Question 1) The study of international finance encompasses: exchange rate determination and volatility the joint determination of the exchange rate and the Balance of Payments the financial operations of firms in the international environment all of the answers given   Question 2 The term ‘international operations’ encompasses: international trade international investment and financing operations carrying out production abroad all of the answers given   Question 3 The term ‘international business firm’ refers to: a firm engaged in cross border activities such as importing and exporting, without necessarily engaging in offshore production or ownership of foreign assets a firm engaged in production in another country a firm which owns a subsidiary located in another country a firm which is known around the world for its quality   Question 4 Which of the following statements is false? Excessive financial regulation is thought by the majority of observers to be one of the factors causing the global financial crisis to materialise and become pronounced Excessive financial deregulation is thought by the majority of observers to be one of the factors causing the global financial crisis to materialise and become pronounced Major countries shifted to a system of flexible of floating exchange rates in 1973 By the 1980s exchange rates had become volatile and misaligned   Question 5 Balance of payments difficulties are a source of concern for the finance manager because: they affect interest rates they affect exchange rates they create constraints on economic policy all of the answers given   Question 6 The appreciation of the domestic currency is always good for firms with international operations always bad for firms with international operations good or bad, depending on the specific conditions of the situation good or bad, depending on the interest rate differential   Question 7 The globalisation of finance has been driven by: advances in information and computer technology globalisation of national economies liberalisation of national financial and capital markets all of the answers given   Question 8 The Eurocurrency market: is a market for assets denominated in currencies other than that of the country in which they are held is a market in which euro-denominated assets are bought and sold is a foreign currency market based in Europe includes all foreign currency trading conducted in the European Union             Question 9 The twin deficit problem refers to deficits in the United States’: current account and budget capital account and budget capital account and unilateral transfers budget and unilateral transfers   Question 10 Financial market integration requires: free capital movement substitutability between domestic and foreign assets membership of a currency area both free capital movement and substitutability between domestic and foreign assets