Recent Question

An increase in the current account deficit 1. Recently, the UK experienced an annual balance of trade representing a __________. a. large surplus (exceeding £100 billion) c. level of zero b. small surplus d. deficit 2. An increase in the current account deficit will place _______ pressure on the home currency value, other things equal. a. upward b. downward c. no d. upward or downward (depending on ...

Other / Other 22 Apr 2016

The international credit market primarily concentrates 1. A forward contract can be used to lock in the __________ of a specified currency for a future point in time. A) purchase price B) sale price C) A or B D) none of the above 2. The forward market: A) for euros is very illiquid. B) for Eastern European countries is very liquid. C) does not exist for some currencies. D) none of the above 3. The Basel II accord ...

Other / Other 22 Apr 2016

The valuation of an MNC is reduced if the required return on its investments 1. The valuation of an MNC is reduced if the required return on its investments in foreign countries is reduced. A) True. B) False. 2. Which of the following is not mentioned in the text as an additional risk resulting from international business? A) Exchange rate fluctuations. B) Political risk. C) Interest rate risk. D) Exposure to foreign economies. ...

Other / Other 22 Apr 2016

A high home inflation rate relative to other countries 1. Direct foreign investment by UK.-based MNCs occurs primarily in the Bahamas and Brazil. a. true. B．false. 2. A tariff is a maximum limit on imports. a. true. b. false. 3. A high home inflation rate relative to other countries would _______ the home country's current account balance, other things equal. A high growth in the home income level relative to other co ...

Other / Other 22 Apr 2016

Forward markets for currencies of developing countries 1. According to the text, the forward rate is commonly used for: A) hedging. B) Eurocurrency transactions. C) Eurocredit transactions. D) Eurobond transactions. 2. If a U.S. firm desires to avoid the risk from exchange rate fluctuations, and it is receiving 100,000 in 90 days, it could: A) obtain a 90-day forward purchase contract on euros. B) obtain a 90-day forward ...

Other / Other 22 Apr 2016

The value of the Peruvian Sol in Canadian dollars 1. Assume the Canadian dollar is equal to £0.51 and the Peruvian Sol is equal to £0.16. The value of the Peruvian Sol in Canadian dollars is: a. about .3621 Canadian dollars. c. about 2.36 Canadian dollars. b. about .3137 Canadian dollars. d. about 2.51 Canadian dollars. £0.16/£0.51 = .3137 2. _______ is not a bank characteristic important to ...

Other / Other 22 Apr 2016

The demand for U.S. exports tends to increase 1. As a result of the European Union, restrictions on exports between _______ were reduced or eliminated. A) member countries and the U.S. B) member countries C) member countries and European non-members D) none of the above 2. Over time, international trade (exports plus imports) as a percentage of GDP has: A) increased for most major countries. B) decreased for most major coun ...

Other / Other 22 Apr 2016

The Single European Act of 1987 was primarily intended 1. If a U.S.-based MNC focused completely on importing, then its valuation would likely be adversely affected if most currencies were expected to appreciate against the dollar over time. A) True. B) False. 2. The acquisition of a foreign subsidiary is commonly considered by MNCs because the cost is less expensive than establishing a new subsidiary of the same size. A) True. B) ...

Other / Other 22 Apr 2016

Changes in country ownership of long-term and short-term assets 1. A General Agreement on Tariffs and Trade (GATT) accord in 1993 called for: a. increased trade restrictions outside of North America. b. lower trade restrictions around the world. c. uniform environmental standards around the world. d. uniform worker health laws. 2. ______________ is (are) income received by investors on foreign investments in financial assets (secu ...

Other / Other 22 Apr 2016

"Dumping" is used in the text to represent 1. "Dumping" is used in the text to represent the: A) exporting of goods that do not meet quality standards. B) sales of junk bonds to foreign countries. C) removal of foreign subsidiaries by the host government. D) exporting of goods at prices below cost. 2. Assume that a bank's bid rate on Japanese yen is $.0041 and its ask rate is $.0043. Its bid-ask percentage spread is: A) a ...

Other / Other 22 Apr 2016