Global Finance Quiz

Which institution is responsible for stabilizing exchange rates and facilitating international trade?

• World Bank

• IMF

• WTO

• UN

The primary goal of international financial management is to:

• Maximize local currency

• Minimize foreign investments

• Maximize shareholder wealth

• Avoid international trade

Which of the following is a component of the balance of payments?

• Income statement

• Capital account

• Profit and loss account

• Ledger account

Foreign exchange market is also known as:

• Currency market

• Commodities market

• Stock market

• Derivatives market

The currency used in international transactions is commonly:

• Euro

• Japanese Yen

• U.S. Dollar

• British Pound

The risk arising from exchange rate fluctuations is called:

• Credit risk

• Liquidity risk

• Currency risk

• Operational risk

What does FDI stand for in international finance?

• Foreign Debt Investment

• Foreign Direct Investment

• Fixed Dividend Income

• Foreign Domestic Interest

What does the international flow of funds refer to?

• Movement of goods and services only

• Movement of money between countries

• Migration of labor

• Movement of capital within a country

Which document records a country’s international transactions?

• Balance sheet

• Budget statement

• Balance of Payments

• Cash flow statement

The current account includes all of the following except:

• Exports and imports of goods

• Income payments

• Capital transfers

• Services