Question 1

Leading refers to paying for supplies earlier than necessary; lagging refers to delaying the payment for supplies.
​

Accepted Answer

A) True 
 B)False

Question 2

Preauthorized payment is an arrangement that allows a corporation to charge a customer's bank account up to some limit.

Accepted Answer

A) True 
 B)False

Question 3

Assume that interest rate parity holds. The U.S. one-year interest rate is 10 percent, and the Australian one-year interest rate is 8 percent. What will the approximate effective yield of a one-year deposit denominated in U.S. dollars be for an Australian citizen? (Assume the deposit is covered by a forward sale of dollars.)

Accepted Answer

A)  10 percent 
B)  8 percent 
C)  2 percent 
D)  This question cannot be answered without more information. 
A)  10 percent 
B)  8 percent 
C)  2 percent 
D)  This question cannot be answered without more information.

Question 4

To ____, MNCs can use preauthorized payments.​

Accepted Answer

A)  ​accelerate cash inflows 
B)  ​minimize currency conversion costs 
C)  ​manage blocked funds 
D)  ​manage intersubsidiary cash transfers 
A)  ​accelerate cash inflows 
B)  ​minimize currency conversion costs 
C)  ​manage blocked funds 
D)  ​manage intersubsidiary cash transfers

Question 5

Which of the following is not a technique to optimize cash flows?

Accepted Answer

A)  Accelerate cash inflows. 
B)  Minimize currency conversion costs. 
C)  Manage blocked funds. 
D)  All of these are techniques to optimize cash flows. 
A)  Accelerate cash inflows. 
B)  Minimize currency conversion costs. 
C)  Manage blocked funds. 
D)  All of these are techniques to optimize cash flows.

Question 6

The most useful measure of an MNC's liquidity is its:

Accepted Answer

A)  cash balance. 
B)  amount of securities held as investments. 
C)  political risk rating. 
D)  potential access to funds. 
A)  cash balance. 
B)  amount of securities held as investments. 
C)  political risk rating. 
D)  potential access to funds.

Question 7

In what is known as dynamic hedging, banks always hedge open positions in any foreign currencies.

Accepted Answer

A) True 
 B)False

Question 8

The Mexican one-year interest rate is 9 percent, while the U.S. one-year interest rate is 3 percent. Assume that interest rate parity exists. If a U.S. firm uses the forward rate to forecast the exchange rate of the peso in one year, the expected effective yield from investing in a one-year deposit in Mexico is:​

Accepted Answer

A)  ​12 percent. 
B)  ​9 percent. 
C)  ​3 percent. 
D)  ​6 percent. 
A)  ​12 percent. 
B)  ​9 percent. 
C)  ​3 percent. 
D)  ​6 percent.

Leading refers to paying for supplies earlier than necessary; lagging refers to delaying the payment for supplies.

Preauthorized payment is an arrangement that allows a corporation to charge a customer's bank account up to some limit.

To ____, MNCs can use preauthorized payments.

Which of the following is not a technique to optimize cash flows?

The most useful measure of an MNC's liquidity is its:

In what is known as dynamic hedging, banks always hedge open positions in any foreign currencies.

Multinational Financial Management: an Overview

International Flow of Funds

International Financial Markets

Exchange Rate Determination

Currency Derivatives

Government Influence on Exchange Rates

International Arbitrage and Interest Rate Parity

Relationships Among Inflation, Interest Rates, and Exchange Rates

Forecasting Exchange Rates

Measuring Exposure to Exchange Rate Fluctuations

Managing Transaction Exposure

Managing Economic Exposure and Translation Exposure

Direct Foreign Investment

Multinational Capital Budgeting

International Corporate Governance and Control

Country Risk Analysis

Multinational Capital Structure and Cost of Capital

Long-Term Debt Financing

Financing International Trade

Short-Term Financing

Filters

Exam 21: International Cash Management

Leading refers to paying for supplies earlier than necessary; lagging refers to delaying the payment for supplies. ​

Preauthorized payment is an arrangement that allows a corporation to charge a customer's bank account up to some limit.

To ____, MNCs can use preauthorized payments.​

Which of the following is not a technique to optimize cash flows?

The most useful measure of an MNC's liquidity is its:

In what is known as dynamic hedging, banks always hedge open positions in any foreign currencies.

Multinational Financial Management: an Overview

International Flow of Funds

International Financial Markets

Exchange Rate Determination

Currency Derivatives

Government Influence on Exchange Rates

International Arbitrage and Interest Rate Parity

Relationships Among Inflation, Interest Rates, and Exchange Rates

Forecasting Exchange Rates

Measuring Exposure to Exchange Rate Fluctuations

Managing Transaction Exposure

Managing Economic Exposure and Translation Exposure

Direct Foreign Investment

Multinational Capital Budgeting

International Corporate Governance and Control

Country Risk Analysis

Multinational Capital Structure and Cost of Capital

Long-Term Debt Financing

Financing International Trade

Short-Term Financing

Filters

Leading refers to paying for supplies earlier than necessary; lagging refers to delaying the payment for supplies.

To ____, MNCs can use preauthorized payments.