CFA 16.1
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Questions and Answers

A country that generally engages in bilateralism is best characterized as exhibiting:

  • non-cooperation and globalization.
  • cooperation and globalization.
  • cooperation and nationalism (correct)
  • A high-net-worth investor has a long time horizon of approximately 25 years before he will shift his allocations more in favor of safer, low-risk investments. The likelihood of this investor reacting to an event categorized as a black swan risk by changing his allocations is:

  • moderate.
  • high.
  • low. (correct)
  • Black swan risk refers to exogenous geopolitical risks that have substantial:

  • long-term effects and a high probability of occurrence.
  • long-term effects and a low probability of occurrence.
  • short-term effects and a low probability of occurrence. (correct)
  • Exogenous geopolitical risk factors are best described as those that are:

    <p>unanticipated.</p> Signup and view all the answers

    The primary goals of the International Monetary Fund (IMF) include:

    <p>promoting exchange rate stability.</p> Signup and view all the answers

    A geopolitical risk that will have the biggest impact in the environmental, social, and governence realm will most likely have a velocity classification that is:

    <p>low.</p> Signup and view all the answers

    A country whose actions reflect nationalism is least likely to behave in ways that exhibit:

    <p>hegemony.</p> Signup and view all the answers

    A country with little or no external trade is most likely one that practices:

    <p>autarky.</p> Signup and view all the answers

    A country joins a free trade agreement with its surrounding countries. The country also enacts a law prohibiting its domestic manufacturers from exporting military technology. In terms of geopolitics, which of these actions is considered cooperative?

    <p>Only one of these actions.</p> Signup and view all the answers

    Geopolitical risks are best described as having:

    <p>greater impacts during recessionary phases of business cycles.</p> Signup and view all the answers

    Promoting international monetary cooperation, promoting exchange stability, and assisting members experiencing balance of payments difficulties are the goals of the:

    <p>International Monetary Fund.</p> Signup and view all the answers

    With respect to analyzing geopolitical risk, velocity most likely refers to the speed with which:

    <p>investment values reflect the effects of a risk.</p> Signup and view all the answers

    If the country of Smithia enacts sanctions against the political leaders of Jonesia, Smithia is said to be using:

    <p>a financial tool of geopolitics.</p> Signup and view all the answers

    The most accurate description of the relative roles played by the International Monetary Fund, World Bank, and World Trade Organization is that the only one explicitly focused on:

    <p>reducing poverty is the World Bank.</p> Signup and view all the answers

    Settling trade disputes and establishing agreements between trading partners most accurately describe the activates of the:

    <p>World Trade Organization.</p> Signup and view all the answers

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