International Finance And Treasury - Study Mode
[#386] Investors take political hazard as
Correct Answer
(B) Discouraged
Explanation
Solution: Investors take political hazard as discouraged. Political risk is also known as " geopolitical risk," and becomes more of a factor as the time horizon of investment gets longer.
[#387] A merely household organization may be influenced by exchange rate variations if it faces at slightest some
Correct Answer
(B) Foreign competition
Explanation
Solution: A merely household organization may be influenced by exchange rate variations if it faces at slightest some foreign competition. Foreign competition is a viable alternative for customers, it would lessen a dominant firm's ability to exercise market power post-merger.
[#388] Technique by which companies reduce cost of transaction services and results in increased efficiency is classified as
Correct Answer
(B) economies of scale
Explanation
Solution: Technique by which companies reduce cost of transaction services and results in increased efficiency is classified as economies of scale. Economies of scale are cost reductions that occur when companies increase production. The fixed costs, like administration, are spread over more units of production. Sometimes the company can negotiate to lower its variable costs as well.
[#389] If financial intermediaries are appointed by funds suppliers then these intermediaries are classified as
Correct Answer
(C) delegated monitor
Explanation
Solution: If financial intermediaries are appointed by funds suppliers then these intermediaries are classified as delegated monitor. The delegated monitor is a financial intermediary because it borrows from small investors (depositors), using unmonitored debt (deposits) to lend to borrowers (whose loans it monitors).
[#390] Risk which arises all activities from contingent liabilities and assets is considered as
Correct Answer
(A) off balance sheet risk
Explanation
Solution: Risk which arises all activities from contingent liabilities and assets is considered as off balance sheet risk. Off balance sheet refers to items that are effectively assets or liabilities of a company but do not appear on the company's balance sheet.