Exam 1: Multinational Financial Management: An Overview

In some countries,bribes are commonplace.If a U.S.-based MNC decides to adhere to a strict code of ethics and not pay bribes,its subsidiary may be at a competitive disadvantage in the foreign country.

Although MNCs may need to convert currencies occasionally,they do not face any exchange rate risk,as exchange rates are stable over time.

For the MNC,agency costs are typically:

Which of the following is an example of direct foreign investment

Which of the following is not a provision or result of the Single European Act of 1987

The commonly accepted goal of the MNC is to:

Which of the following is not mentioned in the text as a constraint interfering with the MNC goal

A centralized management style,where major decisions about a foreign subsidiary are made by the parent company,results in an increase in agency costs.

Which of the following theories suggests that firms seek to penetrate new markets over time

Due to the risks involved in international business,firms should:

Which of the following theories identifies the nontransferability of resources as a reason for international business

According to the text,a disadvantage of licensing is that:

Which of the following is not mentioned in the text as an additional risk resulting from international business

Privatization is a venture that is jointly owned and operated by two or more firms.

Franchising is the process by which national governments sell state owned operations to corporations and other investors.

The imperfect markets theory states that factors of production are somewhat immobile,allowing firms to capitalize on a foreign country's resources.

A product cycle is the process by which a firm provides a specialized sales or service strategy,support assistance,and possibly an initial investment in the franchise in exchange for periodic fees.

Which of the following theories identifies specialization as a reason for international business

Which of the following is not a major event that increased international business opportunities in Europe

The Single European Act of 1987: