Deck 1: Insurance Types and Terms

Question 1

Coverage of risks due to fluctuating exchange rates is known as ---------

A)Speculation
B)Arbitrage
C)Hedging
D)Forward rate

Answer 1

Hedging

Question 2

The demand for foreign exchange is determined by country's ------------

A)Exports
B)Imports
C)Exports and imports
D)None of these

Answer 2

Imports

Question 3

Purchasing power purity theory was introduced by ------------

A)Fisher
B)Cassel
C)Marshall
D)Paul Einzing

Answer 3

Cassel

Question 4

EURO is the currency of ----------------

A)European Union
B)Europe
C)Britain
D)None of these

Question 5

The currency of Italy is ----------------

A)Euro
B)Dollars
C)Yen
D)Pound

Question 6

The rate at which the exchange dealer is ready to buy a currency as known as ----------------

A)Ask rate
B)SWAP rate
C)Spread
D)Bid rate

Question 7

The members of the IMF are the members of --------------

A)IFC
B)IDA
C)ADB
D)IBRD

Question 8

World Bank is also known as --------------------

A)IBRD
B)IFC
C)IDA
D)MIGA

Question 9

Balance of Trade is a ----

A)Stock Concept
B)Flow Concept
C)Stock and Flow Concept
D)None of these

Question 10

Which one of the following items in the balance of payments is invisible

A)Travel
B)Shipping
C)Export of goods
D)Gifts

Question 11

Gold standard is an example of

A)Floating exchange rate
B)Fixed exchange rate
C)Crawling peg
D)Crawling bands

Question 12

Flexible exchange rate is based on the concept of

A)Supply
B)Demand
C)Demand and supply
D)None of these

Question 13

A BOP surplus can be corrected through --------------

A)Export promotion
B)Exchange control
C)Appreciation
D)Increase in interest

Question 14

BOP deficit can be corrected through --------------

A)Increasing imports
B)Increasing exports
C)Increase in interest rates
D)None of these

Question 15

Foreign exchange is demanded by -------------

A)Exporters
B)Domestic travelers
C)Importers
D)None of these

Question 16

Devaluation will improve when elasticity of demand of country's export and import is

A)Less than one
B)Equal to one
C)Infinity
D)Greater than one

Question 17

Deficit BOP can be solved by --------------------

A)Expenditure switching policies
B)Expenditure reducing policies
C)Both a and b
D)None of these

Question 18

Floating exchange rate become common in ----------------

A)1980's
B)1970's
C)1960's
D)1950's

Question 19

The difference between the value of goods and services exported and imported is called -------------

A)BOP
B)BOT
C)Balance on Capital Account
D)Balance of Current Account

Question 20

The convertibility of dollar was formally abandoned in ---------------

A)1962
B)1966
C)1973
D)1971

Question 21

Soft loans to underdeveloped countries are disbursed by -----------

A)IDA
B)IBRD
C)GATT
D)ADB

Question 22

IFC was established in ----------------

A)1958
B)1956
C)1954
D)1950