International Finance
Practice Questions
Course Introduction
International Finance explores the financial management of multinational corporations operating in a global environment. The course examines topics such as foreign exchange markets, exchange rate determination, international monetary systems, balance of payments, and the risks and opportunities associated with cross-border investing and financing. Students will learn about hedging strategies, international capital budgeting, and the impact of global economic policies and events on international financial markets. Real-world case studies and practical applications prepare students to analyze and navigate the complexities of financial decision-making in an increasingly interconnected world.
Recommended Textbook
International Business 8th Edition by Michael Czinkota
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19 Chapters
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Page 2
Chapter 1: The International Business Imperative
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Sample Questions
Q1) The __________ grew mainly through its effective international business policy,which provided for efficient transportation,intensive trade,and an insistence on open markets.
Answer: British Empire
Q2) Although U.S.exports have grown rapidly and successfully over the last few years,many new participants have entered the international market,resulting in a decline in the global market share of exports for the U.S.
A)True
B)False
Answer: True
Q3) Over the past decades and in a world of rapidly growing trade,the market share of __________ in trade has been declining.
A)Central America
B)Eastern Europe
C)Western Europe
D)India
E)China
Answer: C
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Chapter 2: Trade and Investment
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Sample Questions
Q1) Which of the following IS NOT a reason for imposing restrictions on exports?
A)Provide local consumers with greater access
B)The interest of national security
C)Foreign policy purposes
D)Supply surplus
E)Desire to retain capital
Answer: D
Q2) The core mission of the WTO is to:
A)Support international trade and investment
B)Put a stop to globalization
C)Restrict international trade
D)Provide ethics training to policymakers
E)Establish accountability measures in the world trade arena
Answer: A
Q3) The ___________ refers to a migration of professional people from one country to another,usually for the purpose of improving their incomes or living conditions.
Answer: brain drain
Q4) ________ is the supreme right of nations to determine national policies. Answer: National sovereignty
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Chapter 3: The Theory of Trade and Investment
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Sample Questions
Q1) A(n)______________ represents the total productive capabilities of a nation and is used in the formulation of classical and modern trade theory.
A)trade comparison chart
B)trade theory diagram
C)supply and demand curve
D)production possibility frontier
E)advantage matrix
Answer: D
Q2) The United States is known to be more capital abundant than labor abundant. According to ____________ theory,the U.S.should export capital intensive goods in exchange for labor intensive goods.
A)competitive advantage
B)overlapping product ranges
C)product cycle
D)strategic trade
E)factor proportions
Answer: E
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Page 5
Chapter 4: The Balance of Payments
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Sample Questions
Q1) The entire BOP of a single country:
A)Is always in disequilibrium
B)Must balance
C)Must grow from year to year
D)Is never accurate
E)Balances goods but not services
Q2) The United States typically includes all of the following subcategories of its capital account balance EXCEPT:
A)Direct investment
B)Portfolio investment
C)Financial derivatives
D)Goods trade
E)Other investment
Q3) The official reserves account makes sure the balance of payments actually balances.
A)True
B)False
Q4) Describe the fundamentals of balance of payments accounting.
Q5) Describe how the Capital and Financial Account measure international economic transactions of financial assets.
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Chapter 5: Culture
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Sample Questions
Q1) ____________,which stresses loyalty and relationships,has been viewed by many as a code of conduct rather than a religion.
A)Confucianism
B)Islam
C)Buddhism
D)Judaism
E)Hinduism
Q2) Achieving nirvana is important in which dominant world religion?
A)Confucianism
B)Islam
C)Buddhism
D)Judaism
E)Hinduism
Q3) ___________ are shared beliefs or group norms that have been internalized by individuals.
A)Visions
B)Missions
C)Cultural shifts
D)Values
E)Attitudes
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Chapter 6: Politics and Law
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Sample Questions
Q1) Which industry or sector listed below is most likely to have price controls imposed upon its products or services?
A)Airline
B)Gold
C)Grain
D)Hotel
E)Ivory
Q2) The increase in terrorism worldwide highlights the importance of curbing export controls.
A)True
B)False
Q3) The forceful government seizure of a company without compensation for the assets seized is referred to as:
A)Patronism
B)Expropriation
C)Confiscation
D)Domestication
E)Thievery
Q4) Define and describe the different forms of political and economic risk.
Q5) Describe some of the steps that international managers can take to manage risk.
