International Finance
Exam Materials
Course Introduction
International Finance explores the financial interactions between countries, examining the workings of international monetary systems, foreign exchange markets, and global capital flows. The course covers key topics such as exchange rate determination, management of currency risk, international investment strategies, and the impact of economic policies and institutions on international trade and finance. Students will analyze case studies to understand issues like balance of payments, global financial crises, and the roles of multinational corporations and international financial organizations. Through theoretical frameworks and practical applications, the course equips students with the knowledge and skills necessary to navigate and manage financial challenges in a global context.
Recommended Textbook
Global Business Today 4th Edition by
Charles W. L. Hill
Available Study Resources on Quizplus 16 Chapters
2040 Verified Questions
2040 Flashcards
Source URL: https://quizplus.com/study-set/2805
Page 2
Chapter 1: Globalization
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126 Verified Questions
126 Flashcards
Source URL: https://quizplus.com/quiz/55860
Sample Questions
Q1) Although this organization is perhaps best known for its peacekeeping role,one of its central mandates is the promotion of higher standards of living,full employment,and conditions of economic and social progress and development.What is it called?
A) World Bank
B) GATT
C) United Nations
D) Canada's Export Development Corporation
E) Bank of Canada
Answer: C
Q2) If we look into the future,most forecasts now predict a __________ in world output accounted for by developing nations such as China,India,Indonesia,and South Korea,and a __________ in the share enjoyed by rich industrialized countries such as Britain,Japan,and the United States.
A) rapid rise; rapid decline
B) slight rise; slight decline
C) rapid decline; rapid rise
D) rapid rise; slight decline
E) stay the same; slight decline
Answer: A
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Chapter 2: Country Differences in Political Economy
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144 Verified Questions
144 Flashcards
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Sample Questions
Q1) What are advantages that accrue to early entrants into a business market referred to as?
A) standard-class advantages
B) first-mover advantages
C) prime-mover advantages
D) first-stage advantages
E) early adopter advantages
Answer: B
Q2) Public action of property rights refers to theft,piracy,and blackmail.
A)True
B)False
Answer: False
Q3) What country is the last major Communist power left?
A) Russia
B) China
C) Vietnam
D) North Korea
E) Cuba
Answer: B
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Page 4
Chapter 3: The Cultural Environment
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138 Verified Questions
138 Flashcards
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Sample Questions
Q1) A system of values and norms that are shared among a group of people and that when taken together constitute a design for living is referred to as culture.
A)True
B)False
Answer: True
Q2) All societies are stratified on a hierarchical basis into social categories,or:
A) social strata
B) norm based strata
C) social segments
D) norm based associations
E) class based hierarchies
Answer: A
Q3) A __________ is a group of people who share a common set of values and norms.
A) cohort
B) society
C) fellowship
D) fraternity
E) community
Answer: B
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Page 5
Chapter 4: Ethics in International Business
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127 Verified Questions
127 Flashcards
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Sample Questions
Q1) Cultural relativism is typically associated with managers from developed nations.
A)True
B)False
Q2) The concept of _________ refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions.
A) corruption
B) human rights
C) just distribution
D) social responsibility
E) environmental responsibility
Q3) Which one is guaranteed by Rawls' conceptual device known as the veil of ignorance?
A) impartiality
B) political liberty
C) equity
D) freedom of assembly
E) justice
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Page 6
Chapter 5: International Trade Theories
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122 Verified Questions
122 Flashcards
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Sample Questions
Q1) While diamonds are mined all over the world,including in Canada,the diamond trade is centred on Antwerp Belgium in an area known as the Diamond Quarter,or the Square Mile.Diamonds are cut and polished in lower wage countries such as India (which accounts for about 90% of all diamond cutting and polishing)but they are traded in Antwerp.There are almost 4,000 dealers,brokers and financial intuitions serving this industry,all located in an area of only several blocks.Antwerp has been the centre of the diamond industry for several centuries since Lodewyk van Berken,a Flemish jeweler invented a device for polishing diamonds around the year 1450. Michael Porter considered four factors of production in developing his theory of international trade.These four factors help determine the difference in production between different countries.Describe and explain the four factors.Explain which factor would be more important in this scenario.
