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.
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
Get Answers For Free
Most questions answered within 1 hours.