Question 1

Which of the following statements holds true for transnational financing?

Accepted Answer

A) It refers to the process of financing major projects such as plant expansion in different countries, entry into new countries, or research and development in new countries. 
B) It refers to investing capital in foreign markets. 
C) It refers to the process and a set of procedures used to estimate the economic value of an owner's interest in a transnational business. 
D) It refers to seeking capital from foreign sources. 
E) It refers to a technique that companies use to reduce the costs of cross-border payments between subsidiaries. 
A) It refers to the process of financing major projects such as plant expansion in different countries, entry into new countries, or research and development in new countries. 
B) It refers to investing capital in foreign markets. 
C) It refers to the process and a set of procedures used to estimate the economic value of an owner's interest in a transnational business. 
D) It refers to seeking capital from foreign sources. 
E) It refers to a technique that companies use to reduce the costs of cross-border payments between subsidiaries.

Question 2

_____ refers to all the stock exchanges worldwide where firms can buy and sell stock for financing an investment.

Accepted Answer

A) Global equity market 
B) Commodity market 
C) Currency market 
D) Futures market 
E) World trade market 
A) Global equity market 
B) Commodity market 
C) Currency market 
D) Futures market 
E) World trade market

Question 3

Which of the following statements holds true for a forward contract?

Accepted Answer

A) It refers to the method of foreign-currency translation in which items in the subsidiaries' financial statements are translated into the currency of the parent corporation at the current exchange rate. 
B) It refers to the company-generated forecast of future spot exchange rates between two trading partners. 
C) It refers to a method of foreign-currency translation that uses exchange rates based on the rate in place when the assets and liabilities were originally acquired or incurred. 
D) It refers to the contract between two parties to buy or sell an asset today. 
E) It refers to an agreement in which a firm agrees to pay a specific rate at the beginning of the contract for delivery at a future date. 
A) It refers to the method of foreign-currency translation in which items in the subsidiaries' financial statements are translated into the currency of the parent corporation at the current exchange rate. 
B) It refers to the company-generated forecast of future spot exchange rates between two trading partners. 
C) It refers to a method of foreign-currency translation that uses exchange rates based on the rate in place when the assets and liabilities were originally acquired or incurred. 
D) It refers to the contract between two parties to buy or sell an asset today. 
E) It refers to an agreement in which a firm agrees to pay a specific rate at the beginning of the contract for delivery at a future date.

Question 4

_____ refers to the organized trading of securities through exchanges.

Accepted Answer

A) Commodity market 
B) Currency market 
C) Stock market 
D) Futures market 
E) Gray market 
A) Commodity market 
B) Currency market 
C) Stock market 
D) Futures market 
E) Gray market

Question 5

Which of the following statements holds true for multilateral netting?

Accepted Answer

A) It refers to the process of financing long-term outlays for major projects such as plant expansion, entry into new markets, or research and development. 
B) It refers to raising capital by borrowing the money and agreeing to repay the entire amount plus agreed-upon interest at a specific date in the future. 
C) It refers to raising capital by selling shares of stock across countries. 
D) It refers to a set of procedures used to estimate the economic value of an owner's interest in a business. 
E) It refers to a technique that companies use to reduce the costs of cross-border payments between three or more subsidiaries. 
A) It refers to the process of financing long-term outlays for major projects such as plant expansion, entry into new markets, or research and development. 
B) It refers to raising capital by borrowing the money and agreeing to repay the entire amount plus agreed-upon interest at a specific date in the future. 
C) It refers to raising capital by selling shares of stock across countries. 
D) It refers to a set of procedures used to estimate the economic value of an owner's interest in a business. 
E) It refers to a technique that companies use to reduce the costs of cross-border payments between three or more subsidiaries.

Question 6

Which of the following statements holds true for a centralized financial organization structure?

