International Finance
Final Test Solutions
Course Introduction
International Finance explores the theoretical foundations and practical applications of financial management in a global context. The course examines topics such as foreign exchange markets, international monetary systems, balance of payments, international financial instruments, risk management techniques, and cross-border investment and financing decisions. Students will analyze the impacts of currency fluctuations, political risk, and regulatory environments on multinational corporations and financial institutions, developing skills to evaluate and manage financial opportunities and risks in an increasingly interconnected global economy.
Recommended Textbook
International Business The Challenges of Globalization 5th Edition by John J. Wild
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16 Chapters
3050 Verified Questions
3050 Flashcards
Source URL: https://quizplus.com/study-set/2032
Page 2
Chapter 1: Globalization
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213 Verified Questions
213 Flashcards
Source URL: https://quizplus.com/quiz/40384
Sample Questions
Q1) Today, the institution of the General Agreement on Tariffs and Trade (GATT) continues to promote free trade.
A)True
B)False
Answer: False
Q2) A born global firm is a company that adopts a global perspective and engages in international business from or near its inception.
A)True
B)False
Answer: True
Q3) Companies that sell global products can reduce costs by standardizing various aspects of their marketing activities.
A)True
B)False
Answer: True
Q4) A multinational corporation (MNC) is a business that has ________ investments abroad in multiple countries.
Answer: direct
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Page 3
Chapter 2: Cross-Cultrual Busines
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232 Verified Questions
232 Flashcards
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Sample Questions
Q1) The process whereby cultural traits spread from one culture to another is called
Answer: cultural diffusion
Q2) An important aspect of social structure is status, which refers to the way a culture divides its population according to positions within a society's structure.
A)True
B)False
Answer: True
Q3) Understanding religion may help us to understand why cultures differ in their views of work, savings, and material goods.
A)True
B)False
Answer: True
Q4) ________ are positive or negative evaluations, feelings, or tendencies that individuals harbor toward objects or concepts.
Answer: Attitudes
Q5) Two types of customs are ________ and ________ customs. Answer: folk, popular
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Chapter 3: Politics, Law, and Business Ethics
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218 Verified Questions
218 Flashcards
Source URL: https://quizplus.com/quiz/40386
Sample Questions
Q1) A country's political system derives from the history and culture of its people.
A)True
B)False
Answer: True
Q2) No government agency insures internationally active U.S. companies against the effects of political risk.
A)True
B)False
Answer: False
Q3) Asset seizure falls into all of the following categories EXCEPT ________.
A) confiscation
B) localization
C) expropriation
D) nationalization
Answer: B
Q4) A political system that is under the control of totalitarian religious leaders is called secular totalitarianism.
A)True
B)False
Answer: False
Page 5
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Chapter 4: Economic Systems and Development
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218 Verified Questions
218 Flashcards
Source URL: https://quizplus.com/quiz/40387
Sample Questions
Q1) A country that has recently increased the portion of its national production and exports derived from industrial operations is called a(n) ________.
A) developed country
B) newly industrialized country
C) emerging market
D) developing country
Q2) In China, family relationships rarely enter the business environment.
A)True
B)False
Q3) Who popularized the idea of central economic planning?
A) Jiang Zemin
B) Karl Marx
C) Mikhail Gorbachev
D) Henry Fayol
Q4) ________ is rooted in the ideology that the welfare of the group is more important than individual well-being.
Q5) What is the role of privatization in economic transition?
Q6) Learning the secrets of good ________ is extremely important for success in China.
Page 6
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Chapter 5: International Trade
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179 Verified Questions
179 Flashcards
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Sample Questions
Q1) The U.S. Department of Commerce estimates that for every $1 billion increase in exports, around 23,000 jobs are created in the United States.
A)True
B)False
Q2) The level of ________ between certain pairs of countries often reflects the amount of trade that occurs between a company's subsidiaries in two nations.
Q3) Define mercantilism. Explain how it worked and what were its flaws.
Q4) The theory of ________ measures a nation's wealth by the living standards of its people.
A) mercantilism
B) factor proportions
C) absolute advantage
D) relativity
Q5) Because there are gains to be had by both countries party to an exchange, the theory of absolute advantage states that international trade is a zero-sum game.
A)True
B)False
Q6) Trade in ________ makes up roughly 20 percent of total world trade.
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Chapter 6: Business-Government Trade Relations
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194 Verified Questions
194 Flashcards
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Sample Questions
Q1) An additional tariff placed on an imported product that a nation believes is receiving an unfair subsidy is called a(n) ________.
