MCQOPTIONS
Saved Bookmarks
MCQOPTIONS
This section includes 8815 Mcqs, each offering curated multiple-choice questions to sharpen your Current Affairs knowledge and support exam preparation. Choose a topic below to get started.
| 2251. |
The term “Open covenants of peace, openly arrived at” is associated with |
| A. | League of Nations |
| B. | UN |
| C. | UNESCO |
| D. | ILO |
| Answer» B. UN | |
| 2252. |
The treaty of Utrecth was signed in the year.. |
| A. | 1648 |
| B. | 1713 |
| C. | 1888 |
| D. | 1216 |
| Answer» C. 1888 | |
| 2253. |
WHO declared that they have completely eradicated the following diseasefrom the world |
| A. | Small pox |
| B. | Polio |
| C. | AIDS |
| D. | TB |
| Answer» B. Polio | |
| 2254. |
WIPO stands for |
| A. | World Institute for Peace and Organization |
| B. | World Intellectual Property Organization |
| C. | World Institute for Police Organization |
| D. | World Institute for International Protocol Office |
| Answer» C. World Institute for Police Organization | |
| 2255. |
The League of Nations was established as a part of |
| A. | Hague Conventions |
| B. | Treaty Versailles |
| C. | Treaty of westaphalia |
| D. | Philadelphia conventions |
| Answer» B. Treaty Versailles | |
| 2256. |
Uniting for peace resolution was approved in the year |
| A. | 1919 |
| B. | 1950 |
| C. | 1945 |
| D. | 1963 |
| Answer» C. 1945 | |
| 2257. |
The UN secretary General is appointed by |
| A. | Security Council |
| B. | General assembly |
| C. | General assembly with Security Council |
| D. | The Big Five |
| Answer» D. The Big Five | |
| 2258. |
A primary result of the Bretton Woods Agreement was: |
| A. | the establishment of the European Monetary System (EMS). |
| B. | establishing specific rules for when tariffs and quotas could be imposed by governments. |
| C. | establishing that exchange rates of most major currencies were to be allowed to fluctuate 1% above or below their initially set values. |
| D. | establishing that exchange rates of most major currencies were to be allowed to fluctuate freely without boundaries (although the central banks did have the right to intervene when necessary). |
| Answer» D. establishing that exchange rates of most major currencies were to be allowed to fluctuate freely without boundaries (although the central banks did have the right to intervene when necessary). | |
| 2259. |
The most widely used monetary policy tool among these is. |
| A. | Open market operations |
| B. | Issuing of notes |
| C. | Close market operations |
| D. | Discount rate |
| Answer» B. Issuing of notes | |
| 2260. |
Under a fixed exchange standard, if the domestic demand for foreign exchange increases |
| A. | the central monetary authority must meet the demand out of its reserves. |
| B. | the central monetary authority must increase the supply of domestic money. |
| C. | the fixed exchange standard will breakdown. |
| D. | inflation will increase. |
| Answer» C. the fixed exchange standard will breakdown. | |
| 2261. |
Assume that Patton Co. will receive 100,000 New Zealand dollars (NZ$) in 180 days. Today's spot rate of the NZ$ is £0.35, and the 180-day forward rate is £0.36. A call option on NZ$ exists, with an exercise price of £0.37, a premium of £0.01, and a 180- day expiration date. A put option on NZ$ exists with an exercise price of £0.36, a premium of £0.01, and a 180-day expiration date. Patton Co. has developed the following probability distribution for the spot rate in 180 days: Possible Spot Rate in 90 Days Probability £0.30 10% £0.35 60% £0.40 30% The probability that the forward hedge will result in more U.S. dollars received than the options hedge is _______ (deduct the amount paid for the premium when estimating the U.S. dollars received on the options hedge). |
| A. | 10% |
| B. | 30% |
| C. | 40% |
| D. | 70% |
| Answer» E. | |
| 2262. |
Which one of the following is a correct statement regarding a firm's weighted average cost of capital (WACC)? |
| A. | An increase in the market risk premium will tend to decrease a firm's WACC. |
| B. | A reduction in the risk level of a firm will tend to increase the firm's WACC. |
| C. | A 5 percent increase in a firm's debt-equity ratio will tend to increase the firm's WACC. |
| D. | The WACC can be used as the required return for all new projects with similar risk to that of the existing firm. |
| Answer» E. | |
| 2263. |
If a particular currency is consistently declining substantially over time, then a market- based forecast will usually have: |
| A. | underestimated the future exchange rates over time. |
