International Finance
Mock Exam
Course Introduction
International Finance examines the financial interactions that occur between two or more countries, focusing on topics such as foreign exchange markets, balance of payments, international monetary systems, and global financial institutions. This course explores how multinational corporations manage currency risk, structure international investments, and respond to cross-border financing challenges. By analyzing exchange rate dynamics, international financial crises, and global capital flows, students gain a comprehensive understanding of the economic, political, and institutional factors that influence the movement of money around the world.
Recommended Textbook
Global Business Today 3rd Canadian Edition by Charles Hill Thomas McKaig
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16 Chapters
2010 Verified Questions
2010 Flashcards
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Page 2
Chapter 1: Globalization
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128 Verified Questions
128 Flashcards
Source URL: https://quizplus.com/quiz/51210
Sample Questions
Q1) The foreign direct investment by non-U.S.firms was motivated primarily by the following two factors:
A)the desire to disperse production activities to optimal locations; and the desire to build a direct presence in major foreign markets
B)the desire to disperse production activities to optimal locations; and the desire to influence foreign exchange rates
C)the desire to influence foreign exchange rates; and the desire to influence political developments in foreign countries
D)the desire to build a direct presence in major foreign markets; and the desire to influence political developments in foreign countries
E)the desire to reduce dependence on the United States and to increase direct access to markets
Answer: A
Q2) General Agreement on Tariffs and Trade is what the acronym GATT stands for. A)True
B)False
Answer: True
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Page 3
Chapter 2: Country Differences in Political Economy
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141 Verified Questions
141 Flashcards
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Sample Questions
Q1) What country is the last major Communist power left?
A)Russia
B)China
C)Vietnam
D)North Korea
E)Cuba
Answer: B
Q2) A form of totalitarianism in which political power is monopolized by a party, group, or individual that governs according to religious principles is called __________.
A)right-wing totalitarianism
B)theocratic totalitarianism
C)ancestral totalitarianism
D)tribal totalitarianism
E)fundamental totalitarianism
Answer: B
Q3) There must be no restrictions on supply for a market economy to work.
A)True
B)False
Answer: True
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Page 4
Chapter 3: The Cultural Environment
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133 Verified Questions
133 Flashcards
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Sample Questions
Q1) A society's _________ refers to its basic social organization.
A)"social bureaucracy"
B)"social regime"
C)"social structure"
D)"social hierarchy"
E)"social mobility"
Answer: C
Q2) Which of the following lists correctly identifies the world's major religions by size of following (from highest to lowest)?
A)Hinduism, Islam, Christianity, Confucianism, Buddhism
B)Christianity, Islam, Hinduism, Buddhism, Confucianism
C)Christianity, Hinduism, Islam, Confucianism, Buddhism
D)Buddhism, Islam, Christianity, Hinduism, Confucianism
Answer: B
Q3) The relationship among religion, ethics, and society is straightforward and relatively easy to discern.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Ethics in International Business
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123 Verified Questions
123 Flashcards
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Sample Questions
Q1) Article 1 of the Universal Declaration of Human Rights is thought to echo ________ ethics.
A)utilitarian
B)Friedman
C)Kantian
D)cultural relativism
E)social democratic
Q2) Business ethics is not divorced from the personal ethics of the individuals conducting business.
A)True
B)False
Q3) What is considered by some to be the fifth root cause contributing to the demise of the organization known as Enron?
A)Concern for workers
B)Open communication
C)Control
D)Leadership
E)Culture
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Chapter 5: International Trade Theories
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120 Verified Questions
120 Flashcards
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Sample Questions
Q1) The main tenet of mercantilism was that it was in a country's best interest to maintain a:
A)export and import trade balance
B)an import trade embargo
C)an export trade surplus
D)an export trade deficit
E)large reserve of gold
Q2) Porter argues that the presence of all components is usually required for the "diamond" to boost:
A)international recognition.
B)competitive performance.
C)corporate social responsibility.
D)employee morale.
E)national export surpluses
Q3) A firm should invest in upgrading advanced factors of production because it is in the best interest of business for a firm, according to Porter's theory.
