International Corporate Finance

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Question 1

Free

Multiple Choice

Which of these seeks to reduce, or even eliminate, trade restrictions and tariffs to ease trade between countries?

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Commerce bureaus

Tariff agreements

Trade agreements

Economic analysts

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Question 2

Free

Multiple Choice

Which of these is the trade agreement between South American countries to create their own free trade zone?

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South American Union

South American Free Trade Agreement (SAFTA)

South American Monetary Fund (SAMF)

Mercosur

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Question 3

Free

Multiple Choice

Which of these is a political and economic union of 27 European countries?

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European Union

European Free Trade Agreement (EFTA)

European Monetary Fund (EMF)

Mercosur

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Question 4

Free

Multiple Choice

Which of these is an international organization that deals with international trade rules and helps settle disputes between its member governments?

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World Trade Union

World Free Trade Agreement

International Monetary Fund

World Trade Organization

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Question 5

Free

Multiple Choice

Which of these is an organization of 185 countries that monitors currency exchange, examines financial stability, and watches the global financial system?

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World Monetary Union

World Monetary Organization

International Monetary Fund

International Monetary Union

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Question 6

Multiple Choice

Which of these is a company that operates production and/or sales facilities in multiple countries?

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World trade corporation

Multinational corporation

Free trade corporation

Managed-floating corporation

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Question 7

Multiple Choice

Which of these is defined as long-term investment in capital in a business operation located in an economy other than that in which the company is based?

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Managed-floating corporation

Multinational investment

Multinational corporation

Foreign direct investment

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Question 8

Multiple Choice

Which of these is defined as the price of one currency in terms of another?

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Exchange rate

Spot transaction

Indirect exchange quote

Direct exchange quote

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Question 9

Multiple Choice

Which of these is defined as exchanging one currency for another today?

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Exchange rate

Spot transaction

Indirect quote

Direct quote

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Question 10

Multiple Choice

Which of these is defined as the amount of foreign currency it takes to buy one unit of domestic currency?

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Exchange rate

Spot transaction

Indirect quote

Direct quote

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Question 11

Multiple Choice

Which of these is defined as the amount of domestic currency it takes to buy one unit of foreign currency?

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Exchange rate

Spot transaction

Indirect quote

Direct quote

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Question 12

Multiple Choice

Which of these is defined as the currency exchange rate between two foreign currencies, each of which is not the currency of the domestic country?

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Exchange rates

Spot rates

Indirect rates

Cross rates

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Question 13

Multiple Choice

Which of these is defined as the practice of simultaneously purchasing and selling an asset in different forms or markets to take advantage of an imbalance in price?

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Arbitrage

Spot transaction

Indirect quote

Cross quote

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Question 14

Multiple Choice

Which of these is defined as the possibility that the spot currency exchange rate will change and reduce the value of foreign assets and cash flows?

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Foreign rate risk

Exchange rate risk

Spot rate risk

Value rate risk

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Question 15

Multiple Choice

Which of these is defined as an exchange rate regime where the currency is completely determined by the foreign-exchange market through supply and demand?

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Foreign market regime

Freely floating regime

Currency market regime

Managed-floating regime

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Question 16

Multiple Choice

Which of these is defined as an exchange rate regime where the country's central bank allows its currency price to float freely between an upper and lower bound and may buy and sell large amounts of it in order to provide price support or resistance?

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Foreign market regime

Freely floating regime

Currency market regime

Managed-floating regime

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Question 17

Multiple Choice

Which of these is defined as an exchange rate regime where a currency's price is fixed to the value of another currency or to a basket of other currencies?

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Fixed peg arrangement

Freely floating regime

Currency market regime

Managed-floating regime

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Question 18

Multiple Choice

Which of these is defined as a contractual agreement that states the exchange rate to be used at a future exchange date?

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Fixed peg rate

Forward exchange rate

Managed exchange rate

Future strategy rate

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Question 19

Multiple Choice

Which of the following is NOT an example of how a company could hedge to reduce currency risk?

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Buying futures contracts

Buying options

Currency swaps

Fixed peg arrangements

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Question 20

Multiple Choice

Which of the following is a theory that the difference in interest rates between two countries is equal to the difference between the forward currency exchange rate and the spot exchange rate?

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Purchasing power parity

Interest rate parity

Law of one price

Currency swap parity

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