Global Finance with Electronic Banking - Prelim

General Instruction: This exam only has 42 questions but is worth 100 points in total. Send your answer sheet on or before 8:00 AM of October 15, 2022.

* Required

1. Name *

2. Which of the following best describes what an MNC is? *

Mark only one oval.

An MNC is a business entity that owns and manages the production of goods or services in at least one nation outside from its own.

A multinational corporation (MNC) is a company that manages its operations in its home nation or the state where it was incorporated.

An MNC is a type of corporate structure in which two corporations maintain their distinct legal identities and stock exchange listings while working as one operating company under the terms of a formal
equalization agreement.

3. Which of the following is not an example of how firms engage in international business? *

Mark only one oval.

A local business is given a license to use Life is Good's designs and brand in a certain nation.

Importing and exporting of consumer goods.

Closing of all Jollibee Food Corporation branches in the Philippines to migrate to the USA.

4. An American corporation which generates a consolidated revenue of Php.

15,000,000 per year, has a branch in the Philippines. The concerned branch
generates at least Php. 5 million pesos *
per year. Is it considered an MNC?

Mark only one oval.

Yes

No

Maybe

5. With regard to the previous item, why is it or why is it not considered an MNC?
*

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It also generates at least 25% of its revenue in its home country.

It also generates at least 25% of its revenue outside of its home country.

It also generates more than Php. 10,000,000.00 of its revenue outside of its home country.

6. Which of the following terms is not synonymous with "Multinational Corporation"? *

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International Corporation

Transnational Corporate Enterprise

Migrated Business Enterprise

7. Which of the following is not an advantage of a centralized multinational financial management over a decentralized one? *

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There is an efficient communication chain.

There is a clearer vision.

Quick decision making is prioritized.

8. Which of the following theory explains why firms pursue international business? *

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Theory of Exponential Advantage

Perfect Markets Theory

Product Cycle Theory

9. The global commerce has typically grown over time. The growing understanding that country specialization can boost production efficiency is partly responsible for this expansion. What theory *
explains this circumstance?

Mark only one oval.

Theory of Comparative Advantage

Imperfect Markets Theory

Product Circle Theory

10. This theory explains that the rigorous standards of a hypothetical purely competitive market is not being met in a business' home country. Businesses struggle for market share, there are *
high entrance and exit barriers, and there are a lot of goods and services variations. What theory is this?

Mark only one oval.

Theory of Exponential Advantage

Imperfect Markets Theory

Production Cycle Theory

11. This theory suggests that a firm initially establishes itself locally and expand into foreign markets in response to foreign demand for its product. What theory is this? *

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Theory of Exponential Advantage

Imperfect Markets Theory

Product Cycle Theory

12. Which is not an example of how firms engage in international business? *

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Residents of other nations buy the products that a Philippine company produces.

In order to market a cutting-edge product, a technology business forms a relationship opens in new window with a marketing firm.

Nestle agreed to pay a certain amount of cash to its subsidiary for exclusive rights to sell its products.

13. The balance of payments is a summary of the exchanges between citizens of one country and citizens of another within a given time period.
*

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True

False

Somewhat true

14. The current account is a summary of all financial transactions that take place between one country and all others, whether they are related to the purchase of goods or services, the provision *
of revenue from financial assets, or both.

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True

False

Somewhat true

15. The capital account serves as a summary of the financial transactions arising from obligation sales between one country and all others during a given time frame.
*

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True

False

Somewhat true

16. Which of the following is not an international trade issue? *

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NAFTA

Inception of Euro

Putin's birthday celebration

17. Which of the following is not a factor that affects international trade flows? *

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A prolonged period of real GDP (output) growth that is subpar or negative and is accompanied by a considerable increase in the unemployment rate

A government's aims, decisions, and actions for managing politics, society, and the economy are expressed in a policy.