| B. | overestimated the future exchange rates over time. |
| C. | forecasted future exchange rates accurately. |
| D. | forecasted future exchange rates inaccurately but without any bias toward consistent underestimating or overestimating. |
| Answer» C. forecasted future exchange rates accurately. | |
| 2264. |
The currency of country X is pegged to the currency of country Y. Assume that county Y's currency depreciates against the currency of country Z. It is likely that country X will export _______ to country Z and import _______ from country Z. |
| A. | more; more |
| B. | less; less |
| C. | more; less |
| D. | less; more |
| Answer» C. more; less | |
| 2265. |
If a foreign country follows the "Purchase Homemade Products" philosophy, the least effective strategy would be for a UK firm to: |
| A. | use a licensing arrangement with a local firm in that country. |
| B. | enter into a joint venture in that country. |
| C. | develop a subsidiary (under the US name) that manufactures and sells products in that country. |
| D. | develop a subsidiary (under the US name) that manufactures products in that |
| Answer» D. develop a subsidiary (under the US name) that manufactures products in that | |
| 2266. |
If U.S. inflation suddenly increased while European inflation stayed the same, there wouldbe: |
| A. | an increased U.S. demand for Euros and an increased supply of Euros for sale. |
| B. | a decreased U.S. demand for Euros and an increased supply of Euros for sale. |
| C. | a decreased U.S. demand for Euros and a decreased supply of Euros for sale. |
| D. | an increased U.S. demand for Euros and a decreased supply of Euros for sale. |
| Answer» E. | |
| 2267. |
Agents are appointed by? |
| A. | Manufacturer |
| B. | Wholesaler |
| C. | Retailer |
| D. | Principal |
| Answer» E. | |
| 2268. |
A _______ involves an exchange of currencies between two parties, with a promise to re- exchange currencies at a specified exchange rate and future date. |
| A. | long-term forward contract |
| B. | parallel loan |
| C. | currency swap |
| D. | money market hedge |
| Answer» D. money market hedge | |
| 2269. |
Other things being equal, a foreign subsidiary in China would more likely be divested by theU.S. parent if new information caused the parent to suddenly anticipate that: |
| A. | the Chinese yuan would depreciate in the future. |
| B. | the Chinese yuan would appreciate in the future. |
| C. | the Chinese yuan would remain somewhat stable in the future. |
| D. | none of the above; the value of the Chinese yuan has no impact on the feasibility of a divestiture. |
| Answer» B. the Chinese yuan would appreciate in the future. | |
| 2270. |
Assume the bid rate of a Singapore dollar is £0.20 while the ask rate is £0.21 at Bank X. Assume the bid rate of a Singapore dollar is £0.22 while the ask rate is £0.23 at Bank Z. Given this information, what would be your gain if you use £1,000,000 and execute locational arbitrage? That is, how much will you end up with over and above the £1,000,000 you started with? |
| A. | £11,764. |
| B. | £47,619. |
| C. | £36,585. |
| D. | £48,710. |
| Answer» E. | |
| 2271. |
The World Bank's Multilateral Investment Guarantee Agency (MIGA): |
| A. | offers various forms of export insurance. |
| B. | offers various forms of import insurance. |
| C. | offers various forms of exchange rate risk insurance. |
| D. | provides loans to developing countries. |
| Answer» B. offers various forms of import insurance. | |
| 2272. |
The market value of a share is responsible for. |
| A. | The investment market |
| B. | The government |
| C. | Shareholders |
| D. | The respective companies |
| Answer» B. The government | |
| 2273. |
Insurance purchased to cover the risk of expropriation __________, and will typicallycover __________. |
| A. | will be the same for all firms; only a portion of the firm's total exposure. |
| B. | will be the same for all firms; all of the firm's total exposure. |
| C. | will be dependent on the firm's risk; all of the firm's total exposure. |
| D. | will be dependent on the firm's risk; only a portion of the firm's total exposure. |
| Answer» E. | |
| 2274. |
The checklist approach: |
| A. | requires several inspections of the country being evaluated. |
| B. | requires the use of discriminant analysis to assess country risk. |
| C. | requires ratings and weights to be assigned to all factors relevant in assessing country risk. |
| D. | involves the collection of independent opinions on country risk. |
