Which of the Following Is Not a Goal of the International

question 62

Multiple Choice

Which of the following is not a goal of the International Monetary Fund (IMF) ?

• A) To promote cooperation among countries on international monetary issues
• B) To promote stability in exchange rates
• C) To enhance a country's long-term economic growth via the extension of structural adjustment loans
• D) To promote free trade
• E) To promote free mobility of capital funds across countries

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Definitions:

Diversifiable Risk

The risk that a borrower will not pay theinterest and/or principal on a loan as it becomes due. Ifthe issuer defaults, investors receive less than the promised return on the bond. Default risk is influenced byboth the financial strength of the issuer and the terms ofthe bond contract, especially whether collateral has beenpledged to secure the bond. The greater the default risk,the higher the bond’s yield to maturity.

Required Rate

The minimum annual percentage return an investment must earn to be considered a viable option.

Nondiversifiable Risk

A type of investment risk that cannot be mitigated or eliminated through portfolio diversification, often associated with market-wide risks.

Realized Return

The actual gain or loss achieved on an investment over a specific period, taking into account both income and capital gains.