Question 1

Capital market segmentation is a financial market imperfection caused mainly by ________.

Accepted Answer

A) government constraints 
B) institutional practices 
C) investor perceptions 
D) all of the above 
A) government constraints 
B) institutional practices 
C) investor perceptions 
D) all of the above

Question 2

The weighted average cost of capital (WACC)is

Accepted Answer

A) the required rate of return for all of a firm's capital investment projects. 
B) the required rate of return for a firm's average risk projects. 
C) not applicable for use by MNE. 
D) equal to 13%. 
A) the required rate of return for all of a firm's capital investment projects. 
B) the required rate of return for a firm's average risk projects. 
C) not applicable for use by MNE. 
D) equal to 13%.

Question 3

A MNEs marginal cost of capital is constant for considerable ranges in its capital budget, but this statement cannot be made for most domestic firms.

Accepted Answer

A) True 
 B)False

Question 4

According to your authors, diversifying cash flows internationally may help MNEs reduce the variability of cash flows because

Accepted Answer

A) of a lack of competition among international firms. 
B) of an offset to cash flow variability caused by exchange rate variability. 
C) returns are not perfectly correlated between countries. 
D) none of the above 
A) of a lack of competition among international firms. 
B) of an offset to cash flow variability caused by exchange rate variability. 
C) returns are not perfectly correlated between countries. 
D) none of the above

Question 5

If all capital markets are fully integrated, securities of comparable expected return and risk should have the same required rate of return in each national market after adjusting for ________.

Accepted Answer

A) time of day and language requirements 
B) political risk and time lags 
C) foreign exchange risk and political risk 
D) foreign exchange risk and the spot rate 
A) time of day and language requirements 
B) political risk and time lags 
C) foreign exchange risk and political risk 
D) foreign exchange risk and the spot rate

Question 6

The opportunity set of projects is typically smaller for MNEs than for purely domestic firms because international markets are typically specialized niches.

Accepted Answer

A) True 
 B)False

Capital market segmentation is a financial market imperfection caused mainly by ________.

The weighted average cost of capital (WACC)is

A MNEs marginal cost of capital is constant for considerable ranges in its capital budget, but this statement cannot be made for most domestic firms.

According to your authors, diversifying cash flows internationally may help MNEs reduce the variability of cash flows because

If all capital markets are fully integrated, securities of comparable expected return and risk should have the same required rate of return in each national market after adjusting for ________.

The opportunity set of projects is typically smaller for MNEs than for purely domestic firms because international markets are typically specialized niches.

Globalization and the Multinational Enterprise

Financial Goals and Corporate Governance

The International Monetary System

The Balance of Payments

Current Multinational Financial Challenges: the Credit Crisis of 2007-2009

The Foreign Exchange Market

International Parity Conditions

Foreign Currency Derivatives

Interest Rate and Currency Swaps

Foreign Exchange Rate Determination and Forecasting

Transaction Exposure

Operating Exposure

Translation Exposure

Sourcing Equity Globally

Sourcing Debt Globally

International Portfolio Theory and Diversification

Foreign Direct Investment Theory and Political Risk

Multinational Capital Budgeting

Multinational Tax Management

Working Capital Management

International Trade Finance

Filters

Exam 14: The Global Cost and Availability of Capital

Capital market segmentation is a financial market imperfection caused mainly by ________.

The weighted average cost of capital (WACC)is

A MNEs marginal cost of capital is constant for considerable ranges in its capital budget, but this statement cannot be made for most domestic firms.

According to your authors, diversifying cash flows internationally may help MNEs reduce the variability of cash flows because

If all capital markets are fully integrated, securities of comparable expected return and risk should have the same required rate of return in each national market after adjusting for ________.

The opportunity set of projects is typically smaller for MNEs than for purely domestic firms because international markets are typically specialized niches.

Globalization and the Multinational Enterprise

Financial Goals and Corporate Governance

The International Monetary System

The Balance of Payments

Current Multinational Financial Challenges: the Credit Crisis of 2007-2009

The Foreign Exchange Market

International Parity Conditions

Foreign Currency Derivatives

Interest Rate and Currency Swaps

Foreign Exchange Rate Determination and Forecasting

Transaction Exposure

Operating Exposure

Translation Exposure

Sourcing Equity Globally

Sourcing Debt Globally

International Portfolio Theory and Diversification

Foreign Direct Investment Theory and Political Risk

Multinational Capital Budgeting

Multinational Tax Management

Working Capital Management

International Trade Finance

Filters