Question

T or F   1) The theory of comparative advantage suggests specialization by country increases worldwide production....

T or F   1) The theory of comparative advantage suggests specialization by country increases worldwide production.

T or F   2) Comparative advantage is not sensitive to government interference.

T or F   3) Comparative advantage never changes over time.

T or F   4) Financial capital as a factor of production usually flows freely between countries.

T or F   5) Defensive investments are design to deny opportunities to a firm’s competitors.

T or F   6) Exchange rate regimes reflect trade-offs between rules and discretion and between cooperation and independence.

T or F   7) Seignorage is the ability of a country to profit from printing its own money.

T or F   8) Special Drawing Rights (SDRs) allow members of the International Monetary Fund (IMF) to settle transactions with other IMF members.

T or F   9) The Stakeholder Capitalism Model is the Anglo-American model of corporate governance.

T or F   10) The Shareholder Wealth Maximization Model clearly places shareholders as the primary shareholder.

T or F   11) In the Shareholder Wealth Maximization Model the primary goal of management is to maximize the wealth of all stakeholders.

T or F   12) Poor firm performance is more likely to lead to takeover or firm restructuring under the Shareholder Wealth Maximization than under the Stakeholder Capitalism Model.

T or F   13) LIBOR is the London Inter-Bank Offer Rate and represents the rate at which London banks are willing to lend to other London banks.

T or F   14) Daily trading volume in the world foreign exchange markets is measured in millions of dollars.

T or F   15) In general, the four or five major currencies represent about only 25% of foreign exchange.

T or F   16) A foreign currency futures or forward contract involves the future exchange of agreed amounts of currency on a specific date.

T or F   17) By selling pounds forward you will have locked in the price at which you will receive pounds in exchange for another currency.

T or F   18) An Out-of-the-money option has an underlying spot rate that is equal to the exercise price.

T or F   19) A swap contract can allow a firm to modify existing asset or liability cash-flows from variable to fixed (or vice versa) and from one currency to another currency.

T or F   20) Swap contracts are a series of options negotiated together rather than individually.

Homework Answers

Answer #1

3) Comparative advantage never changes over time – False

Reason - Comparative advantage is not a static concept - it may change over time.

2) Comparative advantage is not sensitive to government interference - True

Reason – It is ruled by free competition and without governmental interference

1) The theory of comparative advantage suggests specialization by country increases worldwide production – True

5)Defensive investments are design to deny opportunities to a firm’s competitors – True

Reason - Defensive investments are designed to denyfirm's competitors

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions