The Export Credit Guarantee Department Can Provide MNCs Implementing Direct

question 14

Multiple Choice

The Export Credit Guarantee Department can provide MNCs implementing direct foreign investment in less developed countries with:

• A) insurance that covers losses on multilateral netting procedures.
• B) exchange rate risk insurance.
• C) political risk insurance.
• D) guarantees that MNCs will receive the same taxation treatment by the host government as local firms.
• E) guarantees of lines of credit provided by the World Bank if the MNC experiences liquidity problems.

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Definitions:

Indorsee

A person or entity to whom the rights under a negotiable instrument, such as a check or promissory note, have been legally transferred.

Enforce

To compel observance of or compliance with a law, rule, or obligation.

Negotiable Promissory Note

A financial document that contains a written promise to pay a specified sum of money to a named person or bearer under certain terms.

Worthless Securities

Financial instruments that have lost all monetary value, often resulting in a total loss for the holder.