1) What is a key feature of the international stock market?

a. It allows for the trading of stocks of companies from multiple countries

b. It is dominated by currency trading
c. It is only accessible to institutional investors
d. It operates under a single global regulatory framework
2) What is the primary function of the Forex market?
a. Facilitating international trade by allowing currency conversion
b. Providing a platform for stock trading
c. Regulating interest rates worldwide
d. Offering insurance services for international transactions
3) Which of the following is a primary factor influencing exchange rates?
a. Population size
b. Relative interest rates between countries
c. Average age of the population
d. Historical tourism rates
4) What is the primary objective of managing foreign exchange risk?
a. To maximize potential gains from currency movements
b. To minimize potential losses due to currency fluctuations
c. To ensure a fixed profit margin in international trade
d. To speculate on future exchange rate movements
5) Which payment method is commonly used to ensure payment in international trade?
a. Open account
b. Cash on delivery
c. Letter of credit
d. Direct debit
6) Which service is provided by the EXIM Bank of India?
a. Hedging against currency fluctuations
b. Providing long-term finance and export credit
c. Managing domestic monetary policy
d. Enforcing trade regulations

1) The Eurocurrency market is where currencies are deposited outside their home market, usually to benefit
from favorable interest rates.
2) Eurodollars are U.S. dollars deposited in banks outside the United States
3) The international stock market includes exchanges that list securities from companies located in different
countries.
4) Political stability and economic performance are also crucial factors that affect a currency’s exchange rate.
5) To manage foreign exchange risk, companies often use hedging instruments such as forward contracts and
options.
6) Covered interest arbitrage occurs when an investor uses a forward contract to hedge against exchange rate
Risk.
7) International portfolio management involves the diversification of investments across countries.
8) International inventory management involves managing stock levels across multiple countries.
9) The Export – Import Bank of India provides financial assistance to promote international trade
10) EXIM Bank also supports Indian businesses by offering competitive financing solutions.
11) Recent amendments in the EXIM policy aim to facilitate e- commerce trade.
12) International business operations must comply with both local and international regulations.
13) Guidelines for international trade often include requirements for documentation, tariffs, and
customs procedures.

1. Define the foreign exchange market.

The foreign exchange market, also known as the forex, FX, or currency market, is a global and
decentralized market for trading currencies . It operates on several levels and facilitates international trade
and investments by enabling currency conversion.

2. Explain the Euro credit market.

The Eurocredit market is a sector of the global financial market where banks and other financial institutions
provide loans and accept deposits in various currencies, typically in large amounts and for longer terms than
the Eurocurrency market.

3. Define the International stock market.

The international stock market, also known as the global stock market or international equity market, refers
to the worldwide network of stock exchanges, brokers, investment banks, and other financial institutions
that facilitate the buying and selling of stocks, bonds, and other securities across national borders.

4. Define exchange rates.

Exchange rates are defined as the price of one country's currency in relation to another country's currency ¹.
Also known as the value of one country's currency in relation to another currency, exchange rates can be
floating, pegged (fixed), or a Hybrid.

5. What is the concept of international arbitrage?

International arbitrage is a trading strategy that exploits price differences of the same asset in different
markets to earn a risk-free profit.