International Finance, 2026 – Study Material and Practice
Questions
role of CFO - correct answer ✔✔ - investing
- financing
- risk management
- maximize shareholder wealth
Multinational Corporation - correct answer ✔✔ corporation that produces and sells goods and
services in more than one country
are most corporations in the market MNCs? - correct answer ✔✔ yes
How much of S&P500 firms' revenues in 2022 were generated in foreign markets? - correct
answer ✔✔ 40%
Drivers of rise of MNCs - correct answer ✔✔ - Search for Raw Materials
- Market Seeking
- Cost Minimization
- Explore financial-market imperfections
exchange rate - correct answer ✔✔ the price of one nation's currency in terms of another
nation's currency
if 1 US dollar buys 1.39 CAD dollars, which is the reference currency and which is the base -
correct answer ✔✔ CAD = reference
US = base
, foreign exchange risk - correct answer ✔✔ changes in exchange rates that directly affect the
firm's profitability and value
Spot Rate - correct answer ✔✔ exchange rate where currencies are traded for immediate
delivery
- actual delivery takes place two days later
Forward Rate - correct answer ✔✔ price at which foreign exchange is quoted for delivery at a
specified future date
why would someone want to use a forward rate contract - correct answer ✔✔ forward market
allows us to lock in exchange rate today and minimize risk to changes in foreign exchange rates
currency appreciation - correct answer ✔✔ increase in value of base currency
currency depreciation - correct answer ✔✔ decrease in vale of the base currency
calculation for exchange rate changes - correct answer ✔✔ (new value of exchange rate - old
value of exchange rate) / (old value of the exchange rate)
how are exchange rates set - correct answer ✔✔ equate supply and demand in the foreign
exchange market
Factors that influence currency supply and demand - correct answer ✔✔ 1. Inflation rates
2. Interest rates
3. Economic growth
4. Political and Economic risk
Questions
role of CFO - correct answer ✔✔ - investing
- financing
- risk management
- maximize shareholder wealth
Multinational Corporation - correct answer ✔✔ corporation that produces and sells goods and
services in more than one country
are most corporations in the market MNCs? - correct answer ✔✔ yes
How much of S&P500 firms' revenues in 2022 were generated in foreign markets? - correct
answer ✔✔ 40%
Drivers of rise of MNCs - correct answer ✔✔ - Search for Raw Materials
- Market Seeking
- Cost Minimization
- Explore financial-market imperfections
exchange rate - correct answer ✔✔ the price of one nation's currency in terms of another
nation's currency
if 1 US dollar buys 1.39 CAD dollars, which is the reference currency and which is the base -
correct answer ✔✔ CAD = reference
US = base
, foreign exchange risk - correct answer ✔✔ changes in exchange rates that directly affect the
firm's profitability and value
Spot Rate - correct answer ✔✔ exchange rate where currencies are traded for immediate
delivery
- actual delivery takes place two days later
Forward Rate - correct answer ✔✔ price at which foreign exchange is quoted for delivery at a
specified future date
why would someone want to use a forward rate contract - correct answer ✔✔ forward market
allows us to lock in exchange rate today and minimize risk to changes in foreign exchange rates
currency appreciation - correct answer ✔✔ increase in value of base currency
currency depreciation - correct answer ✔✔ decrease in vale of the base currency
calculation for exchange rate changes - correct answer ✔✔ (new value of exchange rate - old
value of exchange rate) / (old value of the exchange rate)
how are exchange rates set - correct answer ✔✔ equate supply and demand in the foreign
exchange market
Factors that influence currency supply and demand - correct answer ✔✔ 1. Inflation rates
2. Interest rates
3. Economic growth
4. Political and Economic risk
