Course Introduction
International Finance
Test Questions
International Finance explores the financial management of firms and institutions operating in a global environment. The course covers key topics such as foreign exchange markets, currency risk management, international investment decisions, global capital markets, and the impact of macroeconomic factors on international financial strategies. Students will analyze case studies and real-world scenarios to learn how multinational corporations navigate challenges like political risk, exchange rate volatility, and cross-border financing. The course also addresses the regulatory and ethical considerations involved in global financial operations, preparing students to make informed decisions in the complex world of international finance.
Recommended Textbook
International Business The Challenges of Globalization 9th Edition by John J. Wild
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16 Chapters
1650 Verified Questions
1650 Flashcards
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Page 2
Chapter 1: Globalization
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100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/40400
Sample Questions
Q1) ________ markets are characterized by the rural population migrating to cities for better pay and thus,overloading cities' infrastructures.
A) Traditional
B) Emerging
C) Virtual
D) Developed
Answer: B
Q2) International business includes all commercial transactions between two or more countries.
A)True
B)False
Answer: True
Q3) The population of a(n)________ market is mostly rural and is characterized by poor infrastructure with little credit or collateral.
A) emerging
B) traditional
C) developed
D) virtual
Answer: B
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Page 3
Chapter 2: Cross-Cultural Business
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) ________ is increasing the pace of both cultural diffusion and cultural change.
A) Collectivism
B) Enculturation
C) Fundamentalism
D) Globalization
Answer: D
Q2) Discuss the concept of lingua franca and how it affects communication in international business.
Answer: A lingua franca is a third or "link" language understood by two parties who speak different native languages.The original lingua franca arose to support ancient trading activities and contained a mixture of Italian and French,along with Arabic,Greek,and Turkish.Multinational corporations sometimes choose a lingua franca for official internal communications because they operate in many nations,each with its own language.Although only 5 percent of the world's population speaks English as a first language,it is the most common lingua franca in international business,followed closely by French and Spanish.
Q3) Low levels of class consciousness encourage social mobility and lessen conflict.
A)True
B)False
Answer: True
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Chapter 3: Political Economy and Ethics
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) A legal tradition based on religious teachings is called ________ law.
A) democratic
B) common
C) civil
D) theocratic
Answer: D
Q2) What do communists and socialists have in common?
A) Both believe in the elimination of political opponents.
B) Both believe that the government should control all types of economic activity.
C) Both believe that the pricing of goods should be the responsibility of individuals.
D) Both believe that a violent revolution is necessary to seize control over resources.
Answer: B
Q3) Trademark protection typically lasts indefinitely,provided the word or symbol continues to be distinctive.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Economic Development of Nations
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86 Verified Questions
86 Flashcards
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Sample Questions
Q1) ________ occurs if ownership of a property or assets of a company is transferred to the host government.
A) Internalization
B) Nationalization
C) Deportation
D) Deracination
Q2) Lobbying is the policy of hiring people to represent a company's views on political matters.
A)True
B)False
Q3) Compare and contrast the business environments in China and Russia.
Q4) Differentiate between GDP and GNP.Briefly discuss the drawbacks of using GDP and GNP as indicators of economic development.
Q5) Political risk that affects all firms in a country is referred to as ________.
A) micropolitical risk
B) macropolitical risk
C) inclusive political risk
D) exclusive political risk
Q6) How are countries classified? Explain with examples.
Q7) What is privatization? What role does it play in economic transition?
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Chapter 5: International Trade Theory
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) According to the international product life cycle theory,the innovating firm's country is primarily an exporter of the product in all three stages.
A)True
B)False
Q2) Nations following the theory of ________ believed that the world's wealth was limited and that a nation could increase its share of the pie only at the expense of its neighbors.
A) absolute advantage
B) comparative advantage
C) mercantilism
D) factor proportions
Q3) Factor proportions theory states that a country will produce and export those goods that require resources abundantly available within the country.
A)True
B)False
Q4) Explain mercantilism.What were its major flaws?
