This quiz works best with JavaScript enabled. Home > International Finance > International Finance – Quiz 19 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Finance Quiz 19 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The dark matter hypothesis is asking to revisit the question what is actually the true net asset position of a country. A) False. B) True. Show Answer Correct Answer: B) True. 2. The agency costs of an MNC are likely to be lower if it: A) Scatters its subsidiaries across many foreign countries. B) Increases its volume of international business. C) Uses a centralized management style. D) A and B. Show Answer Correct Answer: C) Uses a centralized management style. 3. At ACB bank, the buying rate is listed as follows:1 USD = 7, 7852 HKD and 1 HKD = 2003, 8 VND. So for the bank, the buying rate of 1 USD is: A) 15, 599. B) 15, 547. C) 16.453. D) 15.762. Show Answer Correct Answer: A) 15, 599. 4. Futures differ from forwards because they are A) Used to hedge portfolios. B) Used to hedge individual securities. C) Used in both financial and foreign exchange markets. D) A standardized contract. Show Answer Correct Answer: D) A standardized contract. 5. If a country's government imposes a tariff on imported goods, that country's current account balance will likely ..... (assuming no retaliation by other governments) A) Increase. B) Decrease. C) Remain unaffected. D) Either B or C is possible. Show Answer Correct Answer: A) Increase. 6. Which of the following is an example of direct foreign investment? A) Exporting to a country. B) Establishing licensing arrangements in a country. C) Purchasing existing companies in a country. D) Investing directly (without brokers) in foreign stocks. Show Answer Correct Answer: C) Purchasing existing companies in a country. 7. What does the International Finance Corporation (IFC) promote? A) Provide loans at low interest rates to poor nations. B) Promote private enterprise within countries. C) Provide temporary funds to member countries. D) Facilitate cooperation among countries with regard to international transactions. Show Answer Correct Answer: B) Promote private enterprise within countries. 8. Negative NIIP A) Country has external debt. B) Country is a net creditor to ROW. Show Answer Correct Answer: A) Country has external debt. 9. Licensing obligates a firm to provide ....., while franchising obligates a firm to provide ..... A) A specialized sales or service strategy; its technology. B) Its technology; a specialized sales or service strategy. C) Its technology; its technology. D) A specialized sales or service strategy; a specialized sales or service strategy. E) Its technology; an initial investment. Show Answer Correct Answer: B) Its technology; a specialized sales or service strategy. 10. The two primary goals of inventory management are to:(1pts) A) Keep inventory at a minimum level to maximize available cash, but keep enough inventory on hand to always satisfy production or customer demand. B) Keep inventory at a maximum level and keep enough inventory on hand to always satisfy production or customer demand. C) Keep inventory at a minimum level to maximize available cash, but keep enough inventory on hand to satisfy production or customer demand most of the time. D) Keep inventory at a maximum level and keep enough inventory on hand to satisfy production or customer demand most of the time. Show Answer Correct Answer: A) Keep inventory at a minimum level to maximize available cash, but keep enough inventory on hand to always satisfy production or customer demand. 11. For the MNC, agency costs are typically: A) Non-existent. B) Larger than agency costs of a small purely domestic firm. C) Smaller than agency costs of a small purely domestic firm. D) The same as agency costs of a small purely domestic firm. Show Answer Correct Answer: B) Larger than agency costs of a small purely domestic firm. 12. Infosys has raised American depository receipts for the purpose of A) Paying off its debts in the United States. B) Reducing its presence in the United States market. C) Acquiring a new technology company in the United States. D) Expanding its investor base in the United States. Show Answer Correct Answer: D) Expanding its investor base in the United States. 13. Which of the following forms of arbitrage needs to consider cross-rates? A) Hedged interest rate arbitrage. B) Trilateral Arbitrage. C) Local Arbitrage. D) Arbitrage rate hedge. Show Answer Correct Answer: B) Trilateral Arbitrage. 14. U9V-7) Which term is defined as a tax on imported goods? A) Embargo. B) Quota. C) Subsidy. D) Tariff. Show Answer Correct Answer: D) Tariff. 15. Suppose that Britain pegs the pound to gold at six pounds per ounce, whereas the exchange rate between pounds and U.S. dollars is $ 5 = £1. What should an ounce of gold be worth in U.S. dollars? A) 29.4. B) 30. C) 0.83. D) 1.2. Show Answer Correct Answer: B) 30. 16. What does the Bank for International Settlements (BIS) facilitate? A) Cooperation among countries with regard to international transactions. B) Extension of loans at low interest rates to poor nations. C) Promotion of free mobility of capital funds across countries. D) Facilitation of governance in governments and corporations of countries with market economics. Show Answer Correct Answer: A) Cooperation among countries with regard to international transactions. 17. U9V-13) What is an exchange rate? A) The rate at which goods are exchanged between two countries. B) How many US dollars you can exchange for RMB at Travelex. C) The price of one nation's currency in terms of another's. D) The price of goods in terms of a foreign currency. Show Answer Correct Answer: C) The price of one nation's currency in terms of another's. 18. Parties who have bought a futures contract and thereby agreed to ..... (take delivery of) the bonds are said to have taken a ..... position. A) Sell; short. B) Buy; short. C) Sell; long. D) Buy; long. Show Answer Correct Answer: D) Buy; long. 19. U9V-11) Government payments to exporters, this payment helps reduce an exporter's cost of production. A) Standards. B) Subsidies. C) Surplus. D) Quota. Show Answer Correct Answer: B) Subsidies. 20. A sponsored American depository receipt (ADR) is: A) An ADR is a negotiable certificate issued by a U.S. bank representing a specified number of shares in a foreign stock traded on a U.S. exchange. B) A type of tax deduction for American investors. C) A type of insurance for American stocks. D) A type of currency used in American banks. Show Answer Correct Answer: A) An ADR is a negotiable certificate issued by a U.S. bank representing a specified number of shares in a foreign stock traded on a U.S. exchange. ← 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