Question 1

Equity financing comes from ________.

Accepted Answer

A)  foreign bonds 
B)  domestic bonds 
C)  capital by selling stocks 
D)  Eurocurrency market 
A)  foreign bonds 
B)  domestic bonds 
C)  capital by selling stocks 
D)  Eurocurrency market

Question 2

Economic exposure results from exchange-rate fluctuations that affect ________.

Accepted Answer

A)  marketing strategies 
B)  tariffs and duties 
C)  brand personality 
D)  product pricing and inputs and the value of foreign investments 
A)  marketing strategies 
B)  tariffs and duties 
C)  brand personality 
D)  product pricing and inputs and the value of foreign investments

Question 3

In passive hedging, the firm frequently reviews total exposure and hedges only a subset of its total exposures, usually those that pose the greatest risk.

Accepted Answer

A) True 
 B)False

Question 4

Discuss two reasons why a nation might NOT consider a firm's high debt ratio a risky approach to international business.

Accepted Answer

The riskiness of debt is perceived diffe

Question 5

Which of the following is applied when an American tourist exchanges dollars for the immediate receipt of Japanese yen at a Tokyo bank?

Accepted Answer

A)  the forward rate 
B)  the spot rate 
C)  the discount rate 
D)  the prime rate 
A)  the forward rate 
B)  the spot rate 
C)  the discount rate 
D)  the prime rate

Question 6

Freedom Energy Group (Scenario)
Freedom Energy Group (FEG) is a major American energy services group based in Oklahoma. FEG manufactures products to facilitate oil and gas exploration and is involved in the construction of oil refineries and gas pipelines around the world. FEG managers are considering the purchase of a Canadian energy firm, Maple Leaf Energy, which manufactures pipeline stabilization products. The financial management division of FEG is considering the risks and benefits of purchasing Maple Leaf.
-Which of the following should most likely be considered by financial managers before FEG purchases Maple Leaf?

Accepted Answer

A)  How will environmentalists react to the purchase of Maple Leaf by FEG? 
B)  Should FEG integrate the Maple Leaf logo into the FEG marketing campaign? 
C)  What is the best way for FEG to manage currency fluctuation between U.S. dollars and Canadian dollars? 
D)  How will NAFTA affect the legal negotiations between FEG and Maple Leaf? 
A)  How will environmentalists react to the purchase of Maple Leaf by FEG? 
B)  Should FEG integrate the Maple Leaf logo into the FEG marketing campaign? 
C)  What is the best way for FEG to manage currency fluctuation between U.S. dollars and Canadian dollars? 
D)  How will NAFTA affect the legal negotiations between FEG and Maple Leaf?

Question 7

________ estimates future cash flows from the project in the functional currency of the parent-that is, the currency of the primary economic environment in which it operates.

Accepted Answer

A)  Project's perspective 
B)  Parent's perspective 
C)  Passive hedging 
D)  Active hedging 
A)  Project's perspective 
B)  Parent's perspective 
C)  Passive hedging 
D)  Active hedging

Question 8

What is the rate of exchange quoted by a financial institution for delivery of a currency within 48 hours?

Accepted Answer

A)  spot rate 
B)  prime rate 
C)  direct quote 
D)  repo rate 
A)  spot rate 
B)  prime rate 
C)  direct quote 
D)  repo rate

Question 9

When Toyota sells yen-denominated bonds in the United States, it is issuing Eurobonds.

Accepted Answer

A) True 
 B)False

Question 10

________ are currency traders who seek to minimize their risk of exchange-rate fluctuations, often by entering into forward contracts or similar financial instruments.

Accepted Answer

A)  Venture capitalists 
B)  Arbitragers 
C)  Hedgers 
D)  Speculators 
A)  Venture capitalists 
B)  Arbitragers 
C)  Hedgers 
D)  Speculators

Question 11

Net working capital is ________.

