Question 1

Since a large percentage of multinational fund transfers are subsidiary-to-subsidiary, the payoff from __________ can be large.

Accepted Answer

A)  wire transfers 
B)  multiple bank accounts 
C)  multilateral netting 
D)  local cash management 
A)  wire transfers 
B)  multiple bank accounts 
C)  multilateral netting 
D)  local cash management C

Question 2

Which one of the following is NOT a wise guideline for globally managing the marketable securities portfolio of a multinational corporation?

Accepted Answer

A)  concentrate the instruments in the portfolio to one growth industry to maximize the yield for a given level of risk 
B)  review the portfolio daily to decide which securities should be sold 
C)  carefully consider opportunities for covered interest arbitrage 
D)  tailor the maturity of the investment to the firm's projected cash needs 
A)  concentrate the instruments in the portfolio to one growth industry to maximize the yield for a given level of risk 
B)  review the portfolio daily to decide which securities should be sold 
C)  carefully consider opportunities for covered interest arbitrage 
D)  tailor the maturity of the investment to the firm's projected cash needs A

Question 3

Which one of the following problems is NOT associated with bank relations?

Accepted Answer

A)  too many relations 
B)  high banking costs 
C)  inadequate reporting 
D)  accelerated clearings 
A)  too many relations 
B)  high banking costs 
C)  inadequate reporting 
D)  accelerated clearings D

Question 4

All of the following are major forms of bank financing EXCEPT

Accepted Answer

A)  overdrafts 
B)  factoring 
C)  discounting 
D)  term loans 
A)  overdrafts 
B)  factoring 
C)  discounting 
D)  term loans

Question 5

Most U.S. international dollar payments are made via

Accepted Answer

A)  Bankwire 
B)  CHIPS 
C)  FedWire 
D)  SWIFT 
A)  Bankwire 
B)  CHIPS 
C)  FedWire 
D)  SWIFT

Question 6

Netting can do all of the following EXCEPT

Accepted Answer

A)  reduce foreign exchange risk 
B)  reduce foreign exchange costs 
C)  reduce float 
D)  reduce cable charges 
A)  reduce foreign exchange risk 
B)  reduce foreign exchange costs 
C)  reduce float 
D)  reduce cable charges

Question 7

Companies can usually improve bank relations by

Accepted Answer

A)  increasing the number of banks it deals with so as to increase competition among them 
B)  decentralize cash management and allowing subsidiaries to negotiate better deals with more local banks 
C)  centralizing cash management in one or two banks 
D)  appointing a team of cash managers 
A)  increasing the number of banks it deals with so as to increase competition among them 
B)  decentralize cash management and allowing subsidiaries to negotiate better deals with more local banks 
C)  centralizing cash management in one or two banks 
D)  appointing a team of cash managers

Question 8

Referring to question 1at what end-of-year exchange rate will the dollar costs of borrowing Belgian francs or dollars be equal?

Accepted Answer

A)  BF63.1/$ 
B)  BF61.2/$ 
C)  BF56.3/$ 
D)  BF60.8/$ 
A)  BF63.1/$ 
B)  BF61.2/$ 
C)  BF56.3/$ 
D)  BF60.8/$

Question 9

Which of the following is NOT an advantage of a centralized international cash management program?

Accepted Answer

A)  Pools of excess liquidity are eliminated 
B)  Financing costs can be reduced 
C)  Information at the level of the operating unit is better utilized 
D)  Cash management is decentralized 
A)  Pools of excess liquidity are eliminated 
B)  Financing costs can be reduced 
C)  Information at the level of the operating unit is better utilized 
D)  Cash management is decentralized

Question 10

Which one of the following current assets do multinationals find it more difficult to control?

Accepted Answer

A)  cash 
B)  accounts receivable 
C)  overseas inventories 
D)  cash equivalents 
A)  cash 
B)  accounts receivable 
C)  overseas inventories 
D)  cash equivalents

Question 11

The Apex Supplies Corporation needs to acquire €100 million in funds to expand their facilities. The bank has offered them a discounted loan at 10% and a compensating balance of 6%. What is the effective interest rate on this loan?

Accepted Answer

A)  5.5% 
B)  7.8% 
C)  11.9% 
D)  14.5% 
A)  5.5% 
B)  7.8% 
C)  11.9% 
D)  14.5%

Question 12

Firms can minimize delays in receipt of payments and in conversion of payments into cash but NOT by using

Accepted Answer

A)  SWIFT 
B)  wire transfers 
C)  cash pooling 
D)  mobilization centers 
A)  SWIFT 
B)  wire transfers 
C)  cash pooling 
D)  mobilization centers

Question 13

Which one of the following noninterest costs is NOT associated with using commercial paper?

