Scenario: Color-Me-Green Inc. Color-Me-Green Inc., a U.S.-Based Clothing Merchant, Has Started Doing Business

question 9

Multiple Choice

Scenario: Color-Me-Green Inc.
Color-Me-Green Inc., a U.S.-based clothing merchant, has started doing business internationally. Having subsidiaries in several countries, the company must integrate financial information from all its subsidiaries with the U.S. home office at the end of the year.
-In an attempt to raise money in Country B,Color-Me-Green was quoted an interest rate of 14 percent by a local bank.This quoted rate is called the ________ rate.

• A) cross
• B) artificial
• C) nominal
• D) exchange

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Definitions:

World Trade Organization

An international organization that regulates international trade and ensures that trade flows as smoothly, predictably, and freely as possible.

Institutionalized

Institutionalized refers to the process by which certain practices or norms become established and accepted in society or within an organization as formal structures.

NAFTA

The North American Free Trade Agreement, a treaty between Canada, Mexico, and the United States that was designed to remove tariff barriers between the three countries.

Free Trade

The unregulated exchange of goods and services across borders without tariffs or other barriers.