Accepted Answer

A)  the combined total of a firm's equity capital and net losses 
B)  the difference between a firm's current assets and current liabilities 
C)  the difference between a firm's expected profits and current debts 
D)  any currency deposited in a bank outside its country of origin 
A)  the combined total of a firm's equity capital and net losses 
B)  the difference between a firm's current assets and current liabilities 
C)  the difference between a firm's expected profits and current debts 
D)  any currency deposited in a bank outside its country of origin

Question 12

Debt financing comes from ________.

Accepted Answer

A)  personal savings of founders 
B)  loans from financial intermediaries 
C)  capital contributed by founders 
D)  selling shares of stock to investors 
A)  personal savings of founders 
B)  loans from financial intermediaries 
C)  capital contributed by founders 
D)  selling shares of stock to investors

Question 13

Which of the following is a debt instrument that specifies the timing of principal and interest payments?

Accepted Answer

A)  stock 
B)  bond 
C)  share 
D)  equity 
A)  stock 
B)  bond 
C)  share 
D)  equity

Question 14

The NYSE and the NASDAQ Stock Market are the largest in terms of volumes of shares traded.

Accepted Answer

A) True 
 B)False

Question 15

Funding obtained from sources inside a firm is known as ________.

Accepted Answer

A)  structural financing 
B)  grid loan financing 
C)  internal network financing 
D)  intracorporate financing 
A)  structural financing 
B)  grid loan financing 
C)  internal network financing 
D)  intracorporate financing

Question 16

Which of the following is a factor that complicates capital budgeting in the MNE?

Accepted Answer

A)  project cash flows in the reporting currency of the parent firm 
B)  government intervention in the project 
C)  similar tax rules in the project location and the parent's country 
D)  government permit to exclusively transfer funds from the project to the parent firm 
A)  project cash flows in the reporting currency of the parent firm 
B)  government intervention in the project 
C)  similar tax rules in the project location and the parent's country 
D)  government permit to exclusively transfer funds from the project to the parent firm

Question 17

Global equity market refers to ________.

Accepted Answer

A)  the international marketplace in which bonds are bought and sold, primarily through bond brokers 
B)  collective financial markets where firms can borrow money from banks or other financial intermediaries, or sell corporate bonds to individuals or institutions, to raise capital 
C)  the conversion of illiquid financial instruments, such as bank loans, into tradable securities, such as bonds 
D)  stock exchanges worldwide where investors and firms meet to buy and sell shares of stock 
A)  the international marketplace in which bonds are bought and sold, primarily through bond brokers 
B)  collective financial markets where firms can borrow money from banks or other financial intermediaries, or sell corporate bonds to individuals or institutions, to raise capital 
C)  the conversion of illiquid financial instruments, such as bank loans, into tradable securities, such as bonds 
D)  stock exchanges worldwide where investors and firms meet to buy and sell shares of stock

Question 18

Transfer pricing is defined as ________.

Accepted Answer

A)  methods for transferring funds exclusively from foreign subsidiaries to parent corporations 
B)  compensation paid to owners of intellectual property 
C)  the means by which subsidiaries and affiliates charge each other as they exchange goods and services 
D)  the process through which a parent deposits a large sum in a foreign bank, which transfers it to a subsidiary as a loan 
A)  methods for transferring funds exclusively from foreign subsidiaries to parent corporations 
B)  compensation paid to owners of intellectual property 
C)  the means by which subsidiaries and affiliates charge each other as they exchange goods and services 
D)  the process through which a parent deposits a large sum in a foreign bank, which transfers it to a subsidiary as a loan

Question 19

Which of the following is the final task in international financial management?

Accepted Answer

A)  managing currency risk 
B)  managing the diversity of international accounting and tax practices 
C)  raising funds for the firm 
D)  managing working capital and cash flow 
A)  managing currency risk 
B)  managing the diversity of international accounting and tax practices 
C)  raising funds for the firm 
D)  managing working capital and cash flow

Question 20

Transaction exposure occurs when ________ are denominated in foreign currencies.