A) countervailing duty
B) ad valorem duty
C) dumping duty
D) compounded tariff
Q2) A(n) ________ is a government tax levied on a product as it enters or leaves a country.
Q3) Protecting infant industries can cause domestic companies to become complacent toward innovation.
A)True
B)False
Q4) Explain what is meant by dumping and the role of the World Trade Organization when charges of dumping are made.
Q5) A primary reason why the United States maintains its embargo on Cuba is the potential to influence internal politics.
A)True
B)False
Q6) According to its supporters, ________ helped South Korea build its chaebol.
Page 8
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Chapter 7: Foreign Direct Investment
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173 Verified Questions
173 Flashcards
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Sample Questions
Q1) Which of the following can motivate foreign direct investment?
A) Customer knowledge
B) Following clients
C) Following rivals
D) All of the above
Q2) A market that operates at peak efficiency and where goods are readily and easily available is said to be a(n) ________.
Q3) The globalization of innovation and the phenomenon of foreign direct investment in research and development activities are motivated purely by demand factors such as the size of local markets.
A)True
B)False
Q4) Discuss the balance of payments using its two major components.
Q5) Describe any three management issues involved in foreign direct investment decisions.
Q6) Which of the following is NOT part of the capital account?
A) U.S. private assets
B) U.S. official reserve assets
C) Foreign official assets
D) Unilateral transfers
Page 9
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Chapter 8: Regional Economic Integration
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182 Verified Questions
182 Flashcards
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Sample Questions
Q1) A key objective of early integration efforts in Europe in the 1950s was ________.
A) trade creation
B) trade diversion
C) peace
D) greater consensus
Q2) The proposed free-trade area running from Alaska to the southern tip of South America is referred to as the ________.
Q3) Studies of the Southern Common Market (MERCOSUR) found that the net effect of the agreement was ________.
A) trade diversion
B) trade creation
C) slower trade
D) regional inflation
Q4) The main difference between a free-trade area and a customs union is that the members of a free-trade area agree to treat trade with all nonmember nations in a similar manner.
A)True
B)False
Q5) Describe the Association of Southeast Asian Nations (ASEAN).
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Chapter 9: International Financial Markets
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195 Verified Questions
195 Flashcards
Source URL: https://quizplus.com/quiz/40392
Sample Questions
Q1) A small group of low-income entrepreneurs from less-developed countries borrowing money at competitive rates with little or no collateral is called ________.
A) microdebit
B) microcredit
C) capital loans
D) capital credit
Q2) The ________ is a network of individuals, companies, financial institutions, and governments that invest and borrow across national boundaries.
Q3) What is an offshore financial center? Differentiate between an operational and a booking center, providing country examples of each.
Q4) Booking centers are usually located on small island nations and territories with favorable tax and/or secrecy laws.
A)True
B)False
Q5) If a currency's forward rate is lower than its spot rate, the currency is trading at a
Q6) What is the foreign exchange market? Explain why investors use this market.
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Page 11
Chapter 10: International Money System
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182 Verified Questions
182 Flashcards
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Sample Questions
Q1) When a country's currency is weak, the price of its ________.
A) exports and imports declines
B) exports on world markets declines and the price of imports increases
C) exports and imports increases
D) exports on world markets increases and the price of imports declines
Q2) Define and differentiate between the law of one price and the purchasing power parity.
Q3) In the earliest days of international trade, ________ was the internationally accepted currency for payments of goods and services.
Q4) Currency devaluation increases consumers' buying power.
A)True
B)False
Q5) The gold standard is a ________ because it fixed nation's currencies to the value of gold.
A) managed float system
B) floating exchange-rate system
C) bartered system
D) fixed exchange-rate system
Q6) Today's international monetary system is considered a ________ float system.
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Q7) What was the significance of the Jamaica Agreement? Identify its key provisions.
Chapter 11: International Strategy and Organization
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199 Verified Questions
199 Flashcards
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Sample Questions
Q1) A well-defined strategy helps to coordinate a company's various divisions and departments so that it reaches its company-wide goals in the most effective and efficient manner possible.
A)True
B)False
Q2) A well-defined strategy ________.
A) helps a company compete effectively in increasingly competitive international markets
B) serves to coordinate a company's various divisions and departments so it reaches its company-wide goals in the most effective manner possible C) focuses a company on the activities it performs best D) all of the above
Q3) A(n) ________ is an organizational structure that divides worldwide operations according to a company's product areas.
