Which of the Following Statements Is True of Free Trade

question 75

Multiple Choice

Which of the following statements is true of free trade zones?

• A) Central American countries and the Dominican Republic (CAFTA-DR) have a free trade agreement between the United States and Europe that has resulted in greater exports of U.S. beef to Europe.
• B) The North American Free Trade Agreement (NAFTA) is a free trade agreement between the United States, Canada, and Mexico that has reduced illegal migration of Mexicans to the United States.
• C) The Association of Southeast Asian nations (ASEAN) is a free trade agreement between the United States and a group of South Asian countries that has led to an increase in U.S. outsourcing to countries like India.
• D) Mercosur is a free trade association of Latin American countries that aims to increase export subsidies and domestic content requirements in each member country.
• E) The Trans-Pacific Partnership is a free trade association of South Africa and its four neighboring countries.

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Definitions:

Portfolio Concentration

The over-representation of a particular asset class, sector, or stock within an investment portfolio, leading to heightened risk.

Treasury Bills

Short-term government securities issued at a discount from the face value and mature in a year or less, representing a secure investment.

Long-term Bonds

are bonds that mature over a period typically longer than ten years, offering a fixed interest rate over their life span.

Systematic Risks

The danger present in the whole market or a specific market segment, referred to as market risk, is unavoidable even with diversification.