Accepted Answer

A)  licensing fees 
B)  backup lines of credit 
C)  fees to commercial banks 
D)  rating service fee 
A)  licensing fees 
B)  backup lines of credit 
C)  fees to commercial banks 
D)  rating service fee

Question 14

Pre-authorized payment can do all of the following for customers except

Accepted Answer

A)  increase disbursement float 
B)  reduce processing costs 
C)  eliminate mail costs 
D)  eliminate the possibility of skipping a payment 
A)  increase disbursement float 
B)  reduce processing costs 
C)  eliminate mail costs 
D)  eliminate the possibility of skipping a payment

Question 15

Consolidated Corporation requires C$50 million in funds. The bank has offered them a discounted loan at 8% with a compensating balance of 15%. How much must they borrow in order to net this amount?

Accepted Answer

A)  64,935,165 
B)  55,455,700 
C)  85, 985,005 
D)  35,097,555 
A)  64,935,165 
B)  55,455,700 
C)  85, 985,005 
D)  35,097,555

Question 16

By centralizing affiliate credit policy and monitoring collection performance, parents companies can do all of the following but NOT

Accepted Answer

A)  reduce the investment in receivables 
B)  reduce foreign exchange and other transaction costs 
C)  reduce banking fees 
D)  increase the rate of return on new subsidiary projects 
A)  reduce the investment in receivables 
B)  reduce foreign exchange and other transaction costs 
C)  reduce banking fees 
D)  increase the rate of return on new subsidiary projects

Question 17

Intel has the choice of borrowing dollars at or yen at 7% for one year. The current exchange rate is ¥152 = $At what end-of-year exchange rate would the yen costs of these two loans be equal?

Accepted Answer

A)  ¥156.0 = $1 
B)  ¥149.2 = $1 
C)  ¥153.6 = $1 
D)  ¥148.5 = $1 
A)  ¥156.0 = $1 
B)  ¥149.2 = $1 
C)  ¥153.6 = $1 
D)  ¥148.5 = $1

Question 18

Suppose that A sells $1 million monthly to subsidiary B and $monthly to subsidiary C, B sells $million monthly to A and $100,000 monthly to C, and C sells $600,000 monthly to A and $500,000 to B. Bilateral netting will reduce intercompany payment flows by _______, whereas multilateral netting will reduce these flows by _______.

Accepted Answer

A)  $2.0 million, $1.7 million 
B)  $3.2 million, $5.2 million 
C)  $1.4 million, $3.3 million 
D)  7 million, $2.7 million 
A)  $2.0 million, $1.7 million 
B)  $3.2 million, $5.2 million 
C)  $1.4 million, $3.3 million 
D)  7 million, $2.7 million

Question 19

Treasurers of multinationals will likely demand more cash management services when

Accepted Answer

A)  foreign exchange markets are relatively calm 
B)  foreign exchange transactions costs rise 
C)  inflation rates are relatively low 
D)  telecommunications costs rise 
A)  foreign exchange markets are relatively calm 
B)  foreign exchange transactions costs rise 
C)  inflation rates are relatively low 
D)  telecommunications costs rise

Question 20

It's 1998 and Philips N.V. requires Lit 500 million for one year. It can borrow from Banca di Roma at a 15% interest rate. How many liras must Philips borrow to receive this amount if the loan is quoted on a discount basis?

Accepted Answer

A)  Lit 667 million 
B)  Lit 588 million 
C)  Lit 435 million 
D)  Lit 556 million 
A)  Lit 667 million 
B)  Lit 588 million 
C)  Lit 435 million 
D)  Lit 556 million

Since a large percentage of multinational fund transfers are subsidiary-to-subsidiary, the payoff from __________ can be large.

Which one of the following is NOT a wise guideline for globally managing the marketable securities portfolio of a multinational corporation?

Which one of the following problems is NOT associated with bank relations?

All of the following are major forms of bank financing EXCEPT

Most U.S. international dollar payments are made via

Netting can do all of the following EXCEPT

Companies can usually improve bank relations by

Referring to question 1at what end-of-year exchange rate will the dollar costs of borrowing Belgian francs or dollars be equal?

Which of the following is NOT an advantage of a centralized international cash management program?