A)True
B)False
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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131 Verified Questions
131 Flashcards
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Sample Questions
Q1) Aimed at avoiding rising unemployment by protecting domestic industry and diverting consumer demand away from foreign products, the ___________ tariff erected an enormous wall of tariff barriers.
A)Smoot-Hawley Act
B)Porter-Ricardo Act
C)Heckscher-Ohlin
D)Smith-Krugman
E)Vernon-Weimar
Q2) According to the textbook, Paul Krugman, a professor at MIT, predicts that a country that attempts to use strategic trade policy to establish a domestic firm (or firms) in a dominant position in a global industry will probably
A)succeed fairly smoothly.
B)be viewed favorable in the international community.
C)provoke retaliation.
D)be successful if the policy is in force for at least three years.
E)experience strong foreign opposition, but succeed in the long-run
Q3) What is a voluntary export restraint? Can countries use voluntary export restraints to avoid trade retaliation? Explain your answer.
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Chapter 7: Foreign Direct Investment
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125 Verified Questions
125 Flashcards
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Sample Questions
Q1) Most FDI has been directed at the developed nations of the world as firms based in advanced countries invested in the others' markets.
A)True
B)False
Q2) When two or more enterprises encounter each other in different regional markets, national markets, or industries, _____________ arises.
A)a monopoly
B)an oligopoly
C)a cartel
D)multipoint competition
E)international competition
Q3) _______________ has not contributed to the increase in FDI over the past several years.
A)Globalization of the world economy
B)The desire to have production facilities close to major customers
C)A strong U.S.economy
D)Dramatic shift towards socialist and communist political institutions
E)Increasing corporate profits
Q4) Name three reasons that licensing may not be an attractive option.
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Chapter 8: Regional Economic Integration
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137 Verified Questions
137 Flashcards
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Sample Questions
Q1) Define trade creation and trade diversion with respect to regional economic integration.Given that integration can both create and divert trade, under what circumstances will regional integration be in the best interest of the world economy?
Q2) The most recent countries to become a members of ASEAN are:
A)China, Vietnam, and Cambodia
B)Vietnam, Laos, and Malaysia
C)Brunei, China, and Thailand
D)Japan, South Korea, and Thailand
E)Vietnam, Laos and Myanmar
Q3) The most enduring free trade area in the world is the
A)Asian Free Trade Association.
B)MERCOSUR.
C)European Free Trade Association.
D)North American Trade Association.
E)European Union
Q4) To signify the importance of the Single European Act, the European Union decided to change its name to the European Community once the act took effect.
A)True
B)False
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Chapter 9: The Foreign Exchange Market
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141 Verified Questions
141 Flashcards
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Sample Questions
Q1) Currency speculation typically involves
A)the short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates.
B)the permanent movement of funds from one currency to another in the hopes of profiting from long-term investment in a particular country.
C)the simultaneous purchase of currencies from several countries in hopes of profiting from increasing economic prosperity.
D)the liquidation of currency in favour of precious metals as a hedge against inflation.
E)Buying low and holding currency until it stabilizes, than selling
Q2) The _____________ theory tells us that a country with a high inflation rate will see deprecation in its currency exchange rate.
A)law of one price
B)monetary system
C)PPP
D)price inflation
E)currency determinism
Q3) Why do companies prefer not to use counter trade if it can be avoided?
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11
Chapter 10: The Global Monetary System
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129 Verified Questions
129 Flashcards
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Sample Questions
Q1) The world's four major trading currencies are all free to float against each other.They include all of these except
A)the British pound
B)the Japanese yen
C)the Spanish peso
D)the U.S.dollar
E)the European Euro
Q2) Under a ______________ exchange rate regime, a country's ability to expand or contract its money supply as it sees fit is limited by the need to maintain exchange rate parity.
A)forward
B)fixed
C)narrow
D)floating
E)managed float
Q3) Critics of a floating exchange rate regime argue that speculation causes stability in exchange rates.
A)True
B)False
Q4) Explain what is a moral hazard when it is used as a criticism of IMF policies.
Page 12
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Chapter 11: Global Strategy
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132 Verified Questions
132 Flashcards
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Sample Questions
Q1) All of the following, except ____________, are included in infrastructure.
