Chapter Exam

Chapter 20: International Finance — Online MCQ Test

Q: What does the abbreviation GDR stand for in international finance?

Answer: A. Global Depositary Receipt — GDR stands for Global Depositary Receipt, a financial instrument used by companies to raise capital in international markets.

Q: Which type of investor invests in the stocks or bonds of a company located in a foreign country?

Answer: B. Foreign Institutional Investor — Foreign Institutional Investors (FIIs) are entities established outside a country that invest in the financial markets of that country.

Q: Which of the following is a feature of Foreign Currency Convertible Bonds (FCCBs)?

Answer: B. They are issued in foreign currency — FCCBs are equity-linked debt securities issued by a company in a foreign currency, which are convertible into shares of the issuing company.

Q: An investor wants to invest in a company's shares but wants a debt instrument that can be converted to equity if the company performs well. What should they choose?

Answer: B. Foreign Currency Convertible Bonds — FCCBs offer the safety of a bond and the potential upside of an equity share upon conversion.

COMMERCE · CLASS 11th · Tamil Nadu State Board

Practice Chapter 20: International Finance with a free chapter-wise online MCQ test for Tamil Nadu State Board CLASS 11th COMMERCE. This chapter covers: Exploring international capital markets this chapter covers foreign direct investment and foreign institutional investors. Students examine depositary instruments like GDRs ADRs an.... AI-generated questions from basic to board-exam level, with instant results and explanations.

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Chapter 20: International Finance — Important Questions & Answers (FAQ)

Frequently asked questions from Tamil Nadu State Board CLASS 11th COMMERCE — Chapter 20: International Finance, with answers and explanations. These are sample questions; the exam has its own separate question set.

What does the abbreviation GDR stand for in international finance?

A. Global Depositary Receipt ✓
B. General Debt Reserve
C. Gross Domestic Revenue
D. Global Development Rate

Answer: A. Global Depositary Receipt
GDR stands for Global Depositary Receipt, a financial instrument used by companies to raise capital in international markets.

Which type of investor invests in the stocks or bonds of a company located in a foreign country?

A. Domestic Trader
B. Foreign Institutional Investor ✓
C. Local Retailer
D. Sole Proprietor

Answer: B. Foreign Institutional Investor
Foreign Institutional Investors (FIIs) are entities established outside a country that invest in the financial markets of that country.

Which of the following is a feature of Foreign Currency Convertible Bonds (FCCBs)?

A. They cannot be converted into equity
B. They are issued in foreign currency ✓
C. They are debt-free instruments
D. They are restricted only to domestic investors

Answer: B. They are issued in foreign currency
FCCBs are equity-linked debt securities issued by a company in a foreign currency, which are convertible into shares of the issuing company.

Compare GDR and ADR. Which statement is true?

A. ADR is global, GDR is American
B. GDR is usually listed on the London or Luxembourg exchanges, ADR on US exchanges ✓
C. Both are issued by domestic banks only
D. ADR cannot be converted to cash

Answer: B. GDR is usually listed on the London or Luxembourg exchanges, ADR on US exchanges
ADRs are specific to the US market, while GDRs are global instruments typically listed in European financial centers.

An investor wants to invest in a company's shares but wants a debt instrument that can be converted to equity if the company performs well. What should they choose?