Q5) Explain how the national competitive advantage theory supports and builds upon the factor proportions theory.
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Chapter 6: Political Economy of Trade
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108 Verified Questions
108 Flashcards
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Sample Questions
Q1) The protection of infant industries by a nation's government can cause more economic harm than good.
A)True
B)False
Q2) A(n)________ is an absolute ban on the exporting and importing of goods to a particular destination.
A) voluntary export restraint
B) embargo
C) ad valorem tariff
D) tariff rate quota
Q3) Which of the following is an instrument that governments use to promote trade?
A) embargoes
B) tariffs
C) export financing
D) administrative delays
Q4) Explain why governments impose restrictions on free trade.
Q5) The major purpose of foreign trade zones is to implement barriers to trade and commerce.
A)True
B)False
Page 8
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Chapter 7: Foreign Direct Investment
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104 Verified Questions
104 Flashcards
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Sample Questions
Q1) Discuss the role entrepreneurs and small businesses play in the expansion of FDI.What are some of the surprises that managers face as they invest in new markets abroad?
Q2) The ________ theory states that when an aspect of the market makes a transaction less efficient than it could be,a company will undertake foreign direct investment to internalize the transaction and thereby remove the efficiency-reducing aspect.
A) market power
B) eclectic
C) international product life cycle
D) market imperfections
Q3) Why is it important to assess R&D costs when considering FDI? Given its costs,how can FDI benefit the host country with access to technology,management skills,and employment?
Q4) In which of the following accounts would GMI's purchase of the company in Brazil appear?
A) the current account of the United States
B) the current account of Brazil
C) the capital account of the Thailand
D) the capital accounts of Brazil and the United States
Page 9
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Chapter 8: Regional Economic Integration
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111 Verified Questions
111 Flashcards
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Sample Questions
Q1) A(n)________ combines the elimination of internal trade barriers among member countries with the adoption of common external trade policies toward nonmembers.
A) free trade area
B) customs union
C) common market
D) economic union
Q2) Bolivia,Colombia,Ecuador,and Peru belong to the ________.
A) Latin American Free Trade Association (LAFTA)
B) Central American Common Market
C) Andean Community
D) Latin American Integration Association (ALADI)
Q3) In a customs union,each country can maintain whatever policy it sees fit against nonmember countries.
A)True
B)False
Q4) Describe some of the cultural challenges of doing business with countries of Central and Eastern Europe.How do these challenges compare with the challenges of doing business with ASEAN countries?
Q5) Discuss the benefits and drawbacks of regional integration.
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Chapter 9: International Financial Markets
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) Company debt normally takes the form of ________,and it is an asset that can be traded anywhere at any time.
A) global bonds
B) equity
C) stocks
D) bank loans
Q2) The practice of insuring against potential losses that result from adverse changes in exchange rates is called currency ________.
A) hedging
B) arbitrage
C) speculation
D) conversion
Q3) What is the role of debt in national capital markets,and what form does company debt normally take? Describe the different types of international bonds.
Q4) Investors use the foreign exchange market for ________.
A) stock dilution
B) currency speculation
C) market capitalization
D) mean reversion
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Chapter 10: International Monetary System
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107 Verified Questions
107 Flashcards
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Sample Questions
Q1) The ________ is the collection of agreements and institutions that govern exchange rates.
A) Bretton Woods Agreement
B) Plaza Accord
C) international monetary system
D) international bond market
Q2) It the actual euro/dollar exchange rate on currency markets is 1.2/$,and a kilogram of wheat still costs $1 in the U.S.and 1.5 in France,Sam also knows that the price of a kilogram of wheat in France is ________.
A) $1.25
B) $.80
C) .80
D) 1.2
Q3) Sam already knows that the ________ tells us the value of one country's currency we must pay to receive a certain amount of another.
A) exchange rate
B) par value
C) law of one price
D) purchasing power parity theory
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Page 12
Chapter 11: International Strategy and Organization
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) Decreasing levels of customer loyalty to an organization's products is a major disadvantage of the ________ strategy.