Q2) The theory of absolute advantage suggests that trade is a positive-sum game in which all can gain to an even greater degree than the theory of comparative advantage.
A)True
B)False
Q3) When does free trade occur?
Q4) Describe Adam Smith's concept of absolute advantage.
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Chapter 6: The Political Economy of International Trade
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128 Verified Questions
128 Flashcards
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Sample Questions
Q1) An example of a(n)_______ that limits imports is if a country restricted the import of a particular good to a remote seaport that made it extremely difficult for any other country to import the good profitably.
A) ad valorem trade policy
B) administrative trade policy
C) situational trade policy
D) directional trade policy
E) anti-dumping policy
Q2) Against the background of rising pressures for protectionism,in 1986 the members of the GATT embarked on their eighth round of negotiations to reduce tariffs,the Brussels Round.
A)True
B)False
Q3) What economic sector did the WTO tackle first?
A) financial services
B) agriculture
C) telecommunications
D) manufacturing
E) retail
Q4) What was on the agenda for the Doha round of talks? Has it been successful?
Page 8
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Chapter 7: Foreign Direct Investment
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120 Verified Questions
120 Flashcards
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Sample Questions
Q1) The flow of foreign direct investment into a country is referred to as the
A) inflow of FDI.
B) FDI capture.
C) FDI gain.
D) accrual of FDI.
E) FDI wealth accrual.
Q2) There has been a rapid decrease in the total volume of FDI over the past 35 years.
A)True
B)False
Q3) FDI is often undertaken as a response to:
A) exporting
B) FDI outflows
C) FDI inflows
D) threatened import tariffs
E) high GDP levels
Q4) Historically,there have been high levels of FDI outflows from the United States.
A)True
B)False
Q5) How do transportation costs affect the attractiveness of exporting?
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Chapter 8: Regional Economic Integration
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129 Verified Questions
129 Flashcards
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Sample Questions
Q1) A customs union eliminates trade barriers between member countries and adopts a common external trade policy.
A)True
B)False
Q2) The Andean Pact was formed in 1969 when Bolivia,Chile,Ecuador,Colombia,and Peru signed the Cartagena Agreement.
A)True
B)False
Q3) ______________ occurs when high-cost domestic producers are replaced by low-cost producers within the free trade area.
A) Trade alteration
B) Trade qualification
C) Trade diversion
D) Trade creation
E) Trade diversification
Q4) Throughout the more recent years,the European Commission's role in competition policy has become less important.
A)True
B)False
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Chapter 9: The Foreign Exchange Market
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137 Verified Questions
137 Flashcards
Source URL: https://quizplus.com/quiz/55845
Sample Questions
Q1) Explain how the psychology of investors and bandwagon effects can have an impact on the movement in exchange rates.Do you believe that bandwagon effects really happen?
Q2) Technical analysis draws on economic theory to construct sophisticated econometric models for predicting exchange rate movements.
A)True
B)False
Q3) It is necessary to use a ______________ exchange rate to execute a transaction immediately.
A) real time
B) spot
C) statutory
D) sanctioned
E) bank determined
Q4) What are the functions of the foreign exchange market? Would international commerce be possible without its existence?
Q5) Why do companies prefer not to use countertrade if it can be avoided?
Q6) What is the International Fisher Effect? (note: you do not need to provide the mathematical formula provided in the book)
Page 11
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Chapter 10: The Global Monetary System
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128 Verified Questions
128 Flashcards
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Sample Questions
Q1) The gold standard worked reasonably well until when?
A) the 1870s
B) the 1890s
C) World War I
D) World War II
E) 1973
Q2) ______ can lead to inflation,which puts downward pressure on fixed exchange rates.
A) Monetary restrictions
B) Monetary standard
C) Sporadic trade balance adjustments
D) Monetary policy control
E) Monetary expansion
Q3) Under the Bretton Woods system,which currency served as the base currency?
A) Japanese yen
B) British pound
C) French franc
D) U.S. dollar
E) Swiss Franc
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Page 12
Chapter 11: Global Strategy
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132 Verified Questions
132 Flashcards
Source URL: https://quizplus.com/quiz/55858
Sample Questions
Q1) Pressures for cost reductions can be particularly intense in industries producing commodity products where meaningful differentiation on non-price factors is difficult and ____________ is the main competitive weapon.
