Question 1

Given the added risks associated with doing business abroad, companies should

Accepted Answer

A)  limit their foreign sales to less than 40% of total sales 
B)  limit their foreign assets to less than 30% of total assets 
C)  avoid foreign markets altogether unless they can earn a return in excess of the return they earn in their domestic market 
D)  not limit their foreign sales at all 
A)  limit their foreign sales to less than 40% of total sales 
B)  limit their foreign assets to less than 30% of total assets 
C)  avoid foreign markets altogether unless they can earn a return in excess of the return they earn in their domestic market 
D)  not limit their foreign sales at all D

Question 2

prime transmitter of global competitive forces is the

Accepted Answer

A)  public utility firm 
B)  financial management experience of the U.S. markets 
C)  the multinational corporation 
D)  the Federal Reserve System of the U.S. 
A)  public utility firm 
B)  financial management experience of the U.S. markets 
C)  the multinational corporation 
D)  the Federal Reserve System of the U.S. C

Question 3

defenders of multinationals believe that __________ are the appropriate reward for efficiently providing the global economy with products and services.

Accepted Answer

A)  profits 
B)  subsidies 
C)  tax holidays 
D)  low-interest, government-subsidized loans 
A)  profits 
B)  subsidies 
C)  tax holidays 
D)  low-interest, government-subsidized loans A

Question 4

a firm operates globally it offers advantages such as

Accepted Answer

A)  greater political power at home 
B)  bless taxes on its profits 
C)  greater negotiating power with foreign minority groups 
D)  greater negotiating power with labor unions 
A)  greater political power at home 
B)  bless taxes on its profits 
C)  greater negotiating power with foreign minority groups 
D)  greater negotiating power with labor unions

Question 5

According to Shapiro, if you were the CEO of a multinational corporation, which of the following would be MOST important to you in hiring a manager? One that

Accepted Answer

A)  Avoids risk at any price 
B)  Manages effectively the political environment of the subsidiary country 
C)  Anticipates every future disturbance related to the supply chain 
D)  Makes decisions that anticipates problems and provides solutions that enhances the firm's prospects for growth 
A)  Avoids risk at any price 
B)  Manages effectively the political environment of the subsidiary country 
C)  Anticipates every future disturbance related to the supply chain 
D)  Makes decisions that anticipates problems and provides solutions that enhances the firm's prospects for growth

Question 6

value of good financial management is ___________ in the global markets because of the much greater probability of market imperfections and multiple tax rates.

Accepted Answer

A)  minimized 
B)  neutralized 
C)  enhanced 
D)  arbitraged away 
A)  minimized 
B)  neutralized 
C)  enhanced 
D)  arbitraged away

Question 7

Which of the following theories identifies specialization as the main reason for international business activity?

Accepted Answer

A)  product life cycle theory of international trade 
B)  theory of diversification 
C)  doctrine of comparative advantage 
D)  theory of globalization 
A)  product life cycle theory of international trade 
B)  theory of diversification 
C)  doctrine of comparative advantage 
D)  theory of globalization

Question 8

____________ is defined as the purchase of assets or commodities on one market for immediate resale on another in order to profit form a price discrepancy.

Accepted Answer

A)  internationalization 
B)  arbitrage 
C)  financing 
D)  total risk 
A)  internationalization 
B)  arbitrage 
C)  financing 
D)  total risk

Question 9

___________ were the earliest multinationals.

Accepted Answer

A)  raw-material seekers 
B)  market seekers 
C)  cost minimizers 
D)  oil companies 
A)  raw-material seekers 
B)  market seekers 
C)  cost minimizers 
D)  oil companies

Question 10

Which one of the following is a consequence of increased global competition?

Accepted Answer

A)  the creation of new steel plants in the old industrial countries 
B)  the end of free-trade agreements between governments of the world 
C)  increased comfort level of trade unions with the consequences 
D)  increased anxiety among workers in the old industrial countries 
A)  the creation of new steel plants in the old industrial countries 
B)  the end of free-trade agreements between governments of the world 
C)  increased comfort level of trade unions with the consequences 
D)  increased anxiety among workers in the old industrial countries

Question 11

internationalization process tends to

Accepted Answer

A)  proceed in a preprogrammed series of steps 
B)  begin by licensing foreign producers 
C)  inevitably involve foreign production 
D)  often begin by accident 
A)  proceed in a preprogrammed series of steps 
B)  begin by licensing foreign producers 
C)  inevitably involve foreign production 
D)  often begin by accident

Question 12

Referring to the text, into which category of multinational is IBM most likely to fall?

Accepted Answer

A)  raw materials seeker 
B)  market seeker 
C)  cost minimizer 
D)  hedge fund 
A)  raw materials seeker 
B)  market seeker 
C)  cost minimizer 
D)  hedge fund

Question 13

Which of the following is an example of reverse foreign investment?

