CFA Level I · CFA Level I Exam · Introduction to Geopolitics
A state prohibits its banks from processing dollar payments for a targeted foreign company and bars investors from buying that company's bonds. These measures are most likely examples of:
These measures are financial tools, namely sanctions restricting access to capital and payment systems. Blocking payment processing and bond purchases limits a target's funding and transactions. They differ from tariffs and quotas, which affect goods trade, and from intelligence operations.
- Afinancial tools such as sanctions on capital accessCorrect
- Beconomic tools such as tariffs and quotas
- Cnational security tools such as intelligence operations
Explanation
Restricting payment processing and investment in a firm's securities limits access to capital and the financial system. These are financial tools. Tariffs and quotas affect goods trade, and intelligence work is a security tool.
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