Question 1

A tax credit is a credit on goods and services paid by one member of a corporate family to another.

Accepted Answer

A) True 
 B)False

Question 2

Multilateral netting in global cash management is best described as ________.

Accepted Answer

A)  establishing a safety net so companies don't run out of cash 
B)  coordinating cash inflows and outflows among subsidiaries 
C)  transferring currencies among subsidiaries to exhibit transparency 
D)  transferring funds in the absence of a good cash budget or loan arrangement 
A)  establishing a safety net so companies don't run out of cash 
B)  coordinating cash inflows and outflows among subsidiaries 
C)  transferring currencies among subsidiaries to exhibit transparency 
D)  transferring funds in the absence of a good cash budget or loan arrangement

Question 3

Foreign source income that is derived from the active conduct of a trade or business and therefore subject to U.S. taxation is known as ________.

Accepted Answer

A)  passive income 
B)  active income 
C)  uncontrollable foreign corporation income 
D)  tax haven income 
A)  passive income 
B)  active income 
C)  uncontrollable foreign corporation income 
D)  tax haven income

Question 4

Brooke buys shares of stock in a small bakery in a foreign country in return for an ownership position and promised capital gains. This is an example of ________.

Accepted Answer

A)  equity securities 
B)  debt financing 
C)  playing the stock market 
D)  investing in Euroequities 
A)  equity securities 
B)  debt financing 
C)  playing the stock market 
D)  investing in Euroequities

Question 5

Capital budgeting requires companies to determine free cash flows,which are affected by factors such as local tax rates.

Accepted Answer

A) True 
 B)False

Question 6

Global Positioning Solutions Inc. is a Utah-based company that ________.

Accepted Answer

A)  provides location assistance for global executives who travel frequently 
B)  is a division of a banking syndicate in the Western part of the United States 
C)  assists firms that have foreign-exchange needs but that lack in-house foreign-exchange teams 
D)  started out by providing foreign exchange services that were not being offered by commercial banks 
A)  provides location assistance for global executives who travel frequently 
B)  is a division of a banking syndicate in the Western part of the United States 
C)  assists firms that have foreign-exchange needs but that lack in-house foreign-exchange teams 
D)  started out by providing foreign exchange services that were not being offered by commercial banks

Question 7

Assume that U.S. MNE A earns $100,000 of foreign source income,that the tax rate in the foreign country is 40 percent,and that the tax rate in the United States is 35 percent. How much total (both domestic and foreign)tax would the company pay on that foreign source income,assuming that the tax credit principle applies?

Accepted Answer

A)  $40,000 
B)  $35,000 
C)  $75,000 
D)  $5,000 
A)  $40,000 
B)  $35,000 
C)  $75,000 
D)  $5,000

Question 8

The best way for a Euroequity to get a listing in the United States is to issue a(n)________.

Accepted Answer

A)  Global Depositary Receipt 
B)  European Depositary Receipt 
C)  American Depositary Receipt 
D)  Domestic Depositary Receipt 
A)  Global Depositary Receipt 
B)  European Depositary Receipt 
C)  American Depositary Receipt 
D)  Domestic Depositary Receipt

Question 9

A bond issued by a Brazilian company in British pounds in London is a(n)________.

Accepted Answer

A)  Eurobond 
B)  global bond 
C)  local bond 
D)  foreign bond 
A)  Eurobond 
B)  global bond 
C)  local bond 
D)  foreign bond

Question 10

The CFO's function in a company focuses on ________.

Accepted Answer

A)  improving distributor relationships 
B)  acquiring financial resources 
C)  handling accounting issues 
D)  creating financial statements 
A)  improving distributor relationships 
B)  acquiring financial resources 
C)  handling accounting issues 
D)  creating financial statements

Question 11

The best way for a Euroequity to get a listing in the United States is to issue a Global Depositary Receipt.

Accepted Answer

A) True 
 B)False

Question 12

The process of coordinating cash inflows and outflows among subsidiaries so that only the balance in cash is transferred is known as ________.

Accepted Answer

A)  dividend remissions 
B)  transfer pricing 
C)  multilateral netting 
D)  currency hedging 
A)  dividend remissions 
B)  transfer pricing 
C)  multilateral netting 
D)  currency hedging

Question 13

Which of the following is a characteristic of most offshore financial centers?

Accepted Answer

A)  strict domestic regulation 
B)  minimal banking activities 
C)  large foreign currency markets 
D)  nominal or non-existent tax rates 
A)  strict domestic regulation 
B)  minimal banking activities 
C)  large foreign currency markets 
D)  nominal or non-existent tax rates

Question 14

The long-term financing dimension of cash management deals with the selection,issuance,and management of long-term debt and equity.

Accepted Answer

A) True 
 B)False

Question 15

What is the difference between translation exposure,transaction exposure,and economic exposure?

Accepted Answer

Translation exposure occurs because expo

Question 16

A transfer price is a price on goods and services sold by one member of a corporate family to another.

Accepted Answer

A) True 
 B)False

Question 17

You are the chief financial officer at an MNE. What are your main responsibilities in this position? What taxation issues have a significant effect on the decisions you make?

Accepted Answer

One of the most important people on the

Question 18

An example of an operational hedging strategy against foreign exchange risk is ________.