A) quality
B) distribution efficiency
C) sales and service
D) price
E) product attributes
Q2) _________________ the skills created within subsidiaries and applying them to other operations within the firm's global network creates value.
A) Eliminating
B) Leveraging
C) Reducing
D) Cross-licensing
E) Expanding
Q3) What is the experience curve? How can an involvement in overseas markets help a firm capture experience curve advantages more rapidly?
Q4) What is the difference between learning effects and economies of scale?
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Page 13
Chapter 12: Entering Foreign Markets
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119 Verified Questions
119 Flashcards
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Sample Questions
Q1) In a _____________,the firm owns 100 percent of the stock.
A) joint venture
B) turnkey operation
C) wholly owned subsidiary
D) strategic alliance
E) acquisition
Q2) The contractor agrees to handle every detail of the project for a foreign client,including the training of operating personnel in a(n)_____________ project.
A) beginning to end
B) A to Z
C) front-to-back
D) turnkey
E) business completion
Q3) Turnkey projects are a means of exporting ____________ to other countries.
A) commodities
B) the manufacturing of goods
C) process technology
D) the provision of services
E) the production of automobiles
Q4) What are pioneering costs? When do these costs arise?
Page 14
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Chapter 13: Exporting,Importing,and Countertrade
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) Which of these is payable on presentation to the drawee?
A) bill of lading
B) sight draft
C) L/C
D) time draft
E) banker's draft
Q2) A ____________'s principle is to trade goods and services when they cannot be traded for money.
A) letter of credit
B) draft
C) bill of exchange
D) countertrade
E) switch trading
Q3) Time drafts:
A) have no value given the deferred nature of document
B) are generally not preferable in international transaction
C) are negotiable instruments
D) are also called bill of ladings
E) are replaced by sight drafts after all conditions are met
Q4) What is the difference between a sight draft and a time draft?
Page 15
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Chapter 14: Global Marketing and Randd
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135 Verified Questions
135 Flashcards
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Sample Questions
Q1) What can the differences in technical standards constrain?
A) The segmentation of markets
B) The localization of markets
C) The development of markets
D) The globalization of standards
E) The globalization of markets
Q2) Two conditions are necessary for profitable price discrimination.These are
A) the firm must sell a standardized product; and the firm must be able to keep its national markets separate.
B) the firm must be able to keep its national markets separate; and the existence of different price elasticities of demand in different countries must exist.
C) the firm must rely upon substantial economies of scale; and the firm cannot be a member of a major trade block.
D) the firm must sell highly differentiated products; and the existence of different prices elasticities of demand in different countries must exist.
E) there must be no tariff differences between the countries and there must be a fragmented retail system.
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16
Chapter 15: Global Manufacturing and Materials Management
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114 Verified Questions
114 Flashcards
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Sample Questions
Q1) The benefits of manufacturing components in-house seem to be greatest when highly specialized assets are involved,when vertical integration is necessary for protecting proprietary technology,or when the firm is simply more efficient than external suppliers at performing a particular activity.
A)True
B)False
Q2) In the context of materials management,the acronym JIT stands for:
A) Jobber-In-Training
B) Job-In-Transit
C) Joint-In-Transpiration
D) Just-In-Time
E) Join-Integrate-Transfer
Q3) ____________ argued that management should embrace the philosophy that mistakes,defects,and poor-quality materials are not acceptable and should be eliminated.
A) Deming
B) Juran
C) Vernon
D) Krugman
E) Porter
Page 17
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Chapter 16: Global Human Resource Management
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131 Verified Questions
131 Flashcards
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Sample Questions
Q1) One task of the _____________ function is to foster harmony and minimize conflict between the firm and organized labour.
A) marketing
B) exporting
C) human resource management
D) production
E) host country management
Q2) A(n)____________ is extra pay the expatriate receives for working outside his or her country of origin.
A) parity adjustment
B) expatriate special circumstance
C) foreign service premium
D) allowance
E) foreign service allowance
Q3) According to the textbook,almost all expatriates believe that a position in a foreign country is beneficial to the careers of almost all expatriates,because their knowledge is highly valued by their company when they get home.
A)True
B)False
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Page 18