Accepted Answer

A)  Honda builds a factory in Ohio 
B)  Apple builds a plant in Ireland that exports to the United States 
C)  British Telecom issues new stock in the United States 
D)  American investors buy shares in Sony 
A)  Honda builds a factory in Ohio 
B)  Apple builds a plant in Ireland that exports to the United States 
C)  British Telecom issues new stock in the United States 
D)  American investors buy shares in Sony

Question 14

According to the capital asset pricing model

Accepted Answer

A)  only the systematic component of risk affects the required return 
B)  foreign investments whose returns are uncorrelated with the market's return should have a higher required return than comparable domestic investments 
C)  total risk of the investment is most relevant for small to medium-sized firms 
D)  diversification is secondary to risk levels of the investment 
A)  only the systematic component of risk affects the required return 
B)  foreign investments whose returns are uncorrelated with the market's return should have a higher required return than comparable domestic investments 
C)  total risk of the investment is most relevant for small to medium-sized firms 
D)  diversification is secondary to risk levels of the investment

Question 15

multinational financial system does NOT enable companies to

Accepted Answer

A)  avoid currency controls 
B)  reduce taxes 
C)  access lower cost financing sources 
D)  avoid exchange rate risk 
A)  avoid currency controls 
B)  reduce taxes 
C)  access lower cost financing sources 
D)  avoid exchange rate risk

Question 16

Historically, the primary motive for U.S. multinationals to produce abroad has been to

Accepted Answer

A)  lower costs 
B)  respond more quickly to the marketplace 
C)  avoid trade barriers 
D)  gain tax benefits 
A)  lower costs 
B)  respond more quickly to the marketplace 
C)  avoid trade barriers 
D)  gain tax benefits

Question 17

___________ are a recent category of multinationals that seek out and invest in lower cost production sites overseas.

Accepted Answer

A)  Cost minimizers 
B)  Market seekers 
C)  Raw-material seekers 
D)  High tech firms 
A)  Cost minimizers 
B)  Market seekers 
C)  Raw-material seekers 
D)  High tech firms

Question 18

International ________ can reduce the volatility of an investment portfolio because national financial markets tend to move independently of each other.

Accepted Answer

A)  arbitrage 
B)  centralization of the MNC's cash 
C)  diversification 
D)  investment 
A)  arbitrage 
B)  centralization of the MNC's cash 
C)  diversification 
D)  investment

Question 19

Critics of the multinational corporation would not fault its tendency to

Accepted Answer

A)  shift production from one location to another in search of lower costs 
B)  avoid taxes 
C)  cause balance of payments difficulties 
D)  engage in environmental protection measures 
A)  shift production from one location to another in search of lower costs 
B)  avoid taxes 
C)  cause balance of payments difficulties 
D)  engage in environmental protection measures

Question 20

___________ are the archetype of the modern multinational firm that goes overseas to produce and sell in foreign markets.

Accepted Answer

A)  cost minimizers 
B)  market seekers 
C)  raw-material seekers 
D)  whaling companies 
A)  cost minimizers 
B)  market seekers 
C)  raw-material seekers 
D)  whaling companies

Given the added risks associated with doing business abroad, companies should

prime transmitter of global competitive forces is the

defenders of multinationals believe that __________ are the appropriate reward for efficiently providing the global economy with products and services.

a firm operates globally it offers advantages such as

According to Shapiro, if you were the CEO of a multinational corporation, which of the following would be MOST important to you in hiring a manager? One that

value of good financial management is ___________ in the global markets because of the much greater probability of market imperfections and multiple tax rates.

Which of the following theories identifies specialization as the main reason for international business activity?

____________ is defined as the purchase of assets or commodities on one market for immediate resale on another in order to profit form a price discrepancy.

___________ were the earliest multinationals.

Which one of the following is a consequence of increased global competition?

internationalization process tends to

Referring to the text, into which category of multinational is IBM most likely to fall?

Which of the following is an example of reverse foreign investment?

According to the capital asset pricing model

multinational financial system does NOT enable companies to

Historically, the primary motive for U.S. multinationals to produce abroad has been to

___________ are a recent category of multinationals that seek out and invest in lower cost production sites overseas.

International ________ can reduce the volatility of an investment portfolio because national financial markets tend to move independently of each other.

Critics of the multinational corporation would not fault its tendency to

___________ are the archetype of the modern multinational firm that goes overseas to produce and sell in foreign markets.

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

Current Asset Management and Short Team Financing

Managing the Multinational Financial System

Filters

Exam 1: Introduction: Multinational Enterpriseand Multinational Financial Management

Given the added risks associated with doing business abroad, companies should

prime transmitter of global competitive forces is the

defenders of multinationals believe that __________ are the appropriate reward for efficiently providing the global economy with products and services.

a firm operates globally it offers advantages such as

According to Shapiro, if you were the CEO of a multinational corporation, which of the following would be MOST important to you in hiring a manager? One that

value of good financial management is ___________ in the global markets because of the much greater probability of market imperfections and multiple tax rates.

Which of the following theories identifies specialization as the main reason for international business activity?

____________ is defined as the purchase of assets or commodities on one market for immediate resale on another in order to profit form a price discrepancy.

___________ were the earliest multinationals.

Which one of the following is a consequence of increased global competition?

internationalization process tends to

Referring to the text, into which category of multinational is IBM most likely to fall?

Which of the following is an example of reverse foreign investment?

According to the capital asset pricing model

multinational financial system does NOT enable companies to

Historically, the primary motive for U.S. multinationals to produce abroad has been to

___________ are a recent category of multinationals that seek out and invest in lower cost production sites overseas.

International ________ can reduce the volatility of an investment portfolio because national financial markets tend to move independently of each other.

Critics of the multinational corporation would not fault its tendency to

___________ are the archetype of the modern multinational firm that goes overseas to produce and sell in foreign markets.

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

Current Asset Management and Short Team Financing

Managing the Multinational Financial System

Filters