2nd Year Principles of Banking Chapter 12 TestForeign Exchange Transaction

Q1. Multiple choice questions (Attempt all · 10 × 1 = 10)

1. What is objective of foreign exchange control?

   1. To stabilize exchange rate

   2. To increase government revenue

   3. Favourable balance of payment

   4. All the above

2. The duty of exchange control in Pakistan has been assigned to:

   1. National Bank of Pakistan

   2. State Bank of Pakistan

   3. Ministry of Finance

   4. Exchange Bank

3. Foreign exchange control reduces the:

   1. Circulation of capital

   2. Export of capital

   3. Import of capital

   4. None of these

4. Under non-convertible paper currency system exchange rate is determined where purchasing power of currencies:

   1. Same

   2. Different

   3. Zero

   4. Maximum

5. Which method is mostly used in making foreign payment:

   1. Foreign bills of exchange

   2. By post

   3. By telegraph

   4. None of these

6. The banks which provide foreign exchange:

   1. Exchange bank

   2. IDBP

   3. ADBP

   4. None

7. Which of he following changes cause to change in foreign exchange rate:

   1. Change in exports and imports

   2. Change in capital flow

   3. Change in bank rate

   4. All the above

8. The term foreign exchange includes:

   1. Bank draft

   2. Letter of credit

   3. Foreign B/E

   4. All the above

9. Foreign exchange control methods are:

   1. Short term

   2. Medium term

   3. Long term

   4. Direct and Indirect

10. The value of currency in foreign is known as:

    1. Exchange rate

    2. Foreign currency

    3. Interest

    4. All these