Accepted Answer

A) The government of the host country in which the subsidiary is located makes financing or investment decisions for the organization, taking advantage of local knowledge and moving quickly to respond to opportunities or uncertainties. 
B) Multinational firms choose a centralized financial organization structure due to variations in language, consumers, cultures, business practices, and government rules, laws, and regulations among different countries. 
C) Subsidiaries or regions make financing or investment decisions for their region, taking advantage of local knowledge and moving quickly to respond to opportunities or uncertainties. 
D) The financial institutions which fund the organization set guidelines for the headquarters as well as the subsidiaries to follow, pool funds, leverage the benefits of scale for investment and borrowing, and hire knowledgeable staff to make the most effective firm-wide decisions. 
E) All finance decisions are performed at headquarters, which sets guidelines for subsidiaries to follow, pools funds, leverages the benefits of scale for investment and borrowing, and hires knowledgeable staff to make the most effective firm-wide decisions. 
A) The government of the host country in which the subsidiary is located makes financing or investment decisions for the organization, taking advantage of local knowledge and moving quickly to respond to opportunities or uncertainties. 
B) Multinational firms choose a centralized financial organization structure due to variations in language, consumers, cultures, business practices, and government rules, laws, and regulations among different countries. 
C) Subsidiaries or regions make financing or investment decisions for their region, taking advantage of local knowledge and moving quickly to respond to opportunities or uncertainties. 
D) The financial institutions which fund the organization set guidelines for the headquarters as well as the subsidiaries to follow, pool funds, leverage the benefits of scale for investment and borrowing, and hire knowledgeable staff to make the most effective firm-wide decisions. 
E) All finance decisions are performed at headquarters, which sets guidelines for subsidiaries to follow, pools funds, leverages the benefits of scale for investment and borrowing, and hires knowledgeable staff to make the most effective firm-wide decisions.

Question 7

The Mexican subsidiary of an American durables giant acquired a market research firm a few months ago.The rate of exchange at the time of acquisition was 12 pesos= 1 dollar.At the end of the financial year the subsidiaries' financial statements need to be translated into the currency of the parent corporation.The current exchange rate is 10 pesos= 1 dollar.The subsidiaries' financial statement is translated into the currency of the parent corporation at the exchange rate of 12 pesos= 1 dollar.The above serves as an example of the _____ of foreign-currency translation.

Accepted Answer

A) hedging process 
B) current-rate method 
C) Monte Carlo method 
D) temporal method 
E) Markov process 
A) hedging process 
B) current-rate method 
C) Monte Carlo method 
D) temporal method 
E) Markov process

Question 8

In the United States and Great Britain, companies tend to rely more on banks for funding than on individual investors.

Accepted Answer

A) True 
 B)False

Question 9

Adopting different accounting standards makes it easier for investors or lenders to compare the financial health of two companies.

Accepted Answer

A) True 
 B)False

Question 10

The disadvantage of raising capital in equity markets is that the firm has to repay the money at a specific time and at a specific interest rate.

Accepted Answer

A) True 
 B)False

Question 11

Joan wants to buy a new loom for her weaving business.She applies to a bank for a loan of $50,000.It is a long-term loan that she intends to pay in five years time at a fixed interest rate.This is an example of:

Accepted Answer

A) debt financing. 
B) capital budgeting. 
C) equity financing. 
D) trade credit. 
E) multilateral netting. 
A) debt financing. 
B) capital budgeting. 
C) equity financing. 
D) trade credit. 
E) multilateral netting.

Question 12

The consolidated financial statement must reconcile all the investment and capital accounts as well as the firms' assets, liabilities, and operating accounts.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements holds true for capital budgeting?

Accepted Answer

A) It refers to the process of financing long-term outlays for major projects such as plant expansion, entry into new markets, or research and development. 
B) It refers to raising capital by borrowing the money and agreeing to repay the entire amount plus agreed-upon interest at a specific date in the future. 
C) It refers to raising capital by selling shares of stock. 
D) It refers to a set of procedures used to estimate the economic value of an owner's interest in a business. 
E) It refers to a technique that companies use to reduce the costs of cross-border payments between subsidiaries. 
A) It refers to the process of financing long-term outlays for major projects such as plant expansion, entry into new markets, or research and development. 
B) It refers to raising capital by borrowing the money and agreeing to repay the entire amount plus agreed-upon interest at a specific date in the future. 
C) It refers to raising capital by selling shares of stock. 
D) It refers to a set of procedures used to estimate the economic value of an owner's interest in a business. 
E) It refers to a technique that companies use to reduce the costs of cross-border payments between subsidiaries.

