REPUBLIQUE DU CAMEROUN REPULIC OF CAMEROON

Paix-Travail-Patrie Peace –Work-Fatherland

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MINISTERE DE L’ENSEIGNEMENT SUPERIEUR MINISTRY OF HIGHER EDUCATION
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SOUS DIRECTION DES INSTITUTS PRIVES SUB-DEPARTMENT FOR PRIVATE HIGHER
D’ENSEIGNEMENT SUPERIEUR INSTITUTES
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INSTITUT SUPERIEUR DES AFFAIRES ET BUSINESS AND CAREER HIGHER
CARRIERES DSCHANG INSTITUTE DSCHANG
(ISAC) (BCHI)

Authorization No 24-02609/L/MINESUP/SG/DDES/ESUP/SDA/AEO
DEPARTMENT BUSINESS AND FINANCE
Specialty/Option Banking and Finance (BFI) COURSE TITLE Cross Border Banking
LEVEL One (1) and (2) STATUS COMPULSORY
LECTURER Dr. MOFOW NEVILLE Z

Revision questions academic year 2025/2026.

Instruction to candidates

This paper is made up of two sections, A and B. Section A is made up of MCQs while
section B is structural questions.

Section A: Cross Border Banking MCQ 2.5 marks each

1) Which of the following will cause domestic banks to have a lot of cash deposits coming
from abroad into exporter's accounts?
A. Currency revaluation
B. Currency appreciation
C. Currency devaluation
D. Inelastic demand for imports and exports
2) The Impact on Exports/Imports of a currency depreciation is that
A) Makes exports cheaper and imports more expensive
B) Makes exports more expensive and imports cheaper.
C) Can lead to trade deficits due to reduced export competitiveness.
D) All of the above
3) Currency Depreciation is
(1) An official decrease in the value of a currency within a fixed exchange rate system
(2) A decrease in the value of a currency relative to another currency.
(3) Typically occurs in a floating exchange rate system due to market forces.
(4) Occurs in a fixed exchange rate system, often decided by the government or central
bank.
A (1) and (2) only
B (1), and (4) only
C (2) and (3) only
D All of the above
4) Cameroon's foreign exchange rate system is:
A. Free float
 B. Managed float
C. Fixed exchange rate
D. Free and peg exchange rate.

5) Indirect rate in foreign exchange means?

A. The rate quoted with the unit of home currency kept fixed
B. The rate quoted with unit of foreign currency kept fixed
C. The rate quoted in terms of a third currency
D. None of the above
6) Price in FOREX is called
A. Premium rate
B. Exchange rate
C. Discount rate
D. Exchange rate.
7) In a quote exchange rate, the currency that is used to purchase with another currency is
called
A. liquid currency
B. Foreign currency
C. Base currency
D. local currency
8) If a currency is having more exports than imports in value terms, it can be said that the
country is having
A. Deficit under BOP
B. Deficit under BOT
C. Surplus under BOP
D. Surplus under BOT
9) Given that in a floating exchange system, the exchange rate between CFA and UK pound
is 1.60cfa/£. Then 10m CFA cash flow would be equivalent to ---
A. £6.25m
B. £16m
C. £625m
D. none of the above
10) If the exchange rate moves to 1.50cfa/£. Then CFA has----
A. Appreciated
B. depreciated
C. devaluated
D. Revaluated
11) Cash Market is a market where currencies are bought and sold for immediate delivery.
Another name for a cash market is
A. Immediate market
B. Spot market
C. Exchange market
D. Future market
12) ------------is the price at which one currency can be exchanged for another or the price of
one currency in terms of another.
A. Foreign Exchange
B. Exchange Rate
C. Exchange rate regime
D. Currency market
13) In exchange rate measurement what does “REER” stand for
A. Real Exchange Effective Rate
B. Real and Equivalent Exchange Rate
C. Real Equal Exchange Rate
D. Real Effective Exchange Rate
14) According to theories of exchange rate determination, “PPP” stand for
A) Purchasing Political Power
B) Political Purchasing Power
C) Purchasing Parity Power
D) Purchasing Power Parity
15) One of the reasons that banks go abroad is to maximized value. Which of the following is
not a determinant of value
A. Dividends of shareholders
B. Risk premium
C. Exchange control
D. Growth
16) When a commercial bank decides to make profit in the foreign exchange market due to
disparities in the exchange rate between two markets it is called?
A. Hedging
B. Arbitrage
C. Leverage
D. Speculation
17) Which international payment method is based on an agreement under which the foreign
seller retains ownership of the merchandise until it has been sold, in exchange the
importer is responsible for the management and sales of the merchandise to the end
customer:
A. Open account method
B. Contra reimbursement
C. Consignment
D. Letter of credit
18) By maintaining n foreign currency account is helpful to:
A. Avoid transaction cost
B. Avoid exchange risk
C. Avoid both transaction cost and exchange risk
D. Avoid exchange risk and domestic currency depreciation
19) In the modern foreign exchange market, which group corresponds to the active
participants
A. The central bank, customer and Fintech
 B. Market makers, central bank and customers
C. Commercial banks, brokers, and customers
D. All of the above

20) The acronym SWIFT stands for?

A. Safety with financial transactions
B. Society for worldwide international financial telecommunication
C. Society for worldwide interbank financial telecommunication
D. All of the above
21) Another name for triangular arbitrage is:
A. Direct exchange rate
B. Cross exchange rate
C. Indirect exchange rate
D. Peg exchange rate
22) Taking measures to eliminate or reduce exchange rate risk is called
A) Arbitrage
B) hedging
C) Expertise
D) Currency Swaps
23) ------------- is a financial derivative that give the holder the right, but not the obligation, to
buy or sell currency at a specified price before a certain date.
A) Forward Contract
B) Options Contract
C) Futures Contract
D) Currency Swaps
24) The following are external techniques of exchange rate risk coverage except
A) Forward and Futures Contract
B) Invoicing in Home Currency
C) Options Contracts
D) Currency Swaps

Section B: Structural questions for Cross Border Banking

Question1: define a pegged exchange rate regime and give its advantages and disadvantages (5mks)
Question2: distinguish between Nominal Exchange Rate, Real Exchange Rate, and Real Effective
Exchange Rate: (5mks)
Question 3: what is the difference between Currency Appreciation, Currency Depreciation, Currency
Revaluation, and Currency Devaluation (5mks)
Question 4: What is equilibrium exchange rate? Briefly explain four factors influencing foreign
exchange rate (5mks)
Question5: Briefly explain five importance of the foreign exchange market to CEMAC member state
(5mks) Good luck