A) blue ocean
B) stability
C) low-cost leadership
D) growth
Q2) A team of top managers from both headquarters and international subsidiaries who meet to develop solutions to company-wide problems is referred to as a ________ team.
A) virtual
B) global team
C) cross-functional team
D) self-managed team
Q3) A retrenchment strategy is designed to ________.
A) encourage growth through joint ventures
B) reduce the scale or scope of a corporation's operations
C) focus exclusively on internally generated growth
D) guard against organizational change
Q4) Describe the four key approaches to corporate strategy,providing an example of each.
Page 13
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Chapter 12: Analyzing International Opportunities
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102 Verified Questions
102 Flashcards
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Sample Questions
Q1) When developing a market-potential indicator for an emerging market,market growth rate is typically estimated from the ________.
A) per capita private consumption
B) GDP
C) total population
D) percentage of a market's population in the middle class
Q2) When screening a potential market,which of the following would you advise John to do first?
A) assess the national business environment
B) select the market
C) identify basic appeal for markets
D) measure market potential
Q3) ________ is the most common form of international business activity.
A) Exporting
B) Licensing
C) Greenfield strategy
D) Management contract
Q4) Describe any five variables commonly included in creating a market-potential analysis for an emerging market.
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Chapter 13: Selecting and Managing Entry Modes
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Sample Questions
Q1) Typically,indirect exporting relies on local sales representatives or distributors.
A)True
B)False
Q2) Countertrade is not an option for smaller companies because of the cash outlays involved.
A)True
B)False
Q3) A ________ is a separate company created and owned by two or more independent entities to achieve a common business objective.
A) wholly owned subsidiary
B) joint venture
C) strategic alliance
D) turnkey project
Q4) Which of the following is a method of export/import financing?
A) offset
B) buyback
C) switch trading
D) documentary collection
Q5) What are the different financing methods available to exporters and importers?
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Chapter 14: Developing and Marketing Products
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103 Verified Questions
103 Flashcards
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Sample Questions
Q1) Product differentiation is more likely when nations share the same level of economic development.
A)True
B)False
Q2) A(n)________ channel gives producers a good deal of control over the sale of their product by channel members such as wholesalers and retailers.
A) exclusive
B) intensive
C) two-level
D) selective
Q3) When a product has a higher selling price in the target market than it does in the home market or the country where production takes place,it is called ________.
A) price skimming
B) price escalation
C) price dispersion
D) price fixing
Q4) Explain the primary concerns of managers when establishing distribution policies.
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Chapter 15: Managing International Operations
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Discuss why companies strive toward quality improvement and the two methods of doing so.
Q2) Which of the following reasons encourages companies to buy a product rather than make it?
A) Buying a product gives managers greater control over the production process.
B) Buying a product increases the company's total costs significantly compared to making the product in-house.
C) Buying a product ensures non-flexibility to local market conditions.
D) Buying a product enables a company to gain a great deal of power in their relationships with suppliers.
Q3) The top management of the company contends that Hafstrom would benefit most from manufacturing its own parts,rather than sourcing it from elsewhere,even if they are made at another location overseas.Which of the following is being recommended in this approach?
A) just-in-time manufacturing
B) location economies
C) vertical integration
D) outsourcing
Q4) What are the advantages of American Depository Receipts (ADRs)?
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Chapter 16: Hiring and Managing Employees
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102 Flashcards
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Sample Questions
Q1) The process of identifying and attracting a qualified pool of applicants for vacant positions is called recruiting.
A)True
B)False
Q2) Firms using a geocentric staffing model are primarily concerned with ________.
A) ensuring that home office views and policies are maintained
B) gaining support and assistance from local communities
C) hiring the best person available regardless of nationality
D) employing local managers with technical expertise
Q3) Which of the following terms is defined as the process of identifying and attracting a qualified pool of applicants for vacant positions?
A) orientation
B) outsourcing
C) recruitment
D) selection
Q4) The process of recruitment involves screening and hiring the best-qualified applicants with the greatest performance potential.
A)True
B)False
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