International finance is primarily concerned with:

Monetary interactions between at least two countries

Domestic economic activities within a single country

Globalization and its impact on financial markets

Foreign direct investment and its effects on exchange rates

Which of the following is NOT a reason why international finance is important?

To determine exchange rates and compare inflation rates

To understand the economic status of other countries

To assess the profitability of domestic companies

To judge foreign markets and make investment decisions

What is the role of international finance organizations like the IMF and World Bank?

To promote global trade and economic development

To regulate international financial markets

To provide financial support to developing countries

To mediate disputes between nations regarding finance

What is the purpose of External Commercial Borrowing (ECB)?

To facilitate Indian companies in raising money in foreign currency

To encourage foreign companies to invest in the Indian market

To regulate the inflow and outflow of foreign capital in India

To promote international trade between India and other countries

Which of the following is an advantage of External Commercial Borrowing (ECB)?

Lower borrowing costs from foreign economies with lower interest rates

Diversification of investor base for the borrowing company

Access to international markets and exposure to global opportunities

Potential for higher profitability and economic growth

What is an American Depository Receipt (ADR)?

A negotiable instrument issued by a U.S. bank representing shares of a foreign company

An investment option exclusively available to American investors

A certificate issued by a foreign bank representing shares of a U.S. company

A type of security that can only be traded on U.S. equity markets

What is the advantage of investing in American Depository Receipts (ADRs)?

Access to foreign companies and potential for higher returns

Simplified tax calculations compared to investing directly in foreign markets

Lower transaction costs and higher liquidity

Protection against currency fluctuations and exchange rate risk

What currency are dividends paid in for American Depository Receipts (ADRs)?

Foreign currency of the issuing company

What is a Global Depository Receipt (GDR)?

An instrument that allows a company to issue shares or convertibles bonds outside its domestic country

An investment option exclusively available to non-resident investors

A certificate issued by a domestic bank representing shares of a foreign company

A type of security that can only be traded on international stock exchanges

What is an advantage of Global Depository Receipts (GDRs)?

Increased liquidity and access to international capital markets

Simplified tax calculations compared to investing directly in the issuing country

Lower transaction costs and higher profitability for domestic companies

Protection against currency fluctuations and exchange rate risk

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