MCQ - Seminar One

Question 1

Financial globalisation has NOT resulted in:

A) an increase in quantity and speed in the flow of capital across the world
B) uniform ways of ownership, control, and governance across the world
C) capital markets less open and a decrease in the availability of capital for many organisations
D) continuing imbalances of balance of pavements

Answer 1

B) uniform ways of ownership, control, and governance across the world

Question 2

Financial globalisation has NOT resulted in:

A) capital markets more open and an increase in the availability of capital for many organisations
B) continuing imbalances of balance of payments
C) and increase in quantity and speed in the flow of capital across the world
D) an increase int eh flow of capital into and out of industrialised markets

Answer 2

A) capital markets more open and an increase in the availability of capital for many organisations

Question 3

The institutions of global finance are:

A) central banks
B) investment banks
C) commercial banks
D) all of the above are institutions of global finance

Answer 3

D) all of the above are institutions of global finance

Question 4

A major cost avoided in the Eurocurrency markets is the payment of deposit insurance fees, such as:

A) IMF
B) Office of the Comptroller of the Currency - OCC
C) Federal Deposit Insurance Corporation - FDIC
D) World Bank

Answer 4

C) Federal Deposit Insurance Corporation - FDIC

Question 5

The reference rate of interest int he Eurocurrency market is the:

A) treasury rate
B) primary rate
C) federal funds rate
D) London Interbank Offered Rate

Answer 5

D) London Interbank Offered Rate

Question 6

Interest spreads in the Eurocurrency markets are small for many reasons EXECPT:

A) the Eurocurrency is a wholesale market
B) Eurocurrency loans are secured loans
C) Eurocurrency deposits and loans are made in amounts of $500,000 or more on an unsecured basis
D) borrowers are usually large corporations or government entities

Answer 6

B) Eurocurrency loans are secured loans

Question 7

The theory that suggests specialisation by country can increase worldwide production is:

A) the theory of working capital management
B) the international Fisher effect
C) the theory of comparative advantage
D) the theory of foreign direct investment

Answer 7

C) the theory of comparative advantage

Question 8

Which of the following is NOT a reason governments interfere with comparative advantage:

A) national self-sufficiency in defense-related industries
B) governments attempt to achieve full employment
C) governments promote economic development
D) all are reasons governments interfere with comparative advantage

Answer 8

D) all are reasons governments interfere with comparative advantage

Question 9

Which of the following factors of production DO NOT flow freely between countries:

A) financial capital
B) (non-military) technology
C) raw materials
D) All of the above factors of production flow freely among countries

Answer 9

C) raw materials

Question 10

Of the following, which would NOT be considered a way that government interferes with comparative advantage:

A) quotas
B) managerial skills
C) tariffs
D) other non-tariff restrictions

Answer 10

B) managerial skills

Question 11

Which of the following domestic financial instruments have NOT been modified for use in international financial management:

A) letters of credit
B) interest rate and currency swaps
C) currency options and futures
D) all of the above are domestic financial instruments that have also been modified for use in international financial markets

Answer 11

D) all of the above are domestic financial instruments that have also been modifies for use in international financial markets