Accepted Answer

A)  using a forward contract to establish a fixed exchange rate for future transactions 
B)  using local debt to balance local assets 
C)  using a foreign currency option to ensure access to foreign currency at a fixed exchange rate for a specific period of time 
D)  not using leads and lags for intercompany payments 
A)  using a forward contract to establish a fixed exchange rate for future transactions 
B)  using local debt to balance local assets 
C)  using a foreign currency option to ensure access to foreign currency at a fixed exchange rate for a specific period of time 
D)  not using leads and lags for intercompany payments

Question 19

The long-term financing dimension of cash management ________.

Accepted Answer

A)  deals with the selection, issuance, and management of long-term debt and equity 
B)  is unaffected by currency changes because everyone borrows in U.S. dollars 
C)  focuses on the analysis of investment opportunities 
D)  is independent of the capital structure of an MNE 
A)  deals with the selection, issuance, and management of long-term debt and equity 
B)  is unaffected by currency changes because everyone borrows in U.S. dollars 
C)  focuses on the analysis of investment opportunities 
D)  is independent of the capital structure of an MNE

Question 20

Which of the following has extensive banking activities involving short-term financial transactions?

Accepted Answer

A)  booking center 
B)  operational center 
C)  foreign exchange market 
D)  international regulatory market 
A)  booking center 
B)  operational center 
C)  foreign exchange market 
D)  international regulatory market

A tax credit is a credit on goods and services paid by one member of a corporate family to another.

Multilateral netting in global cash management is best described as ________.

Foreign source income that is derived from the active conduct of a trade or business and therefore subject to U.S. taxation is known as ________.

Brooke buys shares of stock in a small bakery in a foreign country in return for an ownership position and promised capital gains. This is an example of ________.

Capital budgeting requires companies to determine free cash flows,which are affected by factors such as local tax rates.

Global Positioning Solutions Inc. is a Utah-based company that ________.

The best way for a Euroequity to get a listing in the United States is to issue a(n)________.

A bond issued by a Brazilian company in British pounds in London is a(n)________.

The CFO's function in a company focuses on ________.

The best way for a Euroequity to get a listing in the United States is to issue a Global Depositary Receipt.

The process of coordinating cash inflows and outflows among subsidiaries so that only the balance in cash is transferred is known as ________.

Which of the following is a characteristic of most offshore financial centers?

The long-term financing dimension of cash management deals with the selection,issuance,and management of long-term debt and equity.

What is the difference between translation exposure,transaction exposure,and economic exposure?

A transfer price is a price on goods and services sold by one member of a corporate family to another.

You are the chief financial officer at an MNE. What are your main responsibilities in this position? What taxation issues have a significant effect on the decisions you make?

An example of an operational hedging strategy against foreign exchange risk is ________.

The long-term financing dimension of cash management ________.

Which of the following has extensive banking activities involving short-term financial transactions?

Globalization and International Business

The Cultural Environments Facing Business

The Political and Legal Environments Facing Business

The Economic Environments Facing Businesses

Globalization and Society

International Trade and Factor Mobility Theory

Governmental Influence on Trade

Cross-National Cooperation and Agreements

Global Foreign-Exchange Markets

The Determination of Exchange Rates

The Strategy of International Business

Country Evaluation and Selection

Export and Import

Direct Investment and Collaborative Strategies

The Organization of International Business

Marketing Globally

Global Manufacturing and Supply Chain Management

International Accounting Issues

International Human Resources

Filters

Exam 19: The Multinational Finance Function

A tax credit is a credit on goods and services paid by one member of a corporate family to another.

Multilateral netting in global cash management is best described as ________.

Foreign source income that is derived from the active conduct of a trade or business and therefore subject to U.S. taxation is known as ________.

Brooke buys shares of stock in a small bakery in a foreign country in return for an ownership position and promised capital gains. This is an example of ________.

Capital budgeting requires companies to determine free cash flows,which are affected by factors such as local tax rates.

Global Positioning Solutions Inc. is a Utah-based company that ________.

The best way for a Euroequity to get a listing in the United States is to issue a(n)________.

A bond issued by a Brazilian company in British pounds in London is a(n)________.

The CFO's function in a company focuses on ________.

The best way for a Euroequity to get a listing in the United States is to issue a Global Depositary Receipt.

The process of coordinating cash inflows and outflows among subsidiaries so that only the balance in cash is transferred is known as ________.

Which of the following is a characteristic of most offshore financial centers?

The long-term financing dimension of cash management deals with the selection,issuance,and management of long-term debt and equity.

What is the difference between translation exposure,transaction exposure,and economic exposure?

A transfer price is a price on goods and services sold by one member of a corporate family to another.

You are the chief financial officer at an MNE. What are your main responsibilities in this position? What taxation issues have a significant effect on the decisions you make?

An example of an operational hedging strategy against foreign exchange risk is ________.

The long-term financing dimension of cash management ________.

Which of the following has extensive banking activities involving short-term financial transactions?

Globalization and International Business

The Cultural Environments Facing Business

The Political and Legal Environments Facing Business

The Economic Environments Facing Businesses

Globalization and Society

International Trade and Factor Mobility Theory

Governmental Influence on Trade

Cross-National Cooperation and Agreements

Global Foreign-Exchange Markets

The Determination of Exchange Rates

The Strategy of International Business

Country Evaluation and Selection

Export and Import

Direct Investment and Collaborative Strategies

The Organization of International Business

Marketing Globally

Global Manufacturing and Supply Chain Management

International Accounting Issues

International Human Resources

Filters