Exam 19: International Managerial Finance

A functional currency is the currency of the host country in which a subsidiary primarily generates and expends cash and in which its accounts are maintained.

The potential risk of a host government's implementation of specific rules and regulations that can result in the discontinuity or seizure of the operations of a foreign company is called ________.

National entry control systems are comprehensive rules, regulations, and incentives introduced by host governments to regulate inflows of foreign direct investment from MNCs and at the same time extract more benefits from their presence.

Foreign bond is an international bond that is sold primarily in countries other than the country of the currency in which the issue is denominated.

National entry control systems are comprehensive rules, regulations, and immigration policies introduced by xenophobic host governments to regulate inflows of foreign workers.

The temporal method requires specific assets and liabilities to be translated at so-called historic exchange rates and that foreign-exchange translation gains or losses be reflected in the current year's income.

If the exchange rate between the U.S. dollar and the Euro is $1.20 per Euro and the exchange rate between the U.S. dollar and the Japanese yen is 120 Yen per dollar, then what is the Euro per Yen exchange rate?

NAFTA is an international financial market that provides for borrowing and lending currencies outside their country of origin.

The official melding of the national currencies of the European Union into one currency, the euro, created the European monetary union in 2002.

Hedging strategies are techniques used to offset or protect against risk and include borrowing or lending in different currencies.

In general, an international bond is one that is initially sold in the country of the borrower and, then, often distributed in home country.

Multinational companies are firms that have international assets but operations in domestic markets only and draw part of their total revenue and profits from such markets.

A Eurobond is ________.

The functional currency is the currency in which a business entity primarily generates and expends cash and in which its accounts are maintained.

The ________ is the taxation technique that increases the U.S. income of an MNC by the amount of foreign income (before foreign taxes). The U.S. tax calculation is then based on that higher level.

Accounting exposure is the risk resulting from the effects of changes in foreign exchange rates on the translated value of a firm's financial statement accounts denominated in a given foreign currency.

The all-current-rate method dictated by the FASB No. 52 statement requires the translation of all balance sheet accounts at the ________ rate and all income statement items at the ________ rates.

CAFTA is ________.

The risk resulting from the effects of changes in foreign exchange rates on the translated value of a firm's accounts denominated in a given foreign currency is ________.

The risk resulting from the effects of changes in foreign exchange rates on the firm's value is ________.