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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.