Question 1

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 C

Question 2

___________ 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 C

Question 3

The primary objective of the multinational corporation is to

Accepted Answer

A)  maximize shareholder wealth 
B)  maximize world production 
C)  minimize debt 
D)  minimize the cost of doing business globally 
A)  maximize shareholder wealth 
B)  maximize world production 
C)  minimize debt 
D)  minimize the cost of doing business globally C

Question 4

Which one of the following provides strong evidence that internationalization continues to grow in the world economy?

Accepted Answer

A)  import restrictions by the Bush Administration on foreign steel 
B)  efforts suggested by politicians to restrict the sourcing of foreign products by locally headquartered multinationals 
C)  the growing volume of foreign direct investment by U.S. as well as other multinational companies 
D)  pressure on governments to embargo unfriendly nations 
A)  import restrictions by the Bush Administration on foreign steel 
B)  efforts suggested by politicians to restrict the sourcing of foreign products by locally headquartered multinationals 
C)  the growing volume of foreign direct investment by U.S. as well as other multinational companies 
D)  pressure on governments to embargo unfriendly nations

Question 5

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 6

The ___________ 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

Question 7

The internationalization process most likely tends to

Accepted Answer

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

Question 8

Which of the following is NOT a failing of the theory of comparative advantage?

Accepted Answer

A)  it ignores the role of uncertainty and economies of scale 
B)  it assumes that factors of production are relatively immobile 
C)  it assumes that there are no differentiated products 
D)  it deals with trade only differentiate rather than undifferentiated products 
A)  it ignores the role of uncertainty and economies of scale 
B)  it assumes that factors of production are relatively immobile 
C)  it assumes that there are no differentiated products 
D)  it deals with trade only differentiate rather than undifferentiated products

Question 9

For the multinational corporation, which one of the following complements to the integration of world wide operations is MOST critical?

Accepted Answer

A)  flexibility 
B)  adaptability 
C)  speed 
D)  economies of scale of distribution 
A)  flexibility 
B)  adaptability 
C)  speed 
D)  economies of scale of distribution

Question 10

Into which category of multinational is IBM most likely to fall?

Accepted Answer

A)  raw materials seeker 
B)  market seeker 
C)  cost minimizer 
D)  all of the above 
A)  raw materials seeker 
B)  market seeker 
C)  cost minimizer 
D)  all of the above

Question 11

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 12

According to the efficient market hypothesis, which one of the following is NOT correct?

Accepted Answer

A)  markets place a premium on the future 
B)  today's stock price is the best predictor of tomorrow's stock price 
C)  stock prices reflect all available information 
D)  today's stock price incorporates the past history of prices 
A)  markets place a premium on the future 
B)  today's stock price is the best predictor of tomorrow's stock price 
C)  stock prices reflect all available information 
D)  today's stock price incorporates the past history of prices

Question 13

Which of the following is an example of reverse foreign investment for the U.S.?

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

Multinational firms would most likely be

Accepted Answer

A)  riskier than purely domestic firms because of the exposures of operating abroad 
B)  less risky than purely domestic firms because of international diversification 
C)  less risky than domestic firms if the added risks of operating overseas are more than offset by the ability to operate in nations whose economic cycles are not perfectly in phase 
D)  invested in developed countries only and avoid developing economies 
A)  riskier than purely domestic firms because of the exposures of operating abroad 
B)  less risky than purely domestic firms because of international diversification 
C)  less risky than domestic firms if the added risks of operating overseas are more than offset by the ability to operate in nations whose economic cycles are not perfectly in phase 
D)  invested in developed countries only and avoid developing economies

Question 15

___________ 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 16

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 17

The multinational financial system enables companies to

Accepted Answer

A)  avoid currency controls 
B)  reduce taxes 
C)  access lower cost financing sources 
D)  all of the above 
A)  avoid currency controls 
B)  reduce taxes 
C)  access lower cost financing sources 
D)  all of the above

Question 18

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

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

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

The primary objective of the multinational corporation is to

Which one of the following provides strong evidence that internationalization continues to grow in the world economy?

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

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

The internationalization process most likely tends to

Which of the following is NOT a failing of the theory of comparative advantage?

For the multinational corporation, which one of the following complements to the integration of world wide operations is MOST critical?

Into which category of multinational is IBM most likely to fall?

According to the capital asset pricing model

According to the efficient market hypothesis, which one of the following is NOT correct?

Which of the following is an example of reverse foreign investment for the U.S.?

Multinational firms would most likely be

___________ were the earliest multinationals.

Critics of the multinational corporation would NOT fault its tendency to

The multinational financial system enables companies to

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

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

The Foreign Exchange Market

Currency Futures and Options Markets

Swaps and Interest Rate Derivatives

Measuring and Managing Translation and Transaction Exposure

Measuring and Managing Economic Exposure

Country Risk Analysis

International Financing and National Capital Markets

International Portfolio Investment

Capital Budgeting for the Multinational Corporation

Financing Foreign Trade

Managing the Multinational Financial System

Filters

Exam 1: Introduction: Multinational Enterprise and Multinational Financial Management

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

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

The primary objective of the multinational corporation is to

Which one of the following provides strong evidence that internationalization continues to grow in the world economy?

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

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

The internationalization process most likely tends to

Which of the following is NOT a failing of the theory of comparative advantage?

For the multinational corporation, which one of the following complements to the integration of world wide operations is MOST critical?

Into which category of multinational is IBM most likely to fall?

According to the capital asset pricing model

According to the efficient market hypothesis, which one of the following is NOT correct?

Which of the following is an example of reverse foreign investment for the U.S.?

Multinational firms would most likely be

___________ were the earliest multinationals.

Critics of the multinational corporation would NOT fault its tendency to

The multinational financial system enables companies to

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

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

The Foreign Exchange Market

Currency Futures and Options Markets

Swaps and Interest Rate Derivatives

Measuring and Managing Translation and Transaction Exposure

Measuring and Managing Economic Exposure

Country Risk Analysis

International Financing and National Capital Markets

International Portfolio Investment

Capital Budgeting for the Multinational Corporation

Financing Foreign Trade

Managing the Multinational Financial System

Filters