1. The Stakeholder Capitalism Model

(a) clearly places shareholders as the primary stakeholder.

(b) combines the interests and inputs of shareholders, creditors, management, employees, and society.

(c) has financial profit as its goal and is often termed impatient capital.

(d) is the AngloAmerican model of corporate governance.

2. A special drawing right (SDR) is the weighted average of the following currencies:

(a) US dollar, British pound, Japanese yen, and the euro

(b) US dollar, British pound, Japanese yen, Russian Ruble, and the euro

(c) US dollar, British pound, Japanese yen, Russian Ruble, Chinese yuan, and the euro

(d) None of the above, SDRs currently depend on the price of crude oil.

3. A country experiencing a serious BOP _________ is more likely to __________ imports than otherwise.

(a) surplus; contract

(b) deficit; contract

(c) deficit; expand

(d) None of the above

4. The relationship between the percentage change in the spot exchange rate over time and the differential between comparable interest rates in different national capital markets is known as:

(a) absolute PPP

(b) the law of one price

(c) Relative PPP

(d) the international Fisher Effect

5. ___________________ is the spread of a crisis in one country to its neighboring countries and other countries that have similar characteristics.

(a) Contraband

(b) Contagion

(c) Cross-border political risk

(d) Current account exposure

6. The date of settlement for a foreign exchange transaction is referred to as the:

(a) Value date

(b) Maturity date

(c) Swap date

(d) Transaction date

7. An agreement to exchange interest payments based on a fixed payment for those based on a variable rate (or vice versa) is known as a/an:

a) forward rate agreement.

b) interest rate future.

c) interest rate swap.

d) none of the above

8. The primary goal of both domestic and international portfolio managers is

(a) to maximize return for a given level of risk, or minimize risk for a given level of return.

(b) minimize the number of unique securities held in their portfolio.

(c) maximize their WACC.

(d) All of the above 9. ________________ are similar to ordinary shares of stock but have the added benefit of being able to trade on equity exchanges around the globe in a variety of currencies.

(a) American Depositary Receipts (ADRs)

(b) Global Registered Shares (GRSs)

(c) GAAPs

(d) Worldwide Tradeable Shares (WTSs)

10. Some experts claim that the risk of investing in foreign countries is two-sided because

(a) foreign currencies may increase or decrease.

(b) net cash flows may increase or decrease depending upon where inputs are sourced and products are sold.

(c) foreign currency depreciation may be more than offset by increased sales.

(d) All of the above