Question 1

The appropriate split of liquid balances between cash and marketable securities depends on all but

Accepted Answer

A) interest rates 
B) costs of buying and selling securities 
C) the variability of cash flows 
D) the existence of foreign exchange risk 
A) interest rates 
B) costs of buying and selling securities 
C) the variability of cash flows 
D) the existence of foreign exchange risk

Question 2

One of the principal goals of the cash manager is participating in the establishment of an affiliate's credit policy and monitoring of collection performance in order to minimize

Accepted Answer

A) credit defaults 
B) float 
C) transaction costs 
D) slow payments 
A) credit defaults 
B) float 
C) transaction costs 
D) slow payments

Question 3

Which one of the following types of wire transfers is probably the fastest method to remit payment but is plagued with efficiency challenges globally?

Accepted Answer

A) bank-to-bank 
B) subsidiary-to-subsidiary 
C) U.S.bank 
D) U.K.bank 
A) bank-to-bank 
B) subsidiary-to-subsidiary 
C) U.S.bank 
D) U.K.bank

Question 4

One of the cash manager's greatest problems is that ____________ wire transfers do not always operate with great efficiency globally.

Accepted Answer

A) bank-to-bank 
B) subsidiary-to-subsidiary 
C) U.S.bank 
D) U.K.bank 
A) bank-to-bank 
B) subsidiary-to-subsidiary 
C) U.S.bank 
D) U.K.bank

Question 5

Why has the commercial paper market been dominated by the largest and most creditworthy firms?

Accepted Answer

A) commercial paper bears only the name of the issuer and is unsecured 
B) the largest companies can afford the flotation costs 
C) credit reporting agencies screen out smaller firms 
D) commercial paper is issued at a discount 
A) commercial paper bears only the name of the issuer and is unsecured 
B) the largest companies can afford the flotation costs 
C) credit reporting agencies screen out smaller firms 
D) commercial paper is issued at a discount

Question 6

Which one of the following is a key element of international cash management both within a foreign country and across borders?

Accepted Answer

A) accelerating collections 
B) lagging payments 
C) reducing customs delays 
D) greater expertise in cash and portfolio management 
A) accelerating collections 
B) lagging payments 
C) reducing customs delays 
D) greater expertise in cash and portfolio management

Question 7

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 8

Allied Products has been offered a one-year loan of £100,000 at 14%,payable at maturity.What is the effective pound interest rate on Allied's loan?

Accepted Answer

A) 14.0% 
B) 17.5% 
C) 15.2% 
D) 18.3% 
A) 14.0% 
B) 17.5% 
C) 15.2% 
D) 18.3%

Question 9

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 10

Suppose it is May 1985 and the current value of the Greek drachma is Dr 1 = $0.006369,but the expected spot rate 90 days hence is Dr 1 = $0.005980.What is the value of a sales order of Dr 50 million sold on 90-day terms?

Accepted Answer

A) $318,450 
B) $562,491 
C) $299,000 
D) 5,430 
A) $318,450 
B) $562,491 
C) $299,000 
D) 5,430

Question 11

Intel has the choice of borrowing dollars at 9.5% or yen at 7% for one year.The current exchange rate is ¥152 = $1.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 12

Suppose that A sells $1 million monthly to subsidiary B and $1.5 monthly to subsidiary C,B sells $2.2 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 13

SCI borrows SFr 1.5 million from Credit Suisse for one year at 12% interest.Interest is prepaid.What is the effective SFr interest rate on SCI's loan?

Accepted Answer

A) 14.52% 
B) 13.64% 
C) 16.44% 
D) 21.22% 
A) 14.52% 
B) 13.64% 
C) 16.44% 
D) 21.22%

Question 14

What of the following reasons has NOT been cited as the root cause of inventory stockpiling by subsidiaries of multinationals?

Accepted Answer

A) long delivery lead times 
B) currency restrictions 
C) customs delays 
D) pegging the currency's exchange rate 
A) long delivery lead times 
B) currency restrictions 
C) customs delays 
D) pegging the currency's exchange rate

Question 15

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

The appropriate split of liquid balances between cash and marketable securities depends on all but

One of the principal goals of the cash manager is participating in the establishment of an affiliate's credit policy and monitoring of collection performance in order to minimize

Which one of the following types of wire transfers is probably the fastest method to remit payment but is plagued with efficiency challenges globally?

One of the cash manager's greatest problems is that ____________ wire transfers do not always operate with great efficiency globally.

Why has the commercial paper market been dominated by the largest and most creditworthy firms?

Which one of the following is a key element of international cash management both within a foreign country and across borders?

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

Allied Products has been offered a one-year loan of £100,000 at 14%,payable at maturity.What is the effective pound interest rate on Allied's loan?

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

Suppose it is May 1985 and the current value of the Greek drachma is Dr 1 = $0.006369,but the expected spot rate 90 days hence is Dr 1 = $0.005980.What is the value of a sales order of Dr 50 million sold on 90-day terms?

Intel has the choice of borrowing dollars at 9.5% or yen at 7% for one year.The current exchange rate is ¥152 = $1.At what end-of-year exchange rate would the yen costs of these two loans be equal?

SCI borrows SFr 1.5 million from Credit Suisse for one year at 12% interest.Interest is prepaid.What is the effective SFr interest rate on SCI's loan?

What of the following reasons has NOT been cited as the root cause of inventory stockpiling by subsidiaries of multinationals?

All of the following are major forms of bank financing EXCEPT

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

The appropriate split of liquid balances between cash and marketable securities depends on all but

One of the principal goals of the cash manager is participating in the establishment of an affiliate's credit policy and monitoring of collection performance in order to minimize

Which one of the following types of wire transfers is probably the fastest method to remit payment but is plagued with efficiency challenges globally?

One of the cash manager's greatest problems is that ____________ wire transfers do not always operate with great efficiency globally.

Why has the commercial paper market been dominated by the largest and most creditworthy firms?

Which one of the following is a key element of international cash management both within a foreign country and across borders?

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

Allied Products has been offered a one-year loan of £100,000 at 14%,payable at maturity.What is the effective pound interest rate on Allied's loan?

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

Suppose it is May 1985 and the current value of the Greek drachma is Dr 1 = $0.006369,but the expected spot rate 90 days hence is Dr 1 = $0.005980.What is the value of a sales order of Dr 50 million sold on 90-day terms?

Intel has the choice of borrowing dollars at 9.5% or yen at 7% for one year.The current exchange rate is ¥152 = $1.At what end-of-year exchange rate would the yen costs of these two loans be equal?

SCI borrows SFr 1.5 million from Credit Suisse for one year at 12% interest.Interest is prepaid.What is the effective SFr interest rate on SCI's loan?

What of the following reasons has NOT been cited as the root cause of inventory stockpiling by subsidiaries of multinationals?

All of the following are major forms of bank financing EXCEPT

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