International Finance.doc

International Financial Management, 2e (Bekaert / Hodrick) Chapter 1 Globalization and the Multinational Corporation 1.1 Multiple Choice Easy 1) Which of the following was created in an effort to promote free trade? A) World Trade Organization B) the Sarbanes-Oxley Act C) multilateral development banks D) the Organization for Economic Cooperation and Development Answer: A 2) Which one of the following is an investment from which the payoff over time is derived from the performance of an underlying asset? A) a common stock certificate B) a derivative security C) a corporate bond D) a mortgage bond Answer: B 3) What is the name for the shifting of non-strategic functions to specialist firms to reduce costs? A) outsourcing B) multinational company C) globalization D) transnational corporations Answer: A 4) According to the United Nations Conference on Trade and Development, what percentage of Chinas GDP in 2009 was attributed to the trade sector? A) 70% B) 60% C) 65% D) 50% Answer: D 5) The World Banks main goal is to ensure the stability of A) the international monetary and financial system only in developed countries. B) the international monetary and financial system in developing countries. C) the international monetary and financial system in both developed and developing countries. D) only the financial system in both developed and developing countries. Answer: C 6) Between 2007 and 2010 the world witnessed a full-blown financial crisis that was attributed to A) subprime mortgage repricing. B) quantitative easing by the Fed. C) foreign exchange imbalances. D) banking failures. Answer: A 7) Which of the following is NOT a protectionist tendency? A) tariffs B) comparative advantage C) non-tariff barriers D) quotas Answer: B 8) This organization was established in 1995 to replace the GATT Treaty. A) ASEAN B) EEC C) NAFTA D) WTO Answer: D 9) It is the right given to firms to produce specific products in exchange for a ________ fee. A) J