Reading 13: introduction to geopolitics

Question 1

A state actor that is generally cooperative with other countries and primarily nationalist in pursuing its objectives is most accurately said to exhibit:
autarky.
hegemony.
bilateralism.

Answer 1

Bilateralism is characterized by nationalism (as contrasted with globalization) and cooperation. Both autarky and hegemony are characterized by non-cooperation. (LOS 13.a, 13.b)

Question 2

Which of the following tools of geopolitics is best described as a non-cooperative economic tool?
Voluntary export restraints.
Regional free trade agreements.
Restrictions on conversion of currencies.

Answer 2

Voluntary export restraints (exporting less of a good than the global market demands) are an example of a non-cooperative economic tool. Restrictions on the exchange of currencies are a financial tool. Free trade agreements are a cooperative economic tool. (LOS 13.c)

Question 3

When investing for a long time horizon, a portfolio manager should most likely devote resources to analyzing:
event risks.
thematic risks.
exogenous risks.

Answer 3

Thematic risks are those that have effects over the long term. Event risks and exogenous risks are more likely to have high-velocity impacts on investment values but are less of a focus for investors with longer time horizons. (LOS 13.d)