Realisation & Repatriation of Forex
Foreign Exchange Management Act, 1999 provides the regulatory framework for the transactions related to foreign exchange. Foreign Exchange Management (Realization, Repatriation and Surrender of Foreign Exchange) Regulations, 2000 govern the transactions of realization and repatriation of foreign exchange. Amendments are issued by RBI from time to time in order to mitigate the need of the hour. [Foreign Exchange Management (Realization, Repatriation and Surrender of Foreign Exchange) Regulations, (Amendment) 2007]
Since Forex market is a vast market and is endowed with high level of efficiency, the level of risk involved is also very high. To cope with the various aspects of Forex RBI issues circulars for the benefits of the investors. It has covered each and every aspects of a forex transaction.
Repatriation is the process of converting a foreign currency into the currency of one’s own country. The amount that the investor will receive depends on the exchange rate between the two currencies being traded at the settlement time.
Here we present you a quiz on the realization and repatriation of foreign exchange to test yourself.
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Question 1 of 10
1. Question1 points
Fluctutating working capital is forCorrect
This capital is needed to meet the seasonal requirements of the business. It is used to raise the volume of production by improvement or extension of machinery.Incorrect
Question 2 of 10
2. Question1 points
Which of the following types of working capital is for meeting the contingencies of the businessCorrect
Reserve Marging Working Capital represents the amount utilized at the time of contingencies. These unpleasant events may occur at any time in the running life of the business such as inflation, depression, slump, flood, fire, earthquakes, strike, lay off and unavoidable competition etc.Incorrect
Question 3 of 10
3. Question1 points
Gross working capital isCorrect
Gross working capital refers to the firmâ€™s investment in current assets. Current assets are those assets which can be converted in to cash with in an accounting year and includes cash short term securities, debtors bills receivable and stock. Net working capital refers to the difference between current asset and Current liabilities.Incorrect
Question 4 of 10
4. Question1 points
Which of the following are among the determinants of the working capitalCorrect
There are various factors tthat affect the working capital requirement of the business, some of them are, Nature of business, degree of seasonality, Production policies, Growth stage of business, Dividend Policy, collection period, Payment period etcIncorrect
Question 5 of 10
5. Question1 points
Can the working capital of a business be negativeCorrect
negative working capital is a sign that the company may be facing bankruptcy or a serious financial trouble. negative working capital can also be a sign of managerial efficiency in a business with
low inventory and accounts receivable.Incorrect
Question 6 of 10
6. Question1 points
Operating cycle isCorrect
The operating cycle is the length of time between the companyâ€™s outlay on raw materials, wages and other expenditures and the inflow of cash from the sale of the goods. In a manufacturing business, operating cycle is the average time that raw material remains in stock less the period of credit taken from suppliers, plus the time taken for producing the goods, plus the time the goods remain in finished inventory, plus the time taken by customers to pay for the goods.Incorrect
Question 7 of 10
7. Question1 points
Which of the following is not a source of financing permanent working capitalCorrect
Trade creditors are source of financing variable working capitalIncorrect
Question 8 of 10
8. Question1 points
An aggressive current Asset Financing Policy reliesCorrect
It relies heavily on short term bank finance and seeks to reduce dependence on long term financing. It exposes the firm to a higher degree of risk, but reduces the average cost of financing thereby resulting in higher profits.Incorrect
Question 9 of 10
9. Question1 points
Return on Investment is the product of two factors namelyCorrect
ROI is product of two factorsâ€“ assets turnover and profits margin. If either of these ratios can be increased, ROI will be increased to a great degree.Incorrect
Question 10 of 10
10. Question1 points
Which of the following is a motive of holding cashCorrect
At the basic level, a firm like individuals, has three motives for holding cash, as stated aboveIncorrect