A)structure
B)employee relations
C)culture
D)control systems
E)all of these answers are correct
Q2) Which of the following two strategies suffer from a failure to exploit experience curve effects?
A)International and transnational
B)multi-domestic and international
C)Transnational and global
D)Global and international
E)multi-domestic and multinational
Q3) One of the principle risks with strategic alliances is:
A)that they bring together the complementary skills of alliances partners
B)alliances may facilitate entry into foreign markets
C)a firm can give away more than it receives
D)that they allow firms to share fixed costs
E)can establish technological standards that are not compatible with one of the partners
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Chapter 12: Entering Foreign Markets
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116 Verified Questions
116 Flashcards
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Sample Questions
Q1) 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
Q2) Lack of control over quality and the inability to engage in global strategic coordination are distinct disadvantages of ___________.
A)franchising
B)exporting
C)wholly owned subsidiaries
D)turnkey projects
E)joint ventures
Q3) A joint venture entails establishment of a firm that is jointly owned by two or more otherwise independent companies.
A)True
B)False
Q4) What is meant by the term, "first-mover advantage?" Describe several first-mover advantages.
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Chapter 13: Exporting, Importing, and Countertrade
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86 Verified Questions
86 Flashcards
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Sample Questions
Q1) 3M has built its export success on all of these principles except:
A)adding additional product lines once export operation is successful.
B)cultivating personal relationships with customers.
C)hiring local to promote the firm's products.
D)entering on a small scale to reduce risks.
E)using a first mover strategy
Q2) Lack of trust in international trade is exacerbated by the distance between two parties in space, language, and culture.
A)True
B)False
Q3) The bill of lading can function as collateral against which funds may be advanced to the exporter by its local bank before final payments by the importer.
A)True
B)False
Q4) Given the financial and other risks, today, governments at all levels in Canada are not willing to assist small firms in starting export operations.
A)True
B)False
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Chapter 14: Global Marketing and RD
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132 Verified Questions
132 Flashcards
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Sample Questions
Q1) Explain what is meant by distribution strategy.What are the main differences among countries' distribution systems? Ultimately, how does a firm determine its distribution strategy in individual foreign markets?
Q2) The use of price as a competitive weapon to drive weaker competitors out of a national market is called
A)pillage pricing.
B)predatory pricing.
C)forward pricing.
D)competitive pricing.
E)war pricing
Q3) Country of origin effects are:
A)always negative
B)the same as source effects
C)a subset of source effects
D)affected by predatory pricing
E)affected by channel length
Q4) Describe what is meant by the term "marketing mix." What factors cause a firm to vary its marketing mix across markets?
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Chapter 15: Global Production, Outsourcing, and Logistics
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) The greatest advantage of buying component parts from independent suppliers is that the firm can maintain its flexibility.
A)True
B)False
Q2) Needs that are the same all over the world are referred to as ______________ needs.
A)specific
B)domestic
C)universal
D)individualistic
E)global
Q3) What refers to the ability to produce a wider variety of end products at a unit cost that at one time could be achieved only through the mass production of a standardized output?
A)Assembly-line like customization
B)Standardized customization
C)Mass customization
D)Economies of customization
E)Product customization
Q4) Describe the terms flexible manufacturing and mass customization.
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Chapter 16: Global Human Resource Management
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127 Verified Questions
127 Flashcards
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Sample Questions
Q1) Define and describe the balance-sheet approach used by many MNCs to calculate the compensation they wish to offer to their expatriates.
Q2) ______________ percent of U.S.multinationals experience expatriate failure rates of 10 percent or more, according to a study conducted by R.L.Tung.
A)91
B)76
C)44
D)17
E)28
Q3) Discuss the differences between an ethnocentric approach, a polycentric approach, and a geocentric approach to staffing for international businesses.What is the rationale behind each of these approaches? How does a firm's staffing policy relate to the strategy that it is pursuing in a foreign country?
Q4) What are management development programs? How can international businesses use management development programs as a strategic tool?
Q5) Explain the impact of unionization on HRM.
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