Q. When a country realizes a deficit on its current account:
✅ Correct Answer: (B)
It becomes a net demander of funds from other countries
International Financial Management MCQs and Notes
Q. A firms expects to receive $20,000 from domestic operations and 20,000 British pounds (£) from a business in England. If the pound's value is $1.25, the expected total dollar cash flows are:
✅ Correct Answer: (C)
$45,000
Q. Multinational firms face exposure to many different types of international risk. Which of the following is not a type of exposure?
✅ Correct Answer: (C)
foreign economies
Q. All of the following statements are explanations of the reason for short-term capital transfers from Country X to Country Y EXCEPT
✅ Correct Answer: (C)
Lower interest rates in Country Y
Q. If the value of exports for a country is $35,500,000 and the value of imports is $35,000,000, the balance of trade can be described as
✅ Correct Answer: (D)
in surplus, favorable and +$500,000
Q. In balance of payments accounting, a credit entry for the home country is
✅ Correct Answer: (A)
an international transaction in which foreigners make payments to residents of the home country
Q. A(n) ___________ is an unconditional promise drawn by one party, instructing the buyer to pay the face amount upon presentation.
✅ Correct Answer: (A)
draft
Q. A banker's acceptance is a draft drawn on and accepted by a(n) __________.
✅ Correct Answer: (A)
bank
Q. Which of the following is not true regarding letters of credit?
✅ Correct Answer: (They guara)
Q. Which of the following is not a payment method used for international trade?
✅ Correct Answer: (C)
factoring.