Q4) Companies involved in more than one line of business must first formulate a(n) ________ strategy.
Q5) ________ refers to a corporate strategy relying on internally generated growth.
Q6) What is a work team? Describe the three different types of teams.
Q7) ________ are all parties who are affected by a company's activities.
Page 13
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Chapter 12: Analyzing International Opportunities
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169 Verified Questions
169 Flashcards
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Sample Questions
Q1) All of the following are main difficulties associated with conducting international market research EXCEPT ________.
A) availability of data
B) cultural differences
C) marketability of data
D) comparability of data
Q2) Which of the following is the correct sequence in the screening process for potential markets and sites?
A) Measure market/site potential, identify basic appeal, select market/site, assess the national business environment
B) Identify basic appeal, assess the national business environment, measure market/site potential, select the market/site
C) Assess the national business environment, identify basic appeal, select the market/site, measure the potential
D) Select the market/site, measure the potential, assess the national business environment, identify basic appeal
Q3) ________ is the collection and analysis of information in order to assist managers in making informed decisions.
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14
Chapter 13: Selecting and Managing Entry Modes
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212 Verified Questions
212 Flashcards
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Sample Questions
Q1) A(n) ________ is guaranteed by both the exporter's bank in the country of export and the importer's bank in the country of import.
A) revocable letter of credit
B) confirmed letter of credit
C) bill of lading
D) irrevocable letter of credit
Q2) Licensing often involves granting companies the right to use process technologies inherent to the production of a particular good.
A)True
B)False
Q3) A(n) ________ represents its own company's products only, not those of other companies.
A) export trading company
B) agent
C) export management company
D) sales representative
Q4) A(n) ________ allows the bank issuing a letter of credit to modify the terms of the letter only after obtaining the approval of the exporters and the importer.
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Chapter 14: Developing and Marketing Products
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187 Verified Questions
187 Flashcards
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Sample Questions
Q1) Because counterfeit goods are typically similar in quality to the real brand-name product, consumers experience little difference between the two types of products.
A)True
B)False
Q2) A(n) ________ is one in which a producer grants the right to sell its product to many resellers.
Q3) Discuss how international advertising differs from advertising in domestic markets.
Q4) Differentiate between push and pull strategies. Explain the factors that determine whether the push or the pull strategy is appropriate in a given marketing environment.
Q5) Marketing communication is typically a one-way process from the source to the audience.
A)True
B)False
Q6) A(n) ________ is the price charged for products sold between a company's divisions or subsidiaries.
Q7) In a(n) ________ channel, producers sell directly to final buyers.
Q8) ________ are semantic elements that make up all company and product brand names.
Page 16
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Chapter 15: Managing International Operations
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140 Verified Questions
140 Flashcards
Source URL: https://quizplus.com/quiz/40398
Sample Questions
Q1) Two resources that heavily influence the productivity of a location are ________.
A) labor and capital
B) land and labor
C) capital and information
D) information and land
Q2) Which of these refers to deciding the spatial arrangement of production processes within production facilities?
A) Facilities layout planning
B) Capacity planning
C) Location economics
D) Process planning
Q3) Which of these refers to the situation when facilities are spread over several locations and could even mean having one facility for each national business environment in which the company markets its products?
A) Centralized production
B) Global strategy
C) Decentralized production
D) Low-cost leader strategy
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Chapter 16: Hiring and Managing Employees
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157 Verified Questions
157 Flashcards
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Sample
Questions
Q1) ________ offer insight into social, political, legal, and economic institutions.
Q2) In the honeymoon stage of culture shock, ________.
A) new arrivals are fascinated by local sights, pleasant hospitality, and interesting habits
B) unpredictable quirks of the culture become annoying
C) emotions hit rock bottom
D) visitors better understand local customs and behavior and appreciate them
Q3) Which of these properly orders cultural training from least advanced to most advanced?
A) Environmental briefing, language training, cultural orientations
B) Cultural orientation, field experience, language training
C) Cultural assimilation, sensitivity training, language training
D) Sensitivity training, cultural assimilation, field experience
Q4) To speed up the process of getting government approval for local operations, companies can hire home country nationals.
A)True
B)False
Q5) ________ constitute the most basic level of cultural training.
Q6) Briefly explain how companies compensate managers in international markets.
Q7) Plans for reducing a company's workforce is called ________.
Page 18
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