Exam 19: International Managerial Finance

A bond that is initially sold primarily in countries other than the country of the currency in which the issue is denominated is called

The World Trade Organization is a new international body established to police world trading practices and to mediate disputes between member countries.

Fluctuations in foreign exchange markets can affect foreign revenues and profits of a multinational company, but they have no impact on its overall value.

A functional currency is the currency of the parent company's country.

A political risk that might affect all foreign firms in a host country is termed a ________ risk; a political risk that might affect only an individual firm or specific industry in a host country is termed a ________ risk.

Current U.S. tax laws require the consolidation of financial statements of subsidiaries according to the percentage of ownership by the parent company.

NAFTA is a treaty establishing free trade and open markets between Europe and the United States.

Macro political risk is the risk faced by all foreign firms in a host country related to political change, revolution, and the adoption of new policies of a government that may result in changes in ownership structure, closure or expropriation.

Comprehensive rules, regulations, and incentives aimed at regulating the inflow of direct foreign investments involving MNCs and at extracting more benefits from their presence are termed

FASB No. 52 is a statement issued by the Financial Accounting Standards Board requiring American MNCs to first convert the financial statement accounts of foreign subsidiaries into the country's ________ currency and then translate the accounts into the parent firm's currency using the ________ method.

The ________ is a major trade agreement signed by the United States and five Central American Countries.

Recent years have seen the emergence of a third path to political risk that encompasses "global" events such as terrorism, antiglobalization movements and protests, internet-based risks, and concerns over poverty, AIDS, and the environment, all of which affect various MNCs' operations worldwide.

The Euromarket is the international financial market that provides for borrowing and lending currencies outside their country of origin.

The first international capital market, a market with uniform rules and regulations governing major stock exchanges, was finally established and began operations in 2002

In the international context, the nominal interest rate is the stated interest rate charged on financing when only the MNC parent's currency is involved.

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 yet is 120 Yen per dollar, then what is the Euro per Yen exchange rate?

All of the following are factors that can influence the operations of an MNC EXCEPT

The World Trade Organization has in recent years admitted current and former communist countries as members including the Russian Federation and the Peoples Republic of China.

A Eurobond is

The existence of specific regulations and controls on dollar deposits in the United States, including interest rate ceiling imposed by the government, have contributed to the growth of the Euromarket.