Exam 19: International Managerial Finance

Although several economic and political factors can influence foreign exchange rate movements, by far the most important explanation for long-term changes in exchange rates is a differing inflation rate between two countries.

The existence of ________ allows multinationals to take advantage of unregulated financial markets to invest and raise short-term funds in a variety of countries and to protect themselves from foreign exchange exposure.

Macro political risk and micro political risk in international business refer to the risk

Exchange rate risk hedging tools include Monte Carlo swaps, synthetic insurance contracts, and inventory swaps.

A joint venture is a partnership under which the participants have contractually agreed to contribute specified amounts of money and expertise in exchange for stated proportions of ownership and profit.

Because of their access to the international bond and equity markets, MNCs may have lower costs of various sources of long-term financing, thus resulting in differences between the capital structures of these firms and those of purely domestic companies.

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.

Foreign exchange risk refers to the risk created by

Exchange rate risk hedging tools include forward contracts, options, interest rate swaps, currency swaps, and hybrid securities.

Theory and empirical evidence indicate that the capital structures of multinational companies

The interest rates offered in the Euromarket on the U.S. dollar are greatly affected by the prime rate inside the United States.

The creation of international joint ventures has increased substantially during the past two decades.

When more units of a foreign currency are required to buy one dollar, the currency is said to have appreciated with respect to the dollar.

The ________ is a major South American trading bloc that includes countries that account for more than half of total Latin American GDP.

All of the following are considered offshore centers EXCEPT

Although several economic and political factors can influence foreign exchange rate movements, by far the most important explanation for long-term changes in exchange rates is fiscal policy that a country adopts.

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

For foreign bonds, interest rates are usually not directly correlated with the domestic rates prevailing in the respective countries.

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.

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