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

Liberalized credit terms involve the following costs EXCEPT

Accepted Answer

A) risk of default 
B) increased liquidity for the firm 
C) increased interest expense on the larger investment in receivables 
D) the deterioration of the value of accounts receivable denominated in buyer's currency 
A) risk of default 
B) increased liquidity for the firm 
C) increased interest expense on the larger investment in receivables 
D) the deterioration of the value of accounts receivable denominated in buyer's currency B

Question 3

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 lira 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 B

Question 4

Referring to question (The Apex Supplies Corporation needs to acquire €100 million in funds to expand their facilities.)  ,at 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 5

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 6

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 7

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 8

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 9

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 10

Consolidated Corporation requires C$50 million in funds.The banks 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 11

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

Question 12

Which of the following factors would NOT add value to centralized cash management?

Accepted Answer

A) tax differentials across countries 
B) violations of interest rate parity 
C) differences between borrowing and lending rates 
D) more freedom to local subsidiary project managers to handle local funds 
A) tax differentials across countries 
B) violations of interest rate parity 
C) differences between borrowing and lending rates 
D) more freedom to local subsidiary project managers to handle local funds

Question 13

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

Question 14

In an attempt to control an affiliate's cash reserves,corporate management may present local managers with interest rates for borrowing or lending funds that reflect the opportunity cost of money to the parent corporation.These interest rates are known as

Accepted Answer

A) imputed rates 
B) internal interest rates 
C) corporate prime rates 
D) LIBOR rates 
A) imputed rates 
B) internal interest rates 
C) corporate prime rates 
D) LIBOR rates

Question 15

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 16

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 17

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 18

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 19

Suppose that a firm located in Belgium in 1994 can borrow dollars at 8% or Belgium francs at 14%.If the Belgian franc is expected to depreciate from BF58 = $1 at the beginning of the year to BF61 = $1 at the end of the year,then the expected dollar cost of the Belgian franc loan is

Accepted Answer

A) 8.39% 
B) 20.14% 
C) 12.37% 
D) 9.15% 
A) 8.39% 
B) 20.14% 
C) 12.37% 
D) 9.15%

Question 20

A crucial means for companies to minimize delays in receipt of payments and in conversion of payments to cash is through the use of

Accepted Answer

A) correspondent banks 
B) letter of credit payments 
C) cable remittances 
D) lock boxes 
A) correspondent banks 
B) letter of credit payments 
C) cable remittances 
D) lock boxes

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

Liberalized credit terms involve the following costs EXCEPT

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 lira must Philips borrow to receive this amount if the loan is quoted on a discount basis?

Referring to question (The Apex Supplies Corporation needs to acquire €100 million in funds to expand their facilities.) ,at what end-of-year exchange rate will the dollar costs of borrowing Belgian francs or dollars be equal?

Treasurers of multinationals will likely demand more cash management services when

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

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

Netting can do all of the following EXCEPT

Companies can usually improve bank relations by

Consolidated Corporation requires C$50 million in funds.The banks 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?

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

Which of the following factors would NOT add value to centralized cash management?

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

In an attempt to control an affiliate's cash reserves,corporate management may present local managers with interest rates for borrowing or lending funds that reflect the opportunity cost of money to the parent corporation.These interest rates are known as

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

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?

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

Most U.S.international dollar payments are made via

Suppose that a firm located in Belgium in 1994 can borrow dollars at 8% or Belgium francs at 14%.If the Belgian franc is expected to depreciate from BF58 = $1 at the beginning of the year to BF61 = $1 at the end of the year,then the expected dollar cost of the Belgian franc loan is

A crucial means for companies to minimize delays in receipt of payments and in conversion of payments to cash is through the use of

Introduction

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 Analysis

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

International Financing and National Capital Markets

Functions of Euromarkets

The Cost of Capital for Foreign Investments

Examining International Portfolio Investing

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-Term Financing

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

Liberalized credit terms involve the following costs EXCEPT

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 lira must Philips borrow to receive this amount if the loan is quoted on a discount basis?

Referring to question (The Apex Supplies Corporation needs to acquire €100 million in funds to expand their facilities.) ,at what end-of-year exchange rate will the dollar costs of borrowing Belgian francs or dollars be equal?

Treasurers of multinationals will likely demand more cash management services when

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

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

Netting can do all of the following EXCEPT

Companies can usually improve bank relations by

Consolidated Corporation requires C$50 million in funds.The banks 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?

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

Which of the following factors would NOT add value to centralized cash management?

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

In an attempt to control an affiliate's cash reserves,corporate management may present local managers with interest rates for borrowing or lending funds that reflect the opportunity cost of money to the parent corporation.These interest rates are known as

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

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?

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

Most U.S.international dollar payments are made via

Suppose that a firm located in Belgium in 1994 can borrow dollars at 8% or Belgium francs at 14%.If the Belgian franc is expected to depreciate from BF58 = $1 at the beginning of the year to BF61 = $1 at the end of the year,then the expected dollar cost of the Belgian franc loan is

A crucial means for companies to minimize delays in receipt of payments and in conversion of payments to cash is through the use of

Introduction

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 Analysis

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

International Financing and National Capital Markets

Functions of Euromarkets

The Cost of Capital for Foreign Investments

Examining International Portfolio Investing

Corporate Strategy and Foreign Direct Investment

Capital Budgeting for the Multinational Corporation

Financing Foreign Trade

Managing the Multinational Financial System

Filters