Question 1

Explain the process of documentary collection as an international payment method.

Accepted Answer

In documentary collection, the exporter

Question 2

The minimum rate of return the firm finds acceptable for its capital investments is called the ________.

Accepted Answer

A)  hurdle rate 
B)  internal rate of return 
C)  return on investment 
D)  saturation rate 
A)  hurdle rate 
B)  internal rate of return 
C)  return on investment 
D)  saturation rate

Question 3

________ are considered less risky and are usually discounted less than ________.

Accepted Answer

A)  Letters of credit; bills of exchange 
B)  Trade acceptances; bills of lading 
C)  Banker's acceptances; trade acceptances 
D)  Bills of exchange; banker's acceptances 
A)  Letters of credit; bills of exchange 
B)  Trade acceptances; bills of lading 
C)  Banker's acceptances; trade acceptances 
D)  Bills of exchange; banker's acceptances

Question 4

Which currency is used most often for transactions involving commercial aircraft?

Accepted Answer

A)  U.S. dollars 
B)  euros 
C)  Japanese yen 
D)  Swiss francs 
A)  U.S. dollars 
B)  euros 
C)  Japanese yen 
D)  Swiss francs

Question 5

Open account is the safest form of payment from the importer's perspective.

Accepted Answer

A) True 
 B)False

Question 6

More than 70 percent of the exports of less developed countries are invoiced using the euro.

Accepted Answer

A) True 
 B)False

Question 7

Two firms participating in a swap must use the same currency.

Accepted Answer

A) True 
 B)False

Question 8

What conditions favor the use of each form of payment?

Accepted Answer

Payment in advance is favored when the e

Question 9

Which of the following strategies offers firms the potential for capital gain if the home currency rises in value?

Accepted Answer

A)  buying a forward currency 
B)  buying a currency option 
C)  acquiring offsetting assets 
D)  going naked 
A)  buying a forward currency 
B)  buying a currency option 
C)  acquiring offsetting assets 
D)  going naked

Question 10

Why do exporters and importers sometimes choose to use a third country's currency for their financial transactions?

Accepted Answer

Exporters and importers may se

Question 11

In most international transactions, one of the parties has to bear transaction exposure.

Accepted Answer

A) True 
 B)False

Question 12

Which term refers to an accounting system used to facilitate international countertrade that requires a firm to balance its overall countertrade transactions but not any single countertrade transaction?

Accepted Answer

A)  open accounts 
B)  parallel barters 
C)  offset purchases 
D)  clearinghouse accounts 
A)  open accounts 
B)  parallel barters 
C)  offset purchases 
D)  clearinghouse accounts

Question 13

How does a time draft become a banker's acceptance?

Accepted Answer

A time draft becomes a banker'

Question 14

Why do financial officers at international firms adjust their capital budgeting techniques? Where can financial officers obtain low-cost sources of capital?

Accepted Answer

Firms use capital budgeting techniques t

Question 15

Ford Motor Company is considering a cash investment in a joint venture with Hyundai in South Korea. Ford considers the number of years it will take the firm to recover the original cash investment from the project's earnings, which is called the ________.

Accepted Answer

A)  internal rate of return 
B)  net present value 
C)  payback period 
D)  return on equity 
A)  internal rate of return 
B)  net present value 
C)  payback period 
D)  return on equity

Question 16

According to the deferral rule in the U.S. tax code, a U.S. parent corporation must include the earnings of its foreign subsidiaries when calculating taxable income.

Accepted Answer

A) True 
 B)False

Question 17

Countertrade is primarily important to countries that lack ________.

Accepted Answer

A)  foreign trade zones 
B)  convertible currencies 
C)  greenfield investments 
D)  democratic governments 
A)  foreign trade zones 
B)  convertible currencies 
C)  greenfield investments 
D)  democratic governments

Question 18

The ________ is a letter of credit that the bank may alter at any time and for any reason.

Accepted Answer

A)  advised letter of credit 
B)  confirmed letter of credit 
C)  irrevocable letter of credit 
D)  revocable letter of credit 
A)  advised letter of credit 
B)  confirmed letter of credit 
C)  irrevocable letter of credit 
D)  revocable letter of credit

Question 19

When acceptances are sold ________, it means that the buyer of the acceptance is stuck with the loss if the importer does not pay.

Accepted Answer

A)  without recourse 
B)  with recourse 
C)  with pay 
D)  without pay 
A)  without recourse 
B)  with recourse 
C)  with pay 
D)  without pay

Question 20

What types of transactions denominated in a foreign currency can lead to transaction exposure?

