International Finance Practice Questions
Course Introduction
International Finance explores the financial dynamics and complexities that arise when businesses operate across national borders. The course covers key topics such as foreign exchange markets, currency risk management, international financial markets and instruments, balance of payments, and the impact of global financial institutions like the IMF and World Bank. Students will examine how international monetary systems, exchange rate regimes, and global capital flows influence business decisions, investments, and policy-making. Through real-world case studies and financial modeling, the course prepares students to understand and manage the challenges and opportunities presented by todays interconnected financial environment.
Recommended Textbook
Global Business Today 7th Edition by
Charles W. L. Hill
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16 Chapters
2381 Verified Questions
2381 Flashcards
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Page 2
Chapter 1: Globalization
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151 Verified Questions
151 Flashcards
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Sample Questions
Q1) In any society,the media are the primary conveyors of culture.
A)True
B)False
Answer: True
Q2) What was the effect of the antiglobalization protests in Seattle in the U.S.?
Answer: The antiglobalization protests in Seattle in December 1999 was the first of its kind where more than 40,000 protesters blocked the streets of Seattle in an attempt to shut down a World Trade Organization meeting being held in the city.The demonstrators were protesting against a wide range of issues.The protests turned violent,transforming the normally placid streets of Seattle into a running battle between "anarchists" and Seattle's bemused and poorly prepared police department.Pictures of brick-throwing protesters and armored police wielding their batons were duly recorded by the global media,which then circulated the images around the world.Meanwhile,the World Trade Organization meeting failed to reach agreement,and although the protests outside the meeting halls had little to do with that failure,the impression took hold that the demonstrators had succeeded in derailing the meetings.Emboldened by the experience in Seattle,antiglobalization protesters now turn up at almost every major meeting of a global institution.
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Chapter 2: National Differences in Political Economy
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154 Verified Questions
154 Flashcards
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Sample Questions
Q1) The political economy of many of the world's nation-states has changed radically since the late 1980s.Identify the two trends that have emerged during this time.
Answer: Two trends have been evident in the changes in the political economies of states since the late 1980s.First,during the late 1980s and early 1990s,a wave of democratic revolutions swept the world.Totalitarian governments collapsed and were replaced by democratically elected governments that were typically more committed to free market capitalism than their predecessors had been.Second,there has been a strong move away from centrally planned and mixed economies and toward a more free market economic model.
Q2) Which of the following theories was propounded by Fukuyama?
A)The future is a world dominated by a universal civilization characterized by democratic regimes and free market capitalism.
B)While many societies may be modernizing,they are not becoming more free.
C)Modernization in non-Western societies can result in a retreat toward the traditional.
D)The world will witness a clash of civilizations,each of which has its own value systems and ideology.
Answer: A
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Page 4
Chapter 3: Differences in Culture
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) _____ is defined as a system of shared beliefs and rituals that are concerned with the realm of the sacred.
A)Culture
B)Caste
C)Philosophy
D)Religion
Answer: D
Q2) Which of the following is a criticism of Hofstede's four cultural dimensions?
A)Hofstede has ignored the one-to-one correspondence between culture and the nation-state.
B)Most of Hofstede's findings are in direct conflict with standard Western stereotypes.
C)Hofstede assumes that most countries have more than one cultural dimension.
D)Certain social classes were excluded from Hofstede's sample.
Answer: D
Q3) The emphasis on individualism facilitates team building within an organization.
A)True
B)False
Answer: False
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Chapter 4: Ethics in International Business
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142 Verified Questions
142 Flashcards
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Sample Questions
Q1) _____ focus on the attainment of a fair distribution of economic goods and services.
A)Utilitarian theories
B)Justice theories
C)Distribution theories
D)Kantian ethics
Q2) Which foreign company in Nigeria has been repeatedly criticized for its alleged contribution to human rights violations in the country?
A)Royal Dutch Shell
B)Nike
C)British Petroleum
D)Banana Republic
Q3) The best decisions,from a utilitarian perspective,are those that:
A)maximize the firm's profit.
B)reflect the ethics of the culture in which it is operating.
C)accommodate universal moral principles.
D)produce the greatest good for the greatest number of people.
Q4) What can businesses do to make sure they do not hire people who subsequently turn out to have poor personal ethics?
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Chapter 5: International Trade Theory
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151 Verified Questions
151 Flashcards
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Sample Questions
Q1) The relevance of the product life-cycle theory in the modern world seems more limited because:
A)many countries have increasingly invested in the U.S.labor market over the past century.
B)with the diminishing strength of the U.S.dollar,it loses the ability to generalize trade globally.
C)it holds true only for the brief U.S.dominance of the global economy.
D)historically,it has provided inaccurate explanations of international trade patterns.
Q2) Largely discredited and primitive,mercantilism still influences the trade policies of many countries.