Which one of the following current assets do multinationals find it more difficult to control?

The Apex Supplies Corporation needs to acquire €100 million in funds to expand their facilities. The bank has offered them a discounted loan at 10% and a compensating balance of 6%. What is the effective interest rate on this loan?

Firms can minimize delays in receipt of payments and in conversion of payments into cash but NOT by using

Which one of the following noninterest costs is NOT associated with using commercial paper?

Pre-authorized payment can do all of the following for customers except

Consolidated Corporation requires C$50 million in funds. The bank has offered them a discounted loan at 8% with a compensating balance of 15%. How much must they borrow in order to net this amount?

By centralizing affiliate credit policy and monitoring collection performance, parents companies can do all of the following but NOT

Intel has the choice of borrowing dollars at or yen at 7% for one year. The current exchange rate is ¥152 = $At what end-of-year exchange rate would the yen costs of these two loans be equal?

Treasurers of multinationals will likely demand more cash management services when

It's 1998 and Philips N.V. requires Lit 500 million for one year. It can borrow from Banca di Roma at a 15% interest rate. How many liras must Philips borrow to receive this amount if the loan is quoted on a discount basis?

Introduction: Multinational Enterpriseand Multinational Financial Management

The Determination of Exchange Rates

The International Monetary System

Parity Conditions in International Finance and Currency Forecasting

The Balance of Payments and International Economic Linkages

Country Risk Anaylsis

The Foreign Exchange Markets

Currency Futures and Options Markets

Swaps and Interest Rate Derivatives

Measuring and Managing Translation and Transaction Exposure

Measuring and Managing Economic Exposure

International Financing and National Capital Market

The Euromarkets

The Cost of Capital for Foreign Investment

International Portfolio Investment

Corporate Strategy and Foreign Direct Investment

Capital Budgeting for the Multinational Corporation

Financing Foreign Trade

Managing the Multinational Financial System

Filters

Exam 19: Current Asset Management and Short Team Financing

Since a large percentage of multinational fund transfers are subsidiary-to-subsidiary, the payoff from __________ can be large.

Which one of the following is NOT a wise guideline for globally managing the marketable securities portfolio of a multinational corporation?

Which one of the following problems is NOT associated with bank relations?

All of the following are major forms of bank financing EXCEPT

Most U.S. international dollar payments are made via

Netting can do all of the following EXCEPT

Companies can usually improve bank relations by

Referring to question 1at what end-of-year exchange rate will the dollar costs of borrowing Belgian francs or dollars be equal?

Which of the following is NOT an advantage of a centralized international cash management program?

Which one of the following current assets do multinationals find it more difficult to control?

The Apex Supplies Corporation needs to acquire €100 million in funds to expand their facilities. The bank has offered them a discounted loan at 10% and a compensating balance of 6%. What is the effective interest rate on this loan?

Firms can minimize delays in receipt of payments and in conversion of payments into cash but NOT by using

Which one of the following noninterest costs is NOT associated with using commercial paper?

Pre-authorized payment can do all of the following for customers except

Consolidated Corporation requires C$50 million in funds. The bank has offered them a discounted loan at 8% with a compensating balance of 15%. How much must they borrow in order to net this amount?

By centralizing affiliate credit policy and monitoring collection performance, parents companies can do all of the following but NOT

Intel has the choice of borrowing dollars at or yen at 7% for one year. The current exchange rate is ¥152 = $At what end-of-year exchange rate would the yen costs of these two loans be equal?

Treasurers of multinationals will likely demand more cash management services when

It's 1998 and Philips N.V. requires Lit 500 million for one year. It can borrow from Banca di Roma at a 15% interest rate. How many liras must Philips borrow to receive this amount if the loan is quoted on a discount basis?

Introduction: Multinational Enterpriseand Multinational Financial Management

The Determination of Exchange Rates

The International Monetary System

Parity Conditions in International Finance and Currency Forecasting

The Balance of Payments and International Economic Linkages

Country Risk Anaylsis

The Foreign Exchange Markets

Currency Futures and Options Markets

Swaps and Interest Rate Derivatives

Measuring and Managing Translation and Transaction Exposure

Measuring and Managing Economic Exposure

International Financing and National Capital Market

The Euromarkets

The Cost of Capital for Foreign Investment

International Portfolio Investment

Corporate Strategy and Foreign Direct Investment

Capital Budgeting for the Multinational Corporation

Financing Foreign Trade

Managing the Multinational Financial System

Filters