Question 1

Which of the following is a characteristic of the Eurocurrency market?

Accepted Answer

A) The Eurocurrency market is both short and medium term. 
B) Private borrowers are the major players in the Eurocurrency market. 
C) The Eurocurrency market is a retail, rather than wholesale, market. 
D) The interest rates in the Eurocurrency market are about the same as in domestic markets. 
A) The Eurocurrency market is both short and medium term. 
B) Private borrowers are the major players in the Eurocurrency market. 
C) The Eurocurrency market is a retail, rather than wholesale, market. 
D) The interest rates in the Eurocurrency market are about the same as in domestic markets. A

Question 2

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  True

Question 3

MNEs most likely use offshore debt markets ________.

Accepted Answer

A) to hide their cash from tax authorities 
B) to take advantage of their ability to access capital in different countries 
C) since debt in foreign countries is always cheaper than in the home-country market 
D) because investors don't like to invest in companies that only raise capital in their home markets 
A) to hide their cash from tax authorities 
B) to take advantage of their ability to access capital in different countries 
C) since debt in foreign countries is always cheaper than in the home-country market 
D) because investors don't like to invest in companies that only raise capital in their home markets B

Question 4

What are the major sources of internal funds for MNEs? Why do many MNEs acquire external funds through the Eurodollar market?

Accepted Answer

The major sources of internal funds for

Question 5

If a foreign subsidiary is located in a low tax country, the parent company would probably use a ________.

Accepted Answer

A) high transfer price on inventory shipped from the parent to the subsidiary 
B) high transfer price on goods sold by the subsidiary to the parent 
C) low transfer price on inventory shipped from the subsidiary to the parent 
D) tax credit price to minimize local tax liabilities 
A) high transfer price on inventory shipped from the parent to the subsidiary 
B) high transfer price on goods sold by the subsidiary to the parent 
C) low transfer price on inventory shipped from the subsidiary to the parent 
D) tax credit price to minimize local tax liabilities

Question 6

Depositary receipts traded outside the United States are called ________ depositary receipts.

Accepted Answer

A) Euro 
B) Global 
C) American 
D) None of the above 
A) Euro 
B) Global 
C) American 
D) None of the above

Question 7

In a country like Russia, where there is a great deal of corruption, an MNE would most likely use ________ to fund corporate activities.

Accepted Answer

A) equities 
B) debt 
C) cash 
D) countertrade 
A) equities 
B) debt 
C) cash 
D) countertrade

Question 8

A Chief Financial Officer (CFO)in an international company would most likely be responsible for all of the following activities EXCEPT ________.

Accepted Answer

A) managing short-term capital needs 
B) making financial decisions 
C) making investment decisions 
D) managing employee repatriation 
A) managing short-term capital needs 
B) making financial decisions 
C) making investment decisions 
D) managing employee repatriation

Question 9

What is an offshore financial center? What are the main characteristics of OFCs?

Accepted Answer

Offshore financial centers are cities or

Question 10

The Eurocurrency market is a retail, rather than wholesale, market.

Accepted Answer

A) True 
 B)False

Question 11

The global capital market offers all of the following advantages to firms EXCEPT ________.

Accepted Answer

A) short-term financing options 
B) numerous investment opportunities 
C) wide array of financing sources 
D) financing at reduced cost 
A) short-term financing options 
B) numerous investment opportunities 
C) wide array of financing sources 
D) financing at reduced cost

Question 12

________ focus on offering banking and other financial services to nonresident customers.

Accepted Answer

A) Subsidiary banks 
B) Branch banks 
C) Affiliated banks 
D) Offshore financial centers 
A) Subsidiary banks 
B) Branch banks 
C) Affiliated banks 
D) Offshore financial centers

Question 13

Which of the following financing tactics would most likely help an MNE avoid bankruptcy?