A)True
B)False
Q3) Discuss Paul Samuelson's critique of free trade,where he argued that in some circumstances,dynamic gains can lead to an outcome that is not so beneficial.
Q4) Describe Adam Smith's concept of absolute advantage.
Q5) What is meant by the term "free trade"? Is free trade compatible with the concept of mercantilism?
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Page 7
Chapter 6: The Political Economy of International Trade
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152 Verified Questions
152 Flashcards
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Sample Questions
Q1) Which of the following is a government payment to a domestic producer?
A)Duty
B)Subsidy
C)Quota
D)Tariff
Q2) Briefly describe the implications of the strategic trade policy as applied to international trade.
Q3) To try and establish Airbus as a global competitor against Boeing,the governments of Britain,France,Germany,and Spain:
A)threatened 100% tariffs on the import of Boeing aircraft.
B)drafted legislations that required 25% of Boeing's aircraft by value to be manufactured in Europe.
C)imposed import quotas on American-manufactured Boeing aircraft.
D)pooled in subsidies worth $15 billion.
Q4) Explain the organizational structure of the WTO and mention the functions of its key organs.
Q5) List the fours issues at the forefront of the current agenda of the WTO.
Q6) Describe briefly,with examples,the use of trade policies by governments to support their foreign policy objectives.
Page 8
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Chapter 7: Foreign Direct Investment
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151 Verified Questions
151 Flashcards
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Sample Questions
Q1) One of the indirect effects of FDI on employment in a host country arises when:
A)a foreign MNE employs a number of host-country citizens.
B)jobs are created because of increased local spending by employees of the MNE.
C)the MNE brings in managers from the home country for its operations.
D)a number of employees of the MNE are deputed in subsidiaries in other countries.
Q2) Which of the following is NOT a common incentive that governments offer foreign firms to invest in their countries?
A)Grants or subsidies
B)Ownership restraints
C)Low-interest loans
D)Tax concessions
Q3) Granting a foreign entity the right to produce and sell the firm's product in return for a royalty fee on every unit the foreign entity sells is called licensing.
A)True
B)False
Q4) FDI was governed by the GATT until the 1990s.
A)True
B)False
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Page 9
Chapter 8: Regional Economic Integration
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149 Verified Questions
149 Flashcards
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Sample Questions
Q1) Which of the following is considered the ultimate controlling authority within the EU?
A)Court of Justice
B)European Commission
C)European Council
D)European Parliament
Q2) Which of the following observations is true of the Andean Community?
A)It now operates as a common market.
B)It now operates as an economic union like the EU.
C)It now operates as a customs union.
D)It has been disbandeD.
Q3) A major stumbling block in the creation of the Free Trade Area of the Americas is the requirement for South American countries to reduce agricultural subsidies and tariffs on agricultural imports.
A)True
B)False
Q4) Describe the concept of regional economic integration.Do you believe that regional economic integration is a good thing? Explain your answer.
Q5) Discuss the impact of the Association of Southeast Asian Nations.
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Chapter 9: The Foreign Exchange Market
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150 Verified Questions
150 Flashcards
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Sample Questions
Q1) Foreign exchange transactions that occur when a dealer wants to sell a nondollar currency and buy another rarely involve dollars.
A)True
B)False
Q2) Economic exposure is distinct from transaction exposure,which is concerned with the effect of exchange rate changes on individual transactions,most of which are short-term affairs that will be executed within a few weeks or months.
A)True
B)False
Q3) _____ typically involves the short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates.
A)Venture capital
B)Hedging
C)Currency speculation
D)Exchange rate manipulation
Q4) What is a currency swap?
Q5) What is the Fisher effect?
Q6) Differentiate between spot exchange rates and forward exchange rates.
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Chapter 10: The International Monetary System
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149 Verified Questions
149 Flashcards
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Sample Questions
Q1) Identify the countries worst affected by the Southeast Asian crisis of 1997.
A)Indonesia,Thailand,and South Korea
B)Malaysia,Singapore,and the Philippines
C)Japan,Indonesia,and Vietnam
D)Singapore,Vietnam,and Malaysia
Q2) Describe the three broad types of financial crises that have occurred over the past 30 years and have required IMF involvement.
Q3) Which of the following is being practiced after the collapse of the system of fixed exchange rates established at Bretton Woods?
A)Clean float system
B)Managed-float system
C)Currency board system
D)Gold standard
Q4) Under a pegged exchange rate regime,a country will peg the value of its currency to:
A)an index of world currencies maintained by the World Bank.
B)that of a major currency.
C)an index of "peer nation" currencies.
D)an index of its historic currency rates.
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Page 12
Chapter 11: The Strategy of International Business
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150 Verified Questions
150 Flashcards
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Sample Questions
Q1) The price a firm charges for a good or service is typically more than the value placed on that good or service by the customer.