Accepted Answer

A)  accounts receivables 
B)  financial reports 
C)  bank loans 
D)  wages and salaries 
A)  accounts receivables 
B)  financial reports 
C)  bank loans 
D)  wages and salaries

Equity financing comes from ________.

Economic exposure results from exchange-rate fluctuations that affect ________.

In passive hedging, the firm frequently reviews total exposure and hedges only a subset of its total exposures, usually those that pose the greatest risk.

Discuss two reasons why a nation might NOT consider a firm's high debt ratio a risky approach to international business.

Which of the following is applied when an American tourist exchanges dollars for the immediate receipt of Japanese yen at a Tokyo bank?

________ estimates future cash flows from the project in the functional currency of the parent-that is, the currency of the primary economic environment in which it operates.

What is the rate of exchange quoted by a financial institution for delivery of a currency within 48 hours?

When Toyota sells yen-denominated bonds in the United States, it is issuing Eurobonds.

________ are currency traders who seek to minimize their risk of exchange-rate fluctuations, often by entering into forward contracts or similar financial instruments.

Net working capital is ________.

Debt financing comes from ________.

Which of the following is a debt instrument that specifies the timing of principal and interest payments?

The NYSE and the NASDAQ Stock Market are the largest in terms of volumes of shares traded.

Funding obtained from sources inside a firm is known as ________.

Which of the following is a factor that complicates capital budgeting in the MNE?

Global equity market refers to ________.

Transfer pricing is defined as ________.

Which of the following is the final task in international financial management?

Transaction exposure occurs when ________ are denominated in foreign currencies.

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

The Cultural Environment of International Business

Ethics, Corporate Social Responsibility, Sustainability and Corporate Governance in International Business

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention and Regional Economic Integration

Understanding Emerging Markets

The International Monetary and Financial Environment

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Exporting and Global Sourcing

Foreign Direct Investment and Collaborative Ventures

Licensing, Franchising, and Other Contractual Strategies

Marketing in the Global Firm

Human Resource Management in the Global Firm

Filters

Exam 10: Financial Management and Accounting in the Global Firm

Equity financing comes from ________.

Economic exposure results from exchange-rate fluctuations that affect ________.

In passive hedging, the firm frequently reviews total exposure and hedges only a subset of its total exposures, usually those that pose the greatest risk.

Discuss two reasons why a nation might NOT consider a firm's high debt ratio a risky approach to international business.

Which of the following is applied when an American tourist exchanges dollars for the immediate receipt of Japanese yen at a Tokyo bank?

________ estimates future cash flows from the project in the functional currency of the parent-that is, the currency of the primary economic environment in which it operates.

What is the rate of exchange quoted by a financial institution for delivery of a currency within 48 hours?

When Toyota sells yen-denominated bonds in the United States, it is issuing Eurobonds.

________ are currency traders who seek to minimize their risk of exchange-rate fluctuations, often by entering into forward contracts or similar financial instruments.

Net working capital is ________.

Debt financing comes from ________.

Which of the following is a debt instrument that specifies the timing of principal and interest payments?

The NYSE and the NASDAQ Stock Market are the largest in terms of volumes of shares traded.

Funding obtained from sources inside a firm is known as ________.

Which of the following is a factor that complicates capital budgeting in the MNE?

Global equity market refers to ________.

Transfer pricing is defined as ________.

Which of the following is the final task in international financial management?

Transaction exposure occurs when ________ are denominated in foreign currencies.

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

The Cultural Environment of International Business

Ethics, Corporate Social Responsibility, Sustainability and Corporate Governance in International Business

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention and Regional Economic Integration

Understanding Emerging Markets

The International Monetary and Financial Environment

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Exporting and Global Sourcing

Foreign Direct Investment and Collaborative Ventures

Licensing, Franchising, and Other Contractual Strategies

Marketing in the Global Firm

Human Resource Management in the Global Firm

Filters