Financial Planning II 4.04

One factor that contributed to financial globalization was the shift of many developed countries from one exchange rate to another. What specific exchange rates were switched?

• floating, fixed

• fixed, floating

• declining, pegged

• pegged, declining

One factor that has stimulated financial globalization is an increase in:

• protectionism

• foreign regulation

• domestic competition

• domestic investment preferences

Financial globalization tends to cause an increase in:

• herd behavior among investors

• taxes on international transactions

• investors' exposure to business cycle risks

• limits on foreigners' access to domestic markets

India is a financial market with a developing economy that is receptive to foreign investment. Even though India may be more volatile compared to other markets, investors in the United States see opportunity. What type of market is India considered?

• value market

• cultural market

• domestic market

• emerging market

When an emerging market suffers an economic decline, foreign investors usually:

• help the emerging market recover economically

• pay less for each transaction in the emerging market

• quickly withdraw their money from the emerging market

• use the opportunity to invest more in the emerging market