Page 8
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Chapter 7: Financial Markets
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Sample Questions
Q1) _________ exchange refers to contracts that provide for two parties to exchange currencies on a future date at an agreed-upon exchange rate.
A)Spot
B)Forward
C)Cross
D)Market
E)Expedited
Q2) For the most part,adoption of the euro has led to a more destabilized Europe,particularly for the countries that have adopted the single currency.
A)True
B)False
Q3) In 1999,which three currencies dominated,with 70 percent of all global currency trading?
A)U)S.dollar,euro,Japanese yen
B)Euro,Japanese yen,Chinese yuan
C)U)S.dollar,euro,British pound
D)Euro,British pound,Swiss franc
E)U)S.dollar,Indian rupee,Japanese yen
Q4) Describe the purpose and outcome of the Bretton Woods agreement of 1944.
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Chapter 8: Economic Integration, emerging and Developing Markets
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Q1) In restructuring firms in developing economies,authority must be come more centralized so regional programs can be executed.
A)True
B)False
Q2) A(n)_______ is a group of countries that have common foreign policy and security policy that share judicial cooperation.
A)Free-trade area
B)Customs union
C)Common market
D)Economic union
E)Political union
Q3) ________ is the ability to freely move factors of production across borders,as among common market countries.
Q4) The biggest challenge in developing markets is in providing:
A)Domestic goods
B)Luxury goods
C)Commercial services
D)Agricultural goods
E)Essential services
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Chapter 9: Strategic Planning
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Q1) __________ are newer companies with sales between 200 million and 1 billion that are able to serve the world from a handful of manufacturing bases.
Q2) _________ is the use of resources accumulated in one part of the world to fight a competitive battle in another.
Q3) In today's global market,channels of distribution are becoming increasingly global.
A)True
B)False
Q4) Explain the role of the strategic business unit (SBU)in the strategic planning process.
Q5) Variables included in the marketing management bases include those that are related to product,promotion,price,and:
A)Geography
B)Distribution
C)Politics
D)Economics
E)Culture
Q6) Describe the four areas in which decisions have to be made in global program development.
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Page 11
Chapter 10: Corporate Governance and Reform
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Q1) Describe the three fundamental dilemmas that were solved by the creation of the corporation.
Q2) ________ is either first or second in importance across countries in a survey of differing perceptions on corporate responsibility.
A)Executive pay
B)Political influence of companies
C)Ethical advertising
D)Privacy
E)The environment
Q3) The ________is the most common form of business organization which has all of the rights and responsibilities as that of an individual,while possessing limited liability to its owners.
A)corporation
B)firm
C)company
D)conglomerate
E)business
Q4) ________ is the corporate pursuit of long-term profitability and viability while making positive contributions to both society and the environment.
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Chapter 11: Coordination, implementation, and Control
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Q1) The ________ structure requires sensitive,well-trained middle managers who can cope with problems that arise from reporting to two bosses.
A)matrix
B)mixed
C)process
D)area
E)customer
Q2) An organizational structure in which departments are formed on the basis of functional areas such as production,marketing,and finance is called a(n)________ structure.
Q3) A national subsidiary with a distinctive competent,such as product development,is called a(n)________.
Q4) An implementor is a country organization with a distinctive competence,such as product development.
A)True
B)False
Q5) A(n)________ is the typical subsidiary role,which involves implementing strategy that originates with headquarters.
Q6) Define and describe the six basic types of global structures available.
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Chapter 12: Building the Knowledge Base Research Tools
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Sample Questions
Q1) In order to stay close to their customers,proactive firms are developing ________.
A)interviews
B)joint occurrences
C)export complaint systems
D)content analyses
E)Delphi studies
Q2) ABC Company has been developing a series of plausible scenarios that are constructed from trends in the environment.The firm has also been formally reviewing assumptions built into existing plans and positions.ABC Company is using the _______ mechanism to build an information system.
A)environmental scanning
B)Delphi studies
C)scenario building
D)competitive assessment
E)export complaint system
Q3) Research is more important internationally than domestically.
A)True
B)False
Q4) Obtaining ongoing data about a country is called ________.
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Chapter 13: Entry and Expansion
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Q1) XYZ Computer Company has been established as an international from its inception.It uses e-business on a regular basis to reach out to a large number of customers across the globe.XYZ Computer Company is a(n)________ firm.
