International Financial Management MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on International Financial Management, a fundamental topic in the field of IC 89 Management Accounting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our International Financial Management MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of International Financial Management mcq questions that explore various aspects of International Financial Management problems. Each MCQ is crafted to challenge your understanding of International Financial Management principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 89 Management Accounting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our International Financial Management MCQs are your pathway to success in mastering this essential IC 89 Management Accounting topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of International Financial Management. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your International Financial Management knowledge to the test? Let's get started with our carefully curated MCQs!

International Financial Management MCQs | Page 5 of 13

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Q41.
What is the consequence of the Great Recession?

a.

Increase in world trade volume

b.

Positive effects on global economic growth

c.

Global economic downturn

d.

Enhanced financial integration

Discuss
Answer: (c).Global economic downturn Explanation:The Great Recession is the foundation for the global economic downturn.
Q42.
What is identified as the cause of the Eurozone crisis in 2009?

a.

Lack of fiscal integration and political unification

b.

Strong economic recovery

c.

Efficient international finance management

d.

Positive rating agencies' evaluations

Discuss
Answer: (a).Lack of fiscal integration and political unification Explanation:The cause of the Eurozone crisis in 2009 is the lack of fiscal integration and political unification.
Q43.
How did investors react when the Greek government revealed falsified national budget data in 2009?

a.

Increased investment in Greek bonds

b.

Aggressive selling of Greek bonds

c.

Positive credit rating evaluations

d.

Decreased concern about sovereign default

Discuss
Answer: (b).Aggressive selling of Greek bonds Explanation:Investors reacted by aggressively selling Greek bonds when the Greek government revealed falsified national budget data in 2009.
Q44.
What is the primary difference between Foreign Direct Investment (FDI) and portfolio investment?

a.

FDI involves passive investment, while portfolio investment is active.

b.

FDI is made in financial assets, while portfolio investment is made in physical assets.

c.

FDI results in managerial control, while portfolio investment does not bring financial control.

d.

FDI and portfolio investment are synonymous terms.

Discuss
Answer: (c).FDI results in managerial control, while portfolio investment does not bring financial control. Explanation:FDI results in managerial control over the operations of the foreign entity, while portfolio investment does not bring any financial control.
Q45.
What does FDI include?

a.

Only investment through mergers and acquisitions

b.

Investment in financial assets

c.

Investment in physical assets like plant & machinery, infrastructure, and technology

d.

Only reinvestment of profits earned from overseas operations

Discuss
Answer: (c).Investment in physical assets like plant & machinery, infrastructure, and technology Explanation:FDI includes investment in physical assets like plant & machinery, infrastructure, and technology.
Q46.
What is Net FDI inflow or stock of foreign direct investment?

a.

Cumulative number for a given period

b.

Annual investment amount

c.

Short-term capital

d.

Portfolio investment

Discuss
Answer: (a).Cumulative number for a given period Explanation:Net FDI inflow or stock of foreign direct investment is the cumulative number for a given period.
Q47.
How can a foreign direct investor acquire voting power in an enterprise?

a.

Only through participating in equity as a joint venture

b.

Only through acquiring shares in an associated enterprise

c.

Through various methods, including incorporating a wholly owned subsidiary, acquiring shares, merger, or participating in an equity joint venture

d.

Only by incorporating a wholly owned subsidiary

Discuss
Answer: (c).Through various methods, including incorporating a wholly owned subsidiary, acquiring shares, merger, or participating in an equity joint venture Explanation:There are various methods through which a foreign direct investor may acquire voting power in an enterprise.
Q48.
What is the recommended basis for valuing transactions entering the Balance of Payments (BoP) account, according to the IMF manual?

a.

Historical cost

b.

Face value

c.

Market prices

d.

Book value

Discuss
Answer: (c).Market prices Explanation:The IMF manual recommends that transactions entering the BoP account should be valued at market prices, defined as the amount of money a willing buyer pays to acquire something from a willing seller when commercial considerations alone are involved.
Q49.
How are both imports and exports valued in the Balance of Payments (BoP) according to the IMF manual?

a.

Imports are valued at market prices, and exports are valued at face value

b.

Both imports and exports are valued at free on board (FOB) basis

c.

Imports are valued at book value, and exports are valued at market prices

d.

Both imports and exports are valued at historical cost

Discuss
Answer: (b).Both imports and exports are valued at free on board (FOB) basis Explanation:The IMF manual recommends that both imports and exports should be valued at free on board (FOB) basis. This means the price paid for the insurance and shipment of goods should not be included as part of the value of goods.
Q50.
In the Balance of Payments (BoP) accounting system, how many aspects does every transaction have?

a.

One

b.

Two

c.

Three

d.

Four

Discuss
Answer: (b).Two Explanation:The BoP accounting system follows a standard double-entry bookkeeping system, where every transaction has two aspects – one as a credit and the other as a debit.
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