Exam 19: The Multinational Finance Function

Another source of financing,in which an investor takes an ownership position in return for shares of stock in the company and the promises of capital gains,is called debt financing.

An economic exposure does not result in a change in future cash flows.

A major problem with MNEs using offshore financial centers is that they may give unfair tax advantages to companies.

Tax law variations around the world affect an MNE's capital budgeting,financing,and method of setting transfer prices.

The Eurocurrency market is a retail,rather than wholesale,market.

The effect of an exchange-rate change on the financial statements of a foreign subsidiary ________.

Equity financing is the degree to which a firm funds the growth of a business by debt.

What is multilateral netting? What are the advantages of multilateral netting?

The stock market is also known as the ________.

A major challenge to Global Positioning Systems in providing foreign exchange services to its clients is that ________.

Diego is a Brazilian mining company that has operations in Canada. Currently,the Canadian dollar is falling against the Brazilian real. Which of the following will most likely occur?

The principle by which the tax authorities allow firms to reduce their tax liability by the amount of income taxes paid to a foreign government is known as a tax credit.

Acquiring and allocating financial resources among the company's activities and projects is the responsibility of the ________.

A situation in which several banks pool resources in the Eurocurrency market to extend credit to a borrower and spread the risk is known as ________.

LIBOR is best defined as the ________.

Which of the following is NOT an advantage associated with Eurocurrencies?

Foreign branch income is ________.

An ADR is a negotiable certificate issued by a U.S. bank in the United States to represent the underlying shares of a foreign corporation's stock held at a custodian bank in the foreign country.

A hedging instrument that allows one to establish a fixed exchange rate for future transactions where delivery is required is a(n)________.

When Sistema,a Russian company,issued a U.S. dollar stock offering in London,its shares were classified as a(n)________.