| Answer» D. involves the collection of independent opinions on country risk. | |
| 2275. |
Which of the following institutions is the most important participant in foreign currency markets? |
| A. | A retail customer |
| B. | A commercial bank |
| C. | A foreign exchange broker |
| D. | A central bank |
| Answer» E. | |
| 2276. |
Which of the following is a reason to consider international business? |
| A. | economies of scale. |
| B. | exploit monopolistic advantages. |
| C. | diversification. |
| D. | all of the above |
| Answer» E. | |
| 2277. |
Suppose the exchange rates between the United States and Euro Area are in long-run equilibrium as defined by the idea of purchasing power parity. If the law of one price holds perfectly, then differences between U.S. and Euro Area rates of inflation would |
| A. | have no effect on nominal exchange rates. |
| B. | be completely offset by changes in the real exchange rate. |
| C. | be completely offset by changes in the nominal exchange rate. |
| D. | violate the conditions for the law of one price. |
| Answer» E. | |
| 2278. |
The value of the Australian dollar (A$) today is £0.41. Yesterday, the value of the Australian dollar was £0.38. The Australian dollar by _______%. |
| A. | depreciated; 7.90 |
| B. | appreciated; 7.90 |
| C. | depreciated; 7.30 |
| D. | appreciated; 7.30 |
| Answer» D. appreciated; 7.30 | |
| 2279. |
As opposed to transaction exposure, managing economic exposure involves developing a________ solution. |
| A. | short-term |
| B. | immediate |
| C. | long-term |
| D. | none of the above |
| Answer» D. none of the above | |
| 2280. |
What is the person known as who draws a bill of exchange |
| A. | Drawer |
| B. | Payee |
| C. | Drawee |
| D. | None of the above |
| Answer» B. Payee | |
| 2281. |
A forward currency transaction: |
| A. | Sets the future date when delivery of a currency must be made at an unknown spot exchange rate |
| B. | Calls for exchange in the future of currencies at an agreed rate of exchange |
| C. | Means that delivery and payment must be made within one business day (USA/Canada) or two business days after the transaction date |
| D. | Is always at a premium over the spot rate |
| Answer» C. Means that delivery and payment must be made within one business day (USA/Canada) or two business days after the transaction date | |
| 2282. |
The Bretton Woods exchange rate system was an example of a |
| A. | target zone. |
| Answer» E. | |
| 2283. |
Overshooting models of the exchange rate are an attempt to explain: |
| A. | why purchasing power parity plays no role in determining the value of a currency. |
| B. | why exchange rates are so volatile. |
| C. | why the foreign exchange market is never in equilibrium. |
| D. | why forward rates of exchange are not good predictors of future spot rates of exchange. |
| Answer» C. why the foreign exchange market is never in equilibrium. | |
| 2284. |
Due to _______, market forces should realign the relationship between the interest rate differential of two currencies and the forward premium (or discount) on the forward exchange rate between the two currencies. |
| A. | forward realignment arbitrage |
| B. | covered interest arbitrage |
| C. | triangular arbitrage |
| D. | locational arbitrage |
| Answer» D. locational arbitrage | |
| 2285. |
Which of the following is not a factor that favorably affects an MNC's cost of capital, according to your text? |
| A. | exchange rate risk. |
| B. | size. |
| C. | access to international capital markets. |
| D. | international diversification. |
| Answer» B. size. | |
| 2286. |
The equilibrium exchange rate of pounds is $1.70. At an exchange rate of $1.72 per pound: |
| A. | U.S. demand for pounds would exceed the supply of pounds for sale and there would be a shortage of pounds in the foreign exchange market. |
| B. | U.S. demand for pounds would be less than the supply of pounds for sale and there would be a shortage of pounds in the foreign exchange market. |
| C. | U.S. demand for pounds would exceed the supply of pounds for sale and there would be a surplus of pounds in the foreign exchange market. |
| D. | U.S. demand for pounds would be less than the supply of pounds for sale and there would be a surplus of pounds in the foreign exchange market. |
| Answer» E. | |
| 2287. |
Assume that a bank's bid rate on Swiss francs is £0.25 and its ask rate is £0.26. Itsbid-ask percentage spread is: |
| A. | 4.00%. |
| B. | about 3.85%. |
| C. | 4.26%. |
| D. | about 4.17%. |
| Answer» D. about 4.17%. | |
| 2288. |
