This quiz works best with JavaScript enabled. Home > International Finance > International Finance – Quiz 18 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Finance Quiz 18 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is NOT one of the economic conditions affecting international business? A) Inflation rates. B) Unemployment rates. C) Voting rates. D) GDP. Show Answer Correct Answer: C) Voting rates. 2. A forward contract is an agreement between ..... and ..... to exchange a certain amount of currency at a specified exchange rate (called the forward rate) at a specified date in the future. A) All answers are correct. B) A seller/ a buyer. C) A bank/ a company. D) None of above. Show Answer Correct Answer: C) A bank/ a company. 3. What is the value of one country's currency expressed in the terms of another country's currency? A) Ratio. B) Derivative. C) Exchange rate. D) None of the above. Show Answer Correct Answer: C) Exchange rate. 4. What is the purpose of the World Bank's Structural Adjustment Loans (SALs)? A) To facilitate multilateral trade negotiations. B) To promote stability in exchange rates. C) To provide temporary funds to member countries. D) To enhance a country's long-term economic growth. Show Answer Correct Answer: D) To enhance a country's long-term economic growth. 5. Larobi is a US-based MNC that regularly imports raw materials from China. Larobi pays for these import orders in Chinese Yuan (CNY) and is concerned that the CNY will appreciate in the near future. Which of the following is not an appropriate hedging technique in these circumstances? A) Buy a CNY put option. B) Buy CNY futures contract. C) Buy CNY futures. D) Buy a CNY call option. Show Answer Correct Answer: A) Buy a CNY put option. 6. A long contract requires that the investor A) Sell securities in the future. B) Buy securities in the future. C) Hedge in the future. D) Close out his position in the future. Show Answer Correct Answer: B) Buy securities in the future. 7. Saller Co. has a subsidiary in Mexico. The expected cash flows in pesos to be received in the future from this subsidiary have not changed since last month, but the valuation of Saller Co. has declined since last month. What could've caused this decline in value? A) A weaker Mexican economy. B) Lower Mexican interest rates. C) Depreciation of the Mexican peso. D) Appreciation of the Mexican peso. Show Answer Correct Answer: C) Depreciation of the Mexican peso. 8. Offer/ask rate A) Rate at which dealers buy currency A (and sell currency B). B) Rate at which dealers sell currency A (and buy currency B). Show Answer Correct Answer: B) Rate at which dealers sell currency A (and buy currency B). 9. Portfolio capital flows to emerging economies tend to be larger than flows of foreign direct investment. A) True. B) False. Show Answer Correct Answer: B) False. 10. Entrepreneurial working capital management involves asking for better terms than those offered by any vendor, creditor, lender or customer in order to maximize your business' profitability and cash flow. A) True. B) False. Show Answer Correct Answer: A) True. 11. The amount paid for an option is the A) Strike price. B) Premium. C) Discount. D) Commission. Show Answer Correct Answer: B) Premium. 12. Like international trade and business ..... exists due to the fact that economic activities of businesses, governments, and organizations get affected by the existence of nations. A) CORPORATE FINANCE. B) INTERNATIONAL FINANCE. C) BUSINESS FINANCE. D) PERSONAL FINANCE. Show Answer Correct Answer: B) INTERNATIONAL FINANCE. 13. WHAT IS GATT? A) General Agreement on Tariffs and Trade. B) General Agreement on Trade and Tariffs. C) Both. D) None. Show Answer Correct Answer: A) General Agreement on Tariffs and Trade. 14. Exchange Rate If one euro is equivalent to 1.22 dollars, how many dollars is 120 euros? A) 140.40 DOLLARS. B) 143.40 DOLLARS. C) 146.40 DOLLARS. D) 152.40 DOLLARS. Show Answer Correct Answer: C) 146.40 DOLLARS. 15. If portable disk players made in China are imported into the United States, the Chinese manufacturer is paid with A) International monetary credits. B) International monetary credits. C) Yuan, the Chinese currency. D) Euros, or any other third currency. Show Answer Correct Answer: C) Yuan, the Chinese currency. 16. A call option gives the owner A) The right to sell the underlying security. B) The obligation to sell the underlying security. C) The right to buy the underlying security. D) The obligation to buy the underlying security. Show Answer Correct Answer: C) The right to buy the underlying security. 17. ..... is a way to analyze the economic status of the countries you may wish to do business with, judge the foreign markets, compare inflation rates and pay bills in a foreign currency. A) International Finance. B) International Trade. Show Answer Correct Answer: A) International Finance. 18. What is headroom in American Depository Receipts issuance A) The headroom in American Depository Receipts issuance is the amount of money set aside for marketing the ADRs. B) The headroom in American Depository Receipts issuance is the space above the ceiling in the issuing company's office. C) The headroom in American Depository Receipts issuance is the difference between the number of shares authorized for issuance and the number of shares actually issued. D) The headroom in American Depository Receipts issuance is the term used to describe the upper management team responsible for the ADR issuance. Show Answer Correct Answer: C) The headroom in American Depository Receipts issuance is the difference between the number of shares authorized for issuance and the number of shares actually issued. 19. Assume spot rate 122 JPY/USD, forward rate 1 year 130JPY/USD, 1-year USD interest rate 5%, assuming CIP exists JPY interest rate. According to the formula, the exact form is? A) 11.89%. B) 6.36%. C) 3.28%. D) 1.67%. Show Answer Correct Answer: A) 11.89%. 20. Income balance A) Exports-Imports. B) Investment income and International compensation to employees. C) Gifts and government transfers. D) None of above. Show Answer Correct Answer: B) Investment income and International compensation to employees. ← PreviousNext →Related QuizzesInternational Finance Quiz 1International Finance Quiz 2International Finance Quiz 3International Finance Quiz 4International Finance Quiz 5International Finance Quiz 6International Finance Quiz 7International Finance Quiz 8International Finance Quiz 9International Finance Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books