Question 1

Net exposed assets equal ______.

Accepted Answer

A)  assets less liabilities 
B)  exposed assets less exposed liabilities 
C)  shareholders' equity 
D)  More than one of the above 
E)  None of the above 
A)  assets less liabilities 
B)  exposed assets less exposed liabilities 
C)  shareholders' equity 
D)  More than one of the above 
E)  None of the above

Question 2

Empirical studies have found that non-U.S. firms are less willing than U.S. firms to hedge translation exposure.

Accepted Answer

A) True 
 B)False

Question 3

To maximize shareholder wealth, managers should only hedge translation exposure if it ______.

Accepted Answer

A)  affects the total risk of the firm 
B)  involves accounting profits 
C)  involves cash flows 
D)  is convenient 
E)  None of the above 
A)  affects the total risk of the firm 
B)  involves accounting profits 
C)  involves cash flows 
D)  is convenient 
E)  None of the above

Question 4

Historical cost accounting is reliable, but is less relevant than fair value accounting.

Accepted Answer

A) True 
 B)False

Question 5

Translation exposure is far more important than economic exposure to the value of the multinational corporation.

Accepted Answer

A) True 
 B)False

Question 6

When market prices are unavailable, historical cost accounting is more reliable than market value accounting.

Accepted Answer

A) True 
 B)False

Net exposed assets equal ______.

Empirical studies have found that non-U.S. firms are less willing than U.S. firms to hedge translation exposure.

To maximize shareholder wealth, managers should only hedge translation exposure if it ______.

Historical cost accounting is reliable, but is less relevant than fair value accounting.

Translation exposure is far more important than economic exposure to the value of the multinational corporation.

When market prices are unavailable, historical cost accounting is more reliable than market value accounting.

An Introduction to Multinational Finance

World Trade and the International Monetary System

Foreign Exchange and Eurocurrency Markets

The International Parity Conditions and Their Consequences

Extension: the International Parity Conditions and Their Consequences

Currency Futures and Futures Markets

Currency Options and Options Markets

Currency Swaps and Swaps Markets

Multinational Treasury Management

Extension: Multinational Treasury Management

Managing Transaction Exposure to Currency Risk

Managing Operating Exposure to Currency Risk

Foreign Market Entry and Country Risk Management

Multinational Capital Budgeting

Multinational Capital Structure and Cost of Capital

Taxes and Multinational Corporate Strategy

Real Options and Cross-Border Investment Strategy

Corporate Governance and the International Market for Corporate Control

International Capital Markets

International Portfolio Diversification

International Asset Pricing

Filters

Exam 11: Managing Translation Exposure and Accounting for Financial Transactions

Net exposed assets equal ______.

Empirical studies have found that non-U.S. firms are less willing than U.S. firms to hedge translation exposure.

To maximize shareholder wealth, managers should only hedge translation exposure if it ______.

Historical cost accounting is reliable, but is less relevant than fair value accounting.

Translation exposure is far more important than economic exposure to the value of the multinational corporation.

When market prices are unavailable, historical cost accounting is more reliable than market value accounting.

An Introduction to Multinational Finance

World Trade and the International Monetary System

Foreign Exchange and Eurocurrency Markets

The International Parity Conditions and Their Consequences

Extension: the International Parity Conditions and Their Consequences

Currency Futures and Futures Markets

Currency Options and Options Markets

Currency Swaps and Swaps Markets

Multinational Treasury Management

Extension: Multinational Treasury Management

Managing Transaction Exposure to Currency Risk

Managing Operating Exposure to Currency Risk

Foreign Market Entry and Country Risk Management

Multinational Capital Budgeting

Multinational Capital Structure and Cost of Capital

Taxes and Multinational Corporate Strategy

Real Options and Cross-Border Investment Strategy

Corporate Governance and the International Market for Corporate Control

International Capital Markets

International Portfolio Diversification

International Asset Pricing

Filters