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web.groovymark@gmail.com
- December 7, 2024
Question 01
Which financial instrument allows the right to buy or sell an asset at a specific price within a set time period?
a) Futures contract
b) Forward contract
c) Options contract
d) Swap contract
Answer: c) Options contract
Explanation:
An options contract gives the holder the right, but not the obligation, to buy or sell an asset at a pre-set price within a specific timeframe.
Question 02
What is the primary goal of hedging in global business?
a) Maximizing profit
b) Reducing risk
c) Increasing market share
d) Improving operational efficiency
Answer: b) Reducing risk
Explanation:
Hedging strategies are used in international business to protect against adverse price movements and reduce financial risk.
Question 03
Which type of cultural dimension reflects the extent to which less powerful members of society accept unequal power distribution?
a) Masculinity vs. femininity
b) Individualism vs. collectivism
c) Power distance
d) Uncertainty avoidance
Answer: c) Power distance
Explanation:
Power distance measures how much inequality in power is accepted within a society and how it is managed within institutions and organizations.
Question 04
What is the main purpose of transfer pricing within multinational corporations?
a) To lower operational costs
b) To optimize global tax strategies
c) To increase consumer loyalty
d) To expand product lines
Answer: b) To optimize global tax strategies
Explanation:
Transfer pricing allows multinational corporations to shift profits between subsidiaries in different countries, often to take advantage of lower tax rates.
Question 05
Which economic theory suggests that countries should specialize in producing goods with the lowest opportunity cost?
a) Absolute advantage
b) Comparative advantage
c) Mercantilism
d) Factor endowment theory
Answer: b) Comparative advantage
Explanation:
The theory of comparative advantage encourages countries to specialize in producing goods that they can produce more efficiently, even if another country can produce those goods with fewer resources.
Question 06
Which organization is responsible for resolving trade disputes and promoting free trade among its member countries?
a) International Monetary Fund (IMF)
b) World Bank
c) World Trade Organization (WTO)
d) United Nations (UN)
Answer: c) World Trade Organization (WTO)
Explanation:
The WTO promotes free trade by overseeing trade agreements and resolving disputes between member countries.
Question 07
What is the main benefit of economies of scale?
a) Increased production flexibility
b) Higher quality products
c) Lower production costs per unit
d) Faster entry into new markets
Answer: c) Lower production costs per unit
Explanation:
Economies of scale occur when increased production leads to lower costs per unit due to spreading fixed costs over a larger number of goods.
Question 08
Which legal system is primarily based on precedents and judicial rulings rather than written laws?
a) Civil law
b) Common law
c) Religious law
d) Customary law
Answer: b) Common law
Explanation:
Common law relies on judicial decisions and precedents set by earlier cases, unlike civil law, which is based on a codified set of laws.
Question 09
What is a key feature of a customs union?
a) Free movement of labor and capital between member states
b) Uniform external trade policies with non-members
c) Independent trade policies for member states
d) Elimination of all trade barriers within the union
Answer: b) Uniform external trade policies with non-members
Explanation:
A customs union eliminates trade barriers between member countries and adopts a common external trade policy toward non-member countries.
Question 10
What is the primary goal of the International Monetary Fund (IMF)?
a) Promote free trade among nations
b) Provide financial assistance to developing nations
c) Stabilize exchange rates and promote international monetary cooperation
d) Facilitate global infrastructure development
Answer: c) Stabilize exchange rates and promote international monetary cooperation
Explanation:
The IMF’s main goal is to stabilize the international monetary system by providing financial assistance and promoting exchange rate stability.
Question 11
Which term refers to the complete sequence of activities involved in producing and delivering a product to consumers?
a) Value chain
b) Distribution network
c) Supply chain
d) Logistics system
Answer: c) Supply chain
Explanation:
The supply chain encompasses all stages of production, from sourcing raw materials to delivering the final product to consumers.
Question 12
Which strategy focuses on offering the same product worldwide with minimal changes?
a) Localization strategy
b) Adaptation strategy
c) Global standardization strategy
d) Glocalization strategy
Answer: c) Global standardization strategy
Explanation:
Global standardization strategy involves offering a uniform product worldwide to achieve economies of scale, rather than customizing products for each market.
Question 13
Which financial instrument involves exchanging currencies at a predetermined rate at a future date?
a) Currency swap
b) Options contract
c) Forward contract
d) Futures contract
Answer: c) Forward contract
Explanation:
A forward contract is an agreement to exchange currencies at a predetermined rate on a specific future date, often used to hedge against currency risk.
Question 14
Which aspect of globalization involves the spread of ideas, languages, and cultural practices across borders?
a) Economic globalization
b) Cultural globalization
c) Political globalization
d) Technological globalization
Answer: b) Cultural globalization
Explanation:
Cultural globalization refers to the diffusion of ideas, values, and cultural practices across national borders, leading to greater interconnectedness of societies.
Question 15
What is the main benefit of using a decentralized organizational structure?
a) Faster decision-making at all levels
b) Greater control over business processes
c) Stronger alignment with corporate strategy
d) Higher operational efficiency
Answer: a) Faster decision-making at all levels
Explanation:
In a decentralized structure, decision-making authority is distributed across various levels, allowing for faster and more flexible responses to local needs.
Question 16
Which international agreement focuses on reducing greenhouse gas emissions to combat climate change?
a) Kyoto Protocol
b) TRIPS Agreement
c) Paris Agreement
d) CITES Convention
Answer: c) Paris Agreement
Explanation:
The Paris Agreement aims to limit global warming to below 2°C by reducing greenhouse gas emissions and encouraging sustainable development practices.
Question 17
Which concept refers to the process of adjusting products or services to meet the preferences of local markets?
a) Standardization
b) Customization
c) Localization
d) Globalization
Answer: c) Localization
Explanation:
Localization involves modifying products, services, or marketing strategies to meet the specific needs and preferences of local markets.
Question 18
What is a key characteristic of the Fourth Industrial Revolution?
a) Emphasis on fossil fuels
b) Integration of digital and physical systems
c) Decline in automation
d) Reduced use of artificial intelligence
Answer: b) Integration of digital and physical systems
Explanation:
The Fourth Industrial Revolution is characterized by the fusion of technologies that blur the lines between the digital, physical, and biological worlds, including AI and automation.
Question 19
What is the primary purpose of a currency swap contract?
a) To secure lower interest rates
b) To hedge against exchange rate fluctuations
c) To invest in foreign currencies
d) To transfer ownership of assets
Answer: b) To hedge against exchange rate fluctuations
Explanation:
A currency swap contract allows two parties to exchange currencies at a predetermined rate to protect against future exchange rate changes.
Question 20
Which type of organizational structure groups employees by both function and product?
a) Functional structure
b) Divisional structure
c) Matrix structure
d) Bureaucratic structure
Answer: c) Matrix structure
Explanation:
In a matrix structure, employees are grouped by both function (e.g., marketing, finance) and product line, creating a flexible and collaborative work environment.