Question 14

In case of a _____ contract the firm will pay that rate specified at the beginning of the contract regardless of what the current exchange rate is at the date of the final settlement.

Accepted Answer

The answer of In case of a _____ contract the...

Question 15

Which of the following statements holds true for indirect tax?

Accepted Answer

A) It refers to the tax levied on the value of a property that the owner of the property is required to pay to the government of the country in which the property is located. 
B) It refers to the tax that is shifted to another person or entity, like the value-added tax (VAT), which is levied on the seller but is passed on and paid by buyer. 
C) It refers to the tax that is levied on the HYPERLINK "http://en.wikipedia.org/wiki/Income" \o "Income" income of individuals or businesses (corporations or other legal entities). 
D) It refers to the tax that is levied on the passing of HYPERLINK "http://en.wikipedia.org/wiki/Title_%28property%29" \o "Title (property)" title to HYPERLINK "http://en.wikipedia.org/wiki/Property" \o "Property" property from one person (or entity)to another. 
E) It refers to the HYPERLINK "http://en.wikipedia.org/wiki/Tax" \o "Tax" tax that is levied on and paid by the seller. 
A) It refers to the tax levied on the value of a property that the owner of the property is required to pay to the government of the country in which the property is located. 
B) It refers to the tax that is shifted to another person or entity, like the value-added tax (VAT), which is levied on the seller but is passed on and paid by buyer. 
C) It refers to the tax that is levied on the HYPERLINK "http://en.wikipedia.org/wiki/Income" \o "Income" income of individuals or businesses (corporations or other legal entities). 
D) It refers to the tax that is levied on the passing of HYPERLINK "http://en.wikipedia.org/wiki/Title_%28property%29" \o "Title (property)" title to HYPERLINK "http://en.wikipedia.org/wiki/Property" \o "Property" property from one person (or entity)to another. 
E) It refers to the HYPERLINK "http://en.wikipedia.org/wiki/Tax" \o "Tax" tax that is levied on and paid by the seller.

Question 16

Which of the following statements holds true for a consolidated financial statement?

Accepted Answer

A) It is a part of a nation's balance of payments that includes purchases and sales of assets, such as stocks, bonds, and land. 
B) It demonstrates that firms-that are legally separate from the parent and each other-are economically independent too. 
C) It is a statement part of a nation's balance of payments which includes the value of all goods and services imported and exported, as well as the payment and receipt of dividends and interest. 
D) It is a written, dated, and signed three-party instrument containing an unconditional order by a drawer that directs a drawee to pay a definite sum of money to a payee on demand or at a specified future date. 
E) It brings together all the financial statements of a parent and its subsidiaries into a single financial statement. 
A) It is a part of a nation's balance of payments that includes purchases and sales of assets, such as stocks, bonds, and land. 
B) It demonstrates that firms-that are legally separate from the parent and each other-are economically independent too. 
C) It is a statement part of a nation's balance of payments which includes the value of all goods and services imported and exported, as well as the payment and receipt of dividends and interest. 
D) It is a written, dated, and signed three-party instrument containing an unconditional order by a drawer that directs a drawee to pay a definite sum of money to a payee on demand or at a specified future date. 
E) It brings together all the financial statements of a parent and its subsidiaries into a single financial statement.

Question 17

Most of the developed nations require consolidated statements so that losses can't be hidden under an unconsolidated subsidiary.

Accepted Answer

A) True 
 B)False

Question 18

An interim step toward the United States adopting IFRS would be to permit US firms that operate globally to file only under IFRS, rather than under both GAAP and IFRS, thereby reducing their financial-statement preparation costs.

Accepted Answer

A) True 
 B)False

Question 19

What alternatives to interest and speculative investments are approved by Sharia?

Accepted Answer

There are approved alternatives to inter

Question 20

Investors and banks use financial statements to determine whether to invest in or loan capital to the firm.

Accepted Answer

A) True 
 B)False

Which of the following statements holds true for transnational financing?

_____ refers to all the stock exchanges worldwide where firms can buy and sell stock for financing an investment.

Which of the following statements holds true for a forward contract?

_____ refers to the organized trading of securities through exchanges.

Which of the following statements holds true for multilateral netting?

