Deck 8: Foreign Exchange and Taxation

Question 1

If Quote of Bank ABC is EUR INR 68.00 /30 and Quote of Bank PQR is INR EUR 1.4550/1.4600, arbitrage opportunity will be ___________

A)2828
B)0
C)2882
D)2288

Answer 1

2828

Question 2

Effect of falling domestic exchange rate ___________

A)Reduces Profitability for importers
B)Increases Profitability for importers
C)Exposure
D)Economic

Answer 2

Reduces Profitability for importers

Question 3

___________ refers to the size or scope of potential loss.

A)Risk
B)Uncertainty
C)Exposure
D)Tr

Answer 3

Risk

Question 4

____________ risk is also called as "According Exposure".

A)Transaction
B)Economic
C)Translation
D)Exposure

Question 5

Internal techniques of managing forex risk includes all of the following, except _______________

A)Leading and Lagging
B)Matching
C)Split Currency invoicing
D)Forward and Future contracts

Question 6

When a company has receipts and payments in the same foreign currency due at the same time, it can use ___________technique of managing forex risk.

A)Risk Sharing Agreement
B)Lagging
C)Leading
D)Matching

Question 7

____________ is also known as secrecy jurisdiction.

A)Tax haven
B)Transfer Pricing
C)Foreign affiliate
D)Tax

Question 8

A strategy used to reduce tax liabilities by pricing goods and services within a group structure in way that it does not reflect the arm's length transaction_______________.

A)Thin Capitalization
B)Repatriating Profits
C)Transfer Pricing
D)Tax haven

Question 9

____________ is a Tax avoidance technique whereby multinational subsidiaries are financed primarily by debt from the parent company instead of equity capital.

A)Thin Capitalization
B)Repatriating Profits
C)Transfer Pricing
D)Tax haven