- Which of the following derivatives could be used in speculation and hedging in the foreign market?
a- Forward market
d- Money market
e- Capital market
2.Of the following, which would be most favorable to foreign investment for a US organization?
a- Canada- interest rate 14%, inflation rate is 10%.
b- Japan- interest rate is 15%, inflation rate is 16%
c- Iraq- interest rate is 25%, inflation rate is 20%
d- Ghana- interest rate is 16%, Inflation rate is 11%
e- Australia- interest rate 13%, inflation rate is 18%
3.The World Bank Group was established to help provide long term capital for the reconstruction and development of member countries. Which of the following is not one of its financial institutions?
a- International Bank for Reconstruction and Development (IBRD)
b- International Reconstruction Association (IRA)
c- International finance corporation (IFC)
d- International Development association (IDA)
e- International Finance Association. (IFA)
4.The following are the key advantages of international portfolio investing EXCEPT .
a- Company and stock diversification
b- Lowering risk
d- Large opportunity set for investment
e- Currency diversification
5.Which of the following is NOT a rationale for Direct Foreign Investment(DFI)
a- Avoid taxes
b- Exploit monopolistic advantages
c- Achieve economies of scales
d- Exploit new source of demand