The value of one nation's currency in relation to another nation's currency

18. Member nations aiming to address international payment imbalances are given short-term money by this organization.
*

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International Monetary Fund

World Trade Organization

International Financial Corporation

19. Its main goal is to lend money to nations so they can advance their economies.
*

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Bank for International Settlements

World Trade Organization

World Bank

20. Making sure that trade moves as smoothly, predictably, as freely as possible is its main goal.
*

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Organization for Economic Cooperation and Development

Regional Development Agencies

World Trade Organization

21. This group offers low-interest loans to developing nations that do not fit the criteria for loans from the World Bank.
*

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Organization for Economic Cooperation and Development

World Trade Organization

International Development Association

22. It promotes international relations that lead to globalization.

*

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World Trade Organization

Organization for Economic Cooperation and Development

International Development Association

23. Take the side of the Philippine industry. Indicate if the transaction results to a cash outflow or inflow:
*

For consultancy, the Mexican government pays a Philippine consulting business.

services offered by the business.

Mark only one oval.

Cash inflow

Cash outflow

No transaction

24. Take the side of the Philippine industry. Indicate if the transaction results to a cash outflow or inflow:
*

A business with its main office in the Philippines imports computer chips from Thailand for use in building computers.

Mark only one oval.

Cash outflow

Cash inflow

No transaction

25. Take the side of the Philippine industry. Indicate if the transaction results to a cash outflow or inflow: *

A French business in which a Cebuano investor purchased stock pays her a dividend.

Mark only one oval.

Cash inflow

Cash outflow

No transaction

26. Take the side of the Philippine industry. Indicate if the transaction results to a cash outflow or inflow: *

The Cebuana provides aid to Bicol in response to the most recent typhoon.

Mark only one oval.

Cash inflow

Cash outflow

No transaction
27. Indicate if the transaction affects the current or capital account of the Philippines. *

The Cebuana provides aid to Bicol in response to the most recent typhoon.

Mark only one oval.

No transaction

Capital Account

Current Account

28. Indicate if the transaction affects the current or capital account of the Philippines. *

A French business in which a Cebuano investor purchased stock pays her a dividend.

Mark only one oval.

Current account

Capital account

No transaction

29. Indicate if the transaction affects the current or capital account of the Philippines. *

A business with its main office in the Philippines sold its machineries to Thailand for use in its construction projects.

Mark only one oval.

Current account

Capital account

No transaction

30. The relationship between a currency's supply and demand determines its exchange rate equilibrium.
*

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True

False

Somewhat true

31. Demand of currency for sale is an outflow of money into an economy. *

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True

False

Somewhat true

32. Governments can modify macro variables like inflation, interest rates, and income levels as well as foreign exchange and trade obstacles, market intervention, and macro variable imposition *
to affect the equilibrium exchange rate with the permission of its citizens.

Mark only one oval.

True

False

Somewhat true

33. Currency derivatives are contracts to buy or sell currencies at a future date.

*

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True

False

Somewhat true

34. The same asset is simultaneously bought and sold in different marketplaces in order to profit from minute variations in the asset's stated price. This is an example of what technique?
*

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Options

Diversification

Arbitrage

35. A classic example of this technique is vintage clothing. A given set of old clothes might cost $50 at a thrift store or an auction. At a vintage boutique or online, fashion conscious customers *
might pay $500 for the same clothes.

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Buy and sell

Securitization

Arbitrage
36. A forward contract is an individual, fixed contract that settles at its conclusion and is traded over the counter.
*

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True

False

Somewhat true

37. The most popular futures market exchange market is _________________? *

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Euronext exchanges

Intercontinental Exchange (ICE)

Chicago Mercantile Exchange (CME) Group

38. Without the aid of a central exchange or another third party, participants in these markets transact business directly between two parties. What market is this?
*

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Exchange markets

Over-the-counter markets

Black market

39. When a country has a floating exchange rate, the foreign exchange market determines the value of its currency based on supply and demand in relation to other currencies. *

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True

False

Somewhat true

40. A managed currency has its value and exchange rate affected in some way by a private institution.
*

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True

False

Somewhat false

41. Which of the following is not an effect of dollarization to a country? *

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More stable capital market

End of sudden capital outflows

A balance of payments that is less immune to crises

42. To ensure that there is no alteration to the money supply, this is done.
*

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Non-sterilized intervention

Sterilized intervention

Money printing

43. It is carried out without thinking about keeping the same flow of cash throughout.
*

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Non-sterilized intervention

Sterilized intervention

Money printing

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