation of parties to contracts of sale

The importer under FOB terms request the exporter to book shipping space on vessal convenient to the exporter. The exporter
is bound to book the shipping space as it is his duty under FOB terms
should refuse the request as it is the duty of the importer to book the shipping space
may accept the request, but cannot recover the additional cost from the importer
may accept and execute the request at the cost of the importer

The incoterm providing least responsibility to seller is

Adoption of incoterm is
compulsory for all international contracts
compulsory for all letter of credit transactions
optional for the parties to the contracts
none of the above

The seller and buyer want that the delivery of goods should be completed on the board of the ship. They should have a contract with_________them
Free on Rail (FOR)
Free alongside the ship (FAS)
none of the above

letter of credit for a commercial transaction is
a guarantee by the issuing bank to the exporter that bills drawn by the latter will be met
undertaking by the issuing bank to the exporter’s bank that the exporter’s bills will be met by the issuing bank
undertaking by the issuing bank to the exporter that the documents conforming to the requirement to the credit will be negotiated by the bank
none of the above

A letter of credit is opened on behalf of
exporter customer
importer customer
any party wishing to make payment abroad
none of the above

When a letter of credit does not indicate whether it is revocable or irrevocable, it is treatd as
revocable or irrevocable at the option of the beneficiary
revocable or irrevocable at the option of the negotiating bank

A transferable credit can be transferred

A letter of credit that provides for granting of pre shipment finance as well as storage of goods in the name of the bank is
a red clause letter of credit
a stand by letter of credit
a green clause letter of credit
a secured letter of credit

A letter of credit carries an undertaking of the opening bank to pay up to a specified amount in case of non performance of certain obligation by the applicant. This letter of credit is
an anticipatory letter of credit
standby letter of credit
performance letter of credit

What period is available to a negotiating/nominated bank to examin the documents before negotiation under a L/C as per UCPDC-600
5 business days
5 banking days
5 working days
7 business days

ABC Bank receives a bill under letter of credit opened by it. The importer instructs the bank not to pay because, the good received are defective. The bank should
return the bill with the reason “payment refused”
seek clarification from the drawer, meanwhile keep the bill with it
refer the matter to International Chamber of Commerce
make payment to the negotiating bank since the importer’s reason is untenable

A letter of credit is opened for 100 Kg. of coffee for GBP 800. Documents for 102 Kg. of coffee for GBP 800 is presented for negotiation
the bill cannot be accepted because the quantity exceeds the letter of credit limit
the bill can be accepted as the quantity exceeded is within 10% tolerance limit
the bill can be accepted as it is beneficial to the importer
the bill can be accepted as quantity exceeds is within 5% tolerance limit

Under UCP, the bank involved in a letter of credit transaction are responsible for
genuineness of documents submitted by the beneficiary
non fulfillment of obligations by other banks
delay in transmission of message
none of the above

The documents submitted include two sets of bill of lading date 10th May 15 and 15th May 15 showing shipment by SS Jal Vidya, port of loading being Mumbai and Kochi and port of destination Colombo. The Srilankan bank refuses to reimburse your bank stating that documents indicate partial shipment while LC prohibits partial shipment
reimbursement refuses as it is partial shipment
reimbursement can not be refused as two sets of bill of lading are for the same voyage and same vessel
none of the above

A L/C stipulated last date for shipment and last date for presentation of documents as 31/8/15 and 15/9/15 respectively. The set of documents received by the LC opening bank indicated that the documents were negotiated on 10/9/15 and included bill of lading dated 2/7/15 covering shipment from Bangkok to Mumbai. Whether the presentation is LC compliant
Presentation is not LC compliant as documents were not presented within 21 days
Presentation is LC compliant as the documents were presented within presentation date of documents
If LC itself permits presentation beyond 21 days, then of course the documents are acceptable
all above are correct

As per UCP, the minimum amount for which marine insurance should be effected is
FOB value
CIF value
FOB value + 10%
CIF value + 10%

Marine policy clause that currently gives widest coverage against risk is
Institute cargo clause A
Institute cargo clause B
Institute cargo clause C
All risks clause

Currency in which the insurance policy is obtained should be the currency oF
the importer’s country
the exporter’s country
the letter of credit currency
any currency which is easily exchangeable

As per UCP unless specifically authorized in the letter of credit, a bank will not accep
through bill of lading
short form bill of lading
bill of lading indicating that the goods will be transshipped en route
charter party bill of lading

