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Globalization and questions on Global Finance

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1. which statement best explains the consequences of globalization?
a. balance of payments
b. creation of supply and demand
c. increase in market share
d. under the counter trade
e. long term cash management

2. Which of the following best exemplifies the relationship among the international flow of goods, services, and capital, the balance of payments and domestic economic behavior?
a. interest rate, depreciation rate, and cross rate
b. inflation, tax rate, and deflation rate
c. exchange rate, parity condition and country risk
d. interest rate, currency rate, devaluation
e. interest rate, inflation, and exchange rate

3. the following are all strategies to avoid expropriation except:
a. borrow locally
hire local labor
buy insurance

4. if you are an entrepreneur and wish to open a restaurant in mexico. which of the following would be the best source of capital to fund your venture?
small business administration
your credit union
your bank
latin american capital markets
international monetary fund

5. International company, an American company, wants to borrow money for is expansion in Australia. Recommended an optimal financing strategy for International company in order to minimize currency volatility in repaying the loan:
borrow locally
borrow in the Euro market
borrow in America
Borrow in Latin America
Borrow in Asia

6. Parity conditions economic relationship that should apply to
spot rates
inflation rates
interest rates
all of the above

7. Which of the following is an international finance risk factor?
balance of payments
interest rate parity
call option

8. Which statement best explain the drivers of globalization?
joint ventruers
access to raw materials
the war on terror
trade barriers
licensing agreements

9. Which of the following short term cash management technique can be used to make a foreign investment decision:
cash budgeting
lock box

10. Your foreign investment strategy is to maximize shareholder's wealth. A terrorist attack has just occured in the host country. which of the following would you use to modify your investment strategy?
counter trade
wholly owned subsidiary

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Solution Summary

A sentence support each selection.

See Also This Related BrainMass Solution

Global Finance Currency Questions

1. How does the existence of foreign exchange and/or derivative markets impact an organization's globalization strategies?
How does the non-existence of foreign exchange and/or derivative markets impact an organization's globalization strategies?
How do catastrophic world events affect the foreign exchange and derivative markets?

2. What are international parity conditions? What are some examples of international parity conditions? How do these conditions impact global business?

3. What is currency? How do fluctuating currency rates affect global trading? Provide a real-world example in your response.

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