1. Your company wants to avail foreign currency loan of USD 5mn with ICICI Bank, Mumbai. This transaction will be treated as ______________ (current account/capital account) transaction.

2. Your company has employed foreign nationals. Will the remuneration to them be treated as a current/capital account transaction?

3. When a country A’s currency appreciates, the country A’s goods abroad become ______ and import of foreign goods in that country A become _______.

a. more expensive; cheaper

b. cheaper; more expensive

c. taller; shorter

d. shorter; taller

4. If interest rates are higher in France than in the United States, the market expects that the Euro will:

a. appreciate against the dollar.

b. depreciate against the dollar.

5. If the forward exchange rate is greater than the spot rate, the base currency is selling at ______________ a. Premium b. Discount