A)sogoshosha
B)unsolicited
C)direct
D)glocal
E)born global
Q2) A significant reason for ________ is market entry and support of global operations.
A)direct involvement
B)indirect involvement
C)equity participation
D)turnkey operations
E)contract manufacturing
Q3) Market development,risk sharing,and resource sharing are reasons for interfirm cooperation.
A)True
B)False
Q4) ________ allow collaboration among firms,often similar to joint ventures.
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Chapter 14: Marketing
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Q1) ________ is selling goods overseas at a price lower than in the exporter's home market,or at a price below the cost of production,or both.
Q2) ________ are brands that reach the world's mega-markets and are perceived as the same brand by consumers and internal constituents.
A)Universal brands
B)Global brands
C)Worldwide brands
D)International brands
E)Intercontinental brands
Q3) ________ are brands that reach the world's mega-markets and are perceived as the same brand by consumers and internal constituents.
Q4) In 2008,________ remained the largest single media market in the world,with $170 billion in measured media spending.
A)the United States
B)China
C)Japan
D)Russia
E)Germany
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Chapter 15: Services
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Sample Questions
Q1) Availability of full disclosure and information about key market factors such as supply,demand,quality,service,and prices is known as ________.
Q2) Interference in the marketplace by governments is called ________.
Q3) Of the following,which is true of deregulatory efforts?
A)Deregulatory efforts have fostered new competition and new competitive practices.
B)Deregulatory efforts have led to decreased competition and decreased competitive practices.
C)Deregulatory efforts have fostered new competition and decreased competitive practices.
D)Deregulatory efforts have led to decreased competition and increased competitive practices.
E)None of these are true.
Q4) Some firms do not perceive their existing competitive advantage in the international service arena.
A)True B)False
Q5) ________ refers to the ability of a nation to protect its internal values from external threats.
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Chapter 16: Logistics
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Q1) With ________,only the destination customs duty and taxes are paid by the consignees.
Q2) A negotiable bill of lading that can be bought,sold,or traded while the subject goods are still in transit and that is used for letter of credit transactions is referred to as a(n)________.
Q3) ________ is the direct transfer of information technology between computers of trading partners.
A)EDI
B)RORO
C)DDU
D)CPT
E)EXW
Q4) Areas created by a country to attract foreign investors,in which there are no tariffs,substantial tax incentives,and low prices for land and labor are called ________.
A)export declarations
B)ports
C)maquiladoras
D)foreign trade zones
E)special economic zones
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Chapter 17: Financial Management
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Sample Questions
Q1) Diversification is an active rather than a passive solution to the exposure problem.
A)True
B)False
Q2) Exchange rate movements are inherently random.
A)True
B)False
Q3) Germany's income tax rate is relatively ________.
A)high
B)low
C)nonexistent
D)unstable
E)dynamic
Q4) A ________ is an asset or a position whose value moves in the equal but opposite direction of the exposure.
A)net
B)lag
C)lead
D)forward contract
E)hedge
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Chapter 18: Human Resource Management
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Sample Questions
Q1) Preparing schedules of when and how long workers are at the workplace is known as ________.
Q2) Almost ________ percent of managers do not believe that the incentives offered by their companies are suitable for attracting high potentials.
A)10
B)17
C)33
D)45
E)80
Q3) Salary not including special payments such as allowances paid during overseas assignments is referred to as ________.
Q4) One 2008 survey identifies Honolulu,San Francisco,and Chicago among the safest cities in the United States.
A)True
B)False
Q5) Independent decision making is known as ________.
Q6) A management approach in which employees are represented on supervisory boards to facilitate communication and collaboration between management and labor is referred to as ________.
Page 20
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Chapter 19: New Horizons
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Sample Questions
Q1) In the western world,the time from ________ through ________ was characterized by commonality of purpose.
A)1800; 1880
B)1900; 1915
C)1930; 1940
D)1945; 1990
E)2000; 2009
Q2) Export control reform is necessary.
A)True
B)False
Q3) Of the following,which is a consequence of corruption?
A)Reduction of competition
B)Increases in prices
C)Lessening of product quality
D)Deprivation of those who lose out on the goods,services,or funding
E)All of the above
Q4) ________ refers to mechanisms used to influence and alter trade relationships.
Q5) The interaction of factors in nature and society which determine the longevity and continuity of an approach is called ________.
Page 21
Q6) Total accumulated negative net investment of a nation is called ________.
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