Accepted Answer

The types of transactions incl

Explain the process of documentary collection as an international payment method.

The minimum rate of return the firm finds acceptable for its capital investments is called the ________.

are considered less risky and are usually discounted less than .

Which currency is used most often for transactions involving commercial aircraft?

Open account is the safest form of payment from the importer's perspective.

More than 70 percent of the exports of less developed countries are invoiced using the euro.

Two firms participating in a swap must use the same currency.

What conditions favor the use of each form of payment?

Which of the following strategies offers firms the potential for capital gain if the home currency rises in value?

Why do exporters and importers sometimes choose to use a third country's currency for their financial transactions?

In most international transactions, one of the parties has to bear transaction exposure.

Which term refers to an accounting system used to facilitate international countertrade that requires a firm to balance its overall countertrade transactions but not any single countertrade transaction?

How does a time draft become a banker's acceptance?

Why do financial officers at international firms adjust their capital budgeting techniques? Where can financial officers obtain low-cost sources of capital?

Ford Motor Company is considering a cash investment in a joint venture with Hyundai in South Korea. Ford considers the number of years it will take the firm to recover the original cash investment from the project's earnings, which is called the ________.

According to the deferral rule in the U.S. tax code, a U.S. parent corporation must include the earnings of its foreign subsidiaries when calculating taxable income.

Countertrade is primarily important to countries that lack ________.

The ________ is a letter of credit that the bank may alter at any time and for any reason.

When acceptances are sold ________, it means that the buyer of the acceptance is stuck with the loss if the importer does not pay.

What types of transactions denominated in a foreign currency can lead to transaction exposure?

An Overview of International Business

Global Marketplaces and Business Centers

Legal, Technological, Accounting, and Political Environments

The Role of Culture

Ethics and Social Responsibility in International Business

International Trade and Investment

The International Monetary System and the Balance of Payments

Foreign Exchange and International Financial Markets

Formulation of National Trade Policies

International Cooperation Among Nations

International Strategic Management

Strategies for Analyzing and Entering Foreign Markets

International Strategic Alliances

International Organization Design and Control

Leadership and Employee Behavior in International Business

International Marketing

International Operations Management

International Human Resource Management and Labor Relations

Filters

Exam 18: International Financial Management

Explain the process of documentary collection as an international payment method.

The minimum rate of return the firm finds acceptable for its capital investments is called the ________.

________ are considered less risky and are usually discounted less than ________.

Which currency is used most often for transactions involving commercial aircraft?

Open account is the safest form of payment from the importer's perspective.

More than 70 percent of the exports of less developed countries are invoiced using the euro.

Two firms participating in a swap must use the same currency.

What conditions favor the use of each form of payment?

Which of the following strategies offers firms the potential for capital gain if the home currency rises in value?

Why do exporters and importers sometimes choose to use a third country's currency for their financial transactions?

In most international transactions, one of the parties has to bear transaction exposure.

Which term refers to an accounting system used to facilitate international countertrade that requires a firm to balance its overall countertrade transactions but not any single countertrade transaction?

How does a time draft become a banker's acceptance?

Why do financial officers at international firms adjust their capital budgeting techniques? Where can financial officers obtain low-cost sources of capital?

Ford Motor Company is considering a cash investment in a joint venture with Hyundai in South Korea. Ford considers the number of years it will take the firm to recover the original cash investment from the project's earnings, which is called the ________.

According to the deferral rule in the U.S. tax code, a U.S. parent corporation must include the earnings of its foreign subsidiaries when calculating taxable income.

Countertrade is primarily important to countries that lack ________.

The ________ is a letter of credit that the bank may alter at any time and for any reason.

When acceptances are sold ________, it means that the buyer of the acceptance is stuck with the loss if the importer does not pay.

What types of transactions denominated in a foreign currency can lead to transaction exposure?

An Overview of International Business

Global Marketplaces and Business Centers

Legal, Technological, Accounting, and Political Environments

The Role of Culture

Ethics and Social Responsibility in International Business

International Trade and Investment

The International Monetary System and the Balance of Payments

Foreign Exchange and International Financial Markets

Formulation of National Trade Policies

International Cooperation Among Nations

International Strategic Management

Strategies for Analyzing and Entering Foreign Markets

International Strategic Alliances

International Organization Design and Control

Leadership and Employee Behavior in International Business

International Marketing

International Operations Management

International Human Resource Management and Labor Relations

Filters

are considered less risky and are usually discounted less than .