Fin 403 final exam
Post on 29-Jul-2015
1. FIN 403 Final Exam PLEASE DOWNLOAD THE ANSWERS HERE!!!1. Which of the following is an international finance risk factor? a) Political b)Temperature c) Balance of payment2. What is most likely the consequence of globalization? a) Prosperous worldeconomy b) More trade opportunities c) Decrease in local job opportunities3. What is World Banks objective? a) Promote stability in exchange rates b) Makeloans to countries in order to enhance economic development c) Promote privateenterprise within countries4. 1 year go, 1 Hong Kong Dollar. Currently 1 Hong Kong Dollar. Therefore, USDollar has a) Appreciated b) Depreciated c) No way to tell.5. Which of the following BEST exemplifies the relationship among the internationalflow of goods, services, and capital, the balance of payments, and domesticeconomic behavior? a) Interest rate, depreciation rate, and cross rate b) Inflationrate, tax rate, and deflation rate c) Interest rate, inflation, and exchange rate6. Appreciation of US Dollar will encourage a) Importation b) Exportation c) nochange in America.7. A weak dollar places a) downward b) upward pressure on U.S. inflation, which inturn places further downward pressure on the value of the dollar.8. Forward currency contracts are created in organized exchanges like the NYSE orthe Chicago Mercantile Exchange. a) True b) False9. Which of the following is a function of the derivatives market? a) Selling b)Hedging c) Fisher effect d) Increased cost of capital10. Which of the following derivatives could be used in speculation and hedging inthe foreign market? a) Money market b) Capital market c) Option d) Internet11. Which of the following is NOT an international risk consideration? A) Terrorismb) Poverty c) Historical exchange rate d) Cross-cultural risks12. Select the characteristic of Monopoly a) Investment in Research & Developmentb) Buyers can shop around c) Pricing is determined through supply and demand. 2. 13. Which would be the most favorable to foreign investment for a U.S.organization? a) Canada-interest rate 14%, inflation 10% b) Japan-interest rate 15%,inflation 16% c) Iraq-interest rate 25%, inflation 20% d) Australia-interest rate 13%,inflation 18%14. a) High national income b) Strong local currency c) Political situation tends NOTto result in a strong demand for imports and a current account deficit.15. The difference between Future Contracts and Call options is that futurecontracts require an obligation, which option does not. a) True b) False16. What type of risk exposure measures consolidated financial statements toexchange rate movements? a) Transaction exposure b) Economic Exposure c)Translation Exposure17. Currently, 1 US Dollar. Therefore, 1,000 ,490 US Dollar. 2 years ago, 1 US Dollar.How much Euro would 1,490 US Dollar convert to back 2 years ago? a) 1,000 Euro b)1,173 Euro c) 1,500 Euro18. Select the factors used by MNCs to measure a countrys financial risk. a) Interestrate b) Exchange rate c) Inflation rates d) all the above19. What instrument issued by a bank on behalf of the importer (buyer) promising topay the exporter (beneficiary) upon presentation of shipping documents incompliance with the terms stipulated. a) Draft b) Letter of Credit c) Open account20. Decisions to invest in a foreign country must weight the potential benefitsagainst costs and additional risk. Which one is least likely to be considered as benefitfrom Direct Foreign Investment? a) Use foreign technology b) Attract new sourcesof demand c) Use foreign raw materials d) None of aboveFIN 403 Final Exam PLEASE DOWNLOAD THE ANSWERS HERE!!!