The following is must for an exporter
IEC number
Exporter’s code number allotted by RBI
a minimum local turn over of Rs. 50 lac
an export licence

Buyer’s credit takes the form of
exporter’s bank financing the buyer directly
exporter’s bank financing the buyer’s bank
both (a) and (b) above
neither (a) nor (b) above

For export oriented units, EXIM bank finances
term loans only
both working capital and term loans
term loans, working capital as well as long term working capital
only for investment from overseas

EXIM bank lending to foreign government take the form of
soft loans
commercial loans
lines of credit
re-lending facility

The facility that is available to commercial banks in India from EXIM bank is
refinance of export credit
export bills rediscounting
syndication of export credit risks
all the above

Export factoring is available for
short term exports
mediam term exports
all exports
exports under consignment basis

Forfaiting refers to
discounting of any export bill
discounting of medium term export bill
writing of unrealized export bill
waiver of charges on export bill

Exim bank issues guarantee to commercial banks for
all export advances
all export advances repayable beyond one year
post shipment supplier’s credit from one year to three year
loans against which refinance with Exim bank was availed by banks

ECGC policies do not cover risk against
buyer’s protracted default to pay for the goods
war in buyer’s country
buyer’s failure to obtain necessary import licence or exchange authorization from authorities in his country
cancellation of export licence

Pre-shipment advances granted in excess of the FOB value of contract in anticipation of duty drawback, can be covered under
packing credit guarantee
whole turnover packing credit guarantee
export production finance guarantee
export finance guarantee

In the case of exports to countries placed by ECGC in its restricted cover categories
the risk will be covered by ECGC only, if specific application from exporters are approved by them
the ECGC will not cover the export
the risk will be covered on intimation to ECGC
none of the above

When a bank dealer says he has open position in a currency, he means
the bank has no balance in the currency concerned
the bank has made excess purchase of the currency concerned
the bank has either oversold or overbought the currency concerned
the bank offer both to buy or sell the currency concerned

a foreign exchange dealer open position risk refers to
risk of change in exchange rates affected the overbought or oversold position in foreign currency held by the bank
risk of non execution of contract by the counter party
the sum of purchase and sale contracts outstanding
maturity gap between sale and purchase contracts

State which of the following statement is true
risk management helps to eliminate the risk and make business risk free
settlement risk can not be minimized by netting process
movement in exchange rates affect the value of assets and liabilities
Failure of Baring bank was largely attributed to operational risk

The statutory basis for administration of foreign exchange in India is
Foreign exchange regulation act
Conservation of foreign exchange and prevention of smuggling act
Foreign exchange management act
Exchange control manual

Amendment to FEMA regulations are communicated by Reserve bank of India in the form of
AD(MA series) circulars
AD(GP series) circulars
AP(DIR series) circulars
public notice

FEDAI rules do not cover
hours of business of foreign exchange market
interest for late settlement interbank dealing
forward contracts with customers
none of the above

An authorized person under FEMA does not include
an authorized dealer
an authorized money changer
an off-shore banking unit
an exchange broker

R-return statement relates to
outstanding export bills for more than 6 months
fortnightly inflow and outflow of foreign exchange through an AD
outstanding bill of entry for more than 6 months
outstanding assets and liabilities in foreign currency

Drawl of Foreign exchange is not permitted for which of the following countries
Bhutan and Srilanka
Srilanka and Bangladesh
Nepal and Bhutan
Nepal and Srilanka

What is the maximum amount of ECB by a corporate other than hotal, hospital or software sector
USD 1000 Mio
USD 500 Mio
USD 750 Mio
USD 200 Mio

To facilitate urgent credit needs, a standby limit is sanctioned in gold card for exporters, which is ______of______:
25% of projected sales
20% of assessed limit
20% of projected sales
10% of sanctioned limit

Request from gold card holder for sanction of limits is to be disposed off as under (which one is wrong
fresh limit - 30 days
renewal -15 days
adhoc – 7days
none of the above

Under FEMA remittance is permitted for
purchase of lottery ticket
private visits
price money
payment related to “call back services” on telephone

Which of the following risk is not covered by ECGC
insolvency of overseas buyer
war or civil disturbances
exchange fluctuation
failure of exporter to comply with terms of export contract

Political uncertainty in a country leading to falloff govt. is a ______risk for the counter party
political risk
country risk
credit risk
forex risk

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