Which of the following statements holds true for a centralized financial organization structure?

In the United States and Great Britain, companies tend to rely more on banks for funding than on individual investors.

Adopting different accounting standards makes it easier for investors or lenders to compare the financial health of two companies.

The disadvantage of raising capital in equity markets is that the firm has to repay the money at a specific time and at a specific interest rate.

Joan wants to buy a new loom for her weaving business.She applies to a bank for a loan of $50,000.It is a long-term loan that she intends to pay in five years time at a fixed interest rate.This is an example of:

The consolidated financial statement must reconcile all the investment and capital accounts as well as the firms' assets, liabilities, and operating accounts.

Which of the following statements holds true for capital budgeting?

In case of a _____ contract the firm will pay that rate specified at the beginning of the contract regardless of what the current exchange rate is at the date of the final settlement.

Which of the following statements holds true for indirect tax?

Which of the following statements holds true for a consolidated financial statement?

Most of the developed nations require consolidated statements so that losses can't be hidden under an unconsolidated subsidiary.

An interim step toward the United States adopting IFRS would be to permit US firms that operate globally to file only under IFRS, rather than under both GAAP and IFRS, thereby reducing their financial-statement preparation costs.

What alternatives to interest and speculative investments are approved by Sharia?

Investors and banks use financial statements to determine whether to invest in or loan capital to the firm.

Introduction

International Trade and Foreign Direct Investment

Culture and Business

World Economies

Global and Regional Economic Cooperation and Integration

International Monetary System

Foreign Exchange and the Global Capital Markets

International Expansion and Global Market Opportunity Assessment

Exporting, Importing, and Global Sourcing

Strategy and International Business

Global Entrepreneurship and Intrapreneurship

Winning Through Effective, Global Talent Management

Harnessing the Engine of Global Innovation

Competing Effectively Through Global Marketing, Distribution, and Supply-Chain Management

Filters

Exam 15: Understanding the Roles of Finance and Accounting in Global Competitive Advantage

Which of the following statements holds true for transnational financing?

_____ refers to all the stock exchanges worldwide where firms can buy and sell stock for financing an investment.

Which of the following statements holds true for a forward contract?

_____ refers to the organized trading of securities through exchanges.

Which of the following statements holds true for multilateral netting?

Which of the following statements holds true for a centralized financial organization structure?

In the United States and Great Britain, companies tend to rely more on banks for funding than on individual investors.

Adopting different accounting standards makes it easier for investors or lenders to compare the financial health of two companies.

The disadvantage of raising capital in equity markets is that the firm has to repay the money at a specific time and at a specific interest rate.

Joan wants to buy a new loom for her weaving business.She applies to a bank for a loan of $50,000.It is a long-term loan that she intends to pay in five years time at a fixed interest rate.This is an example of:

The consolidated financial statement must reconcile all the investment and capital accounts as well as the firms' assets, liabilities, and operating accounts.

Which of the following statements holds true for capital budgeting?

In case of a _____ contract the firm will pay that rate specified at the beginning of the contract regardless of what the current exchange rate is at the date of the final settlement.

Which of the following statements holds true for indirect tax?

Which of the following statements holds true for a consolidated financial statement?

Most of the developed nations require consolidated statements so that losses can't be hidden under an unconsolidated subsidiary.

An interim step toward the United States adopting IFRS would be to permit US firms that operate globally to file only under IFRS, rather than under both GAAP and IFRS, thereby reducing their financial-statement preparation costs.

What alternatives to interest and speculative investments are approved by Sharia?

Investors and banks use financial statements to determine whether to invest in or loan capital to the firm.

Introduction

International Trade and Foreign Direct Investment

Culture and Business

World Economies

Global and Regional Economic Cooperation and Integration

International Monetary System

Foreign Exchange and the Global Capital Markets

International Expansion and Global Market Opportunity Assessment

Exporting, Importing, and Global Sourcing

Strategy and International Business

Global Entrepreneurship and Intrapreneurship

Winning Through Effective, Global Talent Management

Harnessing the Engine of Global Innovation

Competing Effectively Through Global Marketing, Distribution, and Supply-Chain Management

Filters