A)True
B)False
Q2) Which of the following could be the most appropriate strategy for MTV,given the business imperative that their programming provides a good match to tastes and preferences in different national markets?
A)International strategy
B)Global standardization strategy
C)Localization strategy
D)Transnational strategy
Q3) Which of the following products will have intense pressures for cost reduction?
A)Cars
B)Watches
C)Designer clothes
D)Sugar
Q4) What is the experience curve? How can an involvement in overseas markets help a firm capture experience curve advantages more rapidly?
Q5) What are the disadvantages of strategic alliances?
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Chapter 12: Entering Foreign Markets
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150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/60072
Sample Questions
Q1) When a firm perceives its technological advantage to be only transitory,when it expects rapid imitation of its core technology by competitors,the firm will invariably want to invest in a wholly owned subsidiary.
A)True
B)False
Q2) Both _____ are characterized by low development costs and risks.
A)importing and exporting
B)licensing and franchising
C)greenfield investments and joint ventures
D)wholly owned subsidiaries and exporting
Q3) Which of the following is an advantage of acquisitions?
A)They are quick to execute and help firms to rapidly build their presence in the target foreign market.
B)Acquisitions avoid the pitfall of the hubris hypothesis.
C)The vast majority of acquisitions are judged to be successful.
D)On average,the profits and market shares of acquired companies rose substantially following acquisition.
Q4) What are pioneering costs? When do these costs arise?
Q5) Compare and contrast the entry modes of licensing and franchising.
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Chapter 13: Exporting,Importing,and Countertrade
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149 Flashcards
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Sample Questions
Q1) A _____ is issued to the exporter by the common carrier transporting the merchandise and it serves as a receipt,a contract,and a document of title.
A)bill of lading
B)collateral
C)draft
D)letter of credit
Q2) When a firm builds a plant in a country and agrees to take a certain percentage of the plant's output as partial payment for the contract,it is called:
A)a counterpurchase.
B)an offset.
C)switch trading.
D)a buyback.
Q3) The most restrictive countertrade arrangement is:
A)counterpurchase.
B)offset.
C)barter.
D)switch trading.
Q4) Briefly describe the mechanisms for financing export and imports.
Q5) What is countertrade? Give an example of when it can be used.
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Chapter 14: Global Production,Outsourcing,and Logistics
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150 Verified Questions
150 Flashcards
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Sample Questions
Q1) Which of the following is an advantage related to both relatively low level of fixed costs and low minimum efficient scale?
A)A firm can hedge against potential adverse moves in currencies.
B)Products can be standardized across different national markets.
C)Firms can operate entirely out of their home countries.
D)Product manufacturing can be limited to a single location.
Q2) Logistics is the activity that controls the transmission of physical materials through the value chain,from procurement through production and into distribution.
A)True
B)False
Q3) The larger the minimum efficient scale of a plant relative to total global demand,the greater is the argument for:
A)decentralizing production in multiple locations.
B)centralizing production in a single location or a limited number of locations.
C)achieving location economies by operating in multiple locations.
D)centralizing production in multiple locations.
Q4) Discuss the Six Sigma methodology for improving product quality.
Q5) Describe the major efficiency benefits of flexible machine cells.
Q6) How can improved quality control reduce costs for a firm?
Page 16
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Chapter 15: Global Marketing and RD
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150 Verified Questions
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Sample Questions
Q1) The most important aspect of cultural differences is probably the impact of tradition.
A)True
B)False
Q2) Which of the following is true of price discrimination?
A)It exists whenever consumers in different countries are charged different prices for different products.
B)It involves charging whatever the market will bear.
C)It can help a company minimize its costs.
D)It is against economic sense to charge different prices in different countries.
Q3) Many firms vary their marketing mix from country to country,depending on differences in national culture,economic development,product standards,distribution channels,and so on.
A)True
B)False
Q4) Strategic pricing has three aspects: predatory pricing,multipoint pricing,and segment curve pricing.
A)True
B)False
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Chapter 16: Global Human Resource Management
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140 Verified Questions
140 Flashcards
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Sample Questions
Q1) Historically,most international businesses have been more concerned with A)cultural integration.
B)management development.
C)training.
D)knowledge sharing.
Q2) Unless a host country has a reciprocal tax treaty with the expatriate's home country,the expatriate may have to pay income tax to both the home-and host-country governments.
A)True
B)False
Q3) Which of the following is NOT one of the dimensions recommended by Mendenhall and Oddou to predict success in a foreign posting?
A)Self-orientation
B)Cultural toughness
C)Technical ability
D)Perceptual ability
Q4) What is expatriate failure? What is the common rate at which it occurs? Cite the main reasons why it occurs for U.S.multinationals.
Q5) What is ITS? What are the impediments to the strategies used by organized labor?
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