If portable disk players made in China are imported into the United States, the Chinese manufacturer is paid with |
| A. | international monetary credits. |
| B. | dollars. |
| C. | yuan, the Chinese currency. |
| D. | euros, or any other third currency. |
| Answer» D. euros, or any other third currency. | |
| 2289. |
Which of the following are examples of currency controls? |
| A. | import restrictions. |
| B. | prohibition of remittance of funds. |
| C. | ceilings on granting credit to foreign firms. |
| D. | all of the above |
| Answer» E. | |
| 2290. |
The rate of return on its existing assets that a firm must earn to maintain the current value ofthe firm's stock is called the: |
| A. | return on equity. |
| B. | internal rate of return. |
| C. | weighted average cost of capital. |
| D. | weighted average cost of equity. |
| Answer» D. weighted average cost of equity. | |
| 2291. |
In general, MNCs probably prefer to use ____________ foreign debt when their foreign subsidiaries are subject to potentially ___________ local currencies. |
| A. | more; strong |
| B. | more; weak |
| C. | less; strong |
| D. | less; weak |
| Answer» C. less; strong | |
| 2292. |
The impact of blocked funds on the net present value of a foreign project will be greater if interest rates are _______ in the host country and there are _______ investment opportunities in the host country. |
| A. | very high; limited |
| B. | very low; limited |
| C. | very low; numerous |
| D. | very high; numerous |
| Answer» C. very low; numerous | |
| 2293. |
A banker's acceptance is a draft drawn on and accepted by a(n) __________. |
| A. | bank |
| B. | importer |
| C. | exporter |
| D. | none of the above |
| Answer» B. importer | |
| 2294. |
Under a fixed exchange rate system: |
| A. | central bank intervention in the foreign exchange market is often necessary; |
| B. | central bank intervention in the foreign exchange market is not necessary since rates do not move; |
| C. | central bank intervention in the foreign exchange market is not permitt |
| Answer» B. central bank intervention in the foreign exchange market is not necessary since rates do not move; | |
| 2295. |
The maximum one-day loss computed for the value-at-risk (VAR) method, does not depend on: |
| A. | the expected percentage change in the currency for the next day. |
| B. | the standard deviation of the daily percentage changes in the currency over a previous period. |
| C. | the current level of interest rates. |
| D. | the confidence level used. |
| Answer» D. the confidence level used. | |
| 2296. |
A previously undertaken project in a foreign country may no longer be feasible because: |
| A. | the MNC is unable to raise sufficient funds in order to undertake the project. |
| B. | the MNC's cost of capital has decreased. |
| C. | the host government has increased its tax rates substantially. |
| D. | exchange rate projections changed from a depreciation to an appreciation of the foreign currency. |
| Answer» D. exchange rate projections changed from a depreciation to an appreciation of the foreign currency. | |
| 2297. |
If more European and Japanese firms want to build factories and expand their offshore investments in the United States, the supply of U.S. dollars on foreign exchange markets will increase as a result of this investment activity. |
| A. | True |
| B. | False |
| C. | all |
| D. | none |
| Answer» B. False | |
| 2298. |
The international Fisher effect suggests that should pound interest rates exceed US dollarinterest rates: |
| A. | the pound’s value will remain constant; |
| B. | the pound will be at a discount on the dollar; |
| C. | UK inflation rate will decrease. |
| D. | the pound will depreciate against the dollar; |
| Answer» E. | |
| 2299. |
An international project's NPV is _________ related to the size of the initialinvestment and _________ related to the project's required rate of return. |
| A. | positively; positively |
| B. | positive; negatively |
| C. | negatively; positively |
| D. | negatively; negatively |
| Answer» E. | |
| 2300. |
Which of the following is a legitimate reason for international investment? |
| A. | Dividends from a foreign subsidiary are tax exempt in the United States. |
| B. | Most governments do not tax foreign corporations. |
| C. | There are possible benefits from international diversification. |
| D. | International investments have less political risk than domestic investments. |
| Answer» D. International investments have less political risk than domestic investments. | |