Accepted Answer

A) integrating e-commerce opportunities with domestic sales in order to maintain a steady balance of income and expenditures 
B) agreeing to forward contracts with customers and hedging purchases and sales on future currency rates 
C) organizing the capital structure so that the amount of debt financing is twice the level of equity financing 
D) keeping the percentage of debt in the capital structure to a level that can be managed even during difficult business conditions 
A) integrating e-commerce opportunities with domestic sales in order to maintain a steady balance of income and expenditures 
B) agreeing to forward contracts with customers and hedging purchases and sales on future currency rates 
C) organizing the capital structure so that the amount of debt financing is twice the level of equity financing 
D) keeping the percentage of debt in the capital structure to a level that can be managed even during difficult business conditions

Question 14

The primary objective of multinational tax planning is to minimize the firm's worldwide tax burden.

Accepted Answer

A) True 
 B)False

Question 15

All of the following are part of the global financial system EXCEPT the ________.

Accepted Answer

A) New York Stock Exchange 
B) World Trade Organization 
C) International Monetary Fund 
D) Bank for International Settlements 
A) New York Stock Exchange 
B) World Trade Organization 
C) International Monetary Fund 
D) Bank for International Settlements

Question 16

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 17

Another source of financing, in which an investor takes an ownership position in return for shares of stock in the company and the promises of capital gains, is called debt financing.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following countries is an important offshore financial center?

Accepted Answer

A) Turks and Caicos 
B) Mexico 
C) South Korea 
D) Bermuda 
A) Turks and Caicos 
B) Mexico 
C) South Korea 
D) Bermuda

Question 19

The long-term financing dimension of financial 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

An ADR is a negotiable certificate issued by a U.S.bank in the United States to represent the underlying shares of a foreign corporation's stock held at a custodian bank in the foreign country.

Accepted Answer

A) True 
 B)False

Which of the following is a characteristic of the Eurocurrency market?

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

MNEs most likely use offshore debt markets ________.

What are the major sources of internal funds for MNEs? Why do many MNEs acquire external funds through the Eurodollar market?

If a foreign subsidiary is located in a low tax country, the parent company would probably use a ________.

Depositary receipts traded outside the United States are called ________ depositary receipts.

In a country like Russia, where there is a great deal of corruption, an MNE would most likely use ________ to fund corporate activities.

A Chief Financial Officer (CFO)in an international company would most likely be responsible for all of the following activities EXCEPT ________.

What is an offshore financial center? What are the main characteristics of OFCs?

The Eurocurrency market is a retail, rather than wholesale, market.

The global capital market offers all of the following advantages to firms EXCEPT ________.

________ focus on offering banking and other financial services to nonresident customers.

Which of the following financing tactics would most likely help an MNE avoid bankruptcy?

The primary objective of multinational tax planning is to minimize the firm's worldwide tax burden.

All of the following are part of the global financial system EXCEPT the ________.

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

Another source of financing, in which an investor takes an ownership position in return for shares of stock in the company and the promises of capital gains, is called debt financing.

Which of the following countries is an important offshore financial center?

The long-term financing dimension of financial management ________.

An ADR is a negotiable certificate issued by a U.S.bank in the United States to represent the underlying shares of a foreign corporation's stock held at a custodian bank in the foreign country.

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 and Finance Issues

International Human Resource Management

Filters

Exam 11: Global Capital Markets

Which of the following is a characteristic of the Eurocurrency market?

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

MNEs most likely use offshore debt markets ________.

What are the major sources of internal funds for MNEs? Why do many MNEs acquire external funds through the Eurodollar market?

If a foreign subsidiary is located in a low tax country, the parent company would probably use a ________.

Depositary receipts traded outside the United States are called ________ depositary receipts.

In a country like Russia, where there is a great deal of corruption, an MNE would most likely use ________ to fund corporate activities.

A Chief Financial Officer (CFO)in an international company would most likely be responsible for all of the following activities EXCEPT ________.

What is an offshore financial center? What are the main characteristics of OFCs?

The Eurocurrency market is a retail, rather than wholesale, market.

The global capital market offers all of the following advantages to firms EXCEPT ________.

________ focus on offering banking and other financial services to nonresident customers.

Which of the following financing tactics would most likely help an MNE avoid bankruptcy?

The primary objective of multinational tax planning is to minimize the firm's worldwide tax burden.

All of the following are part of the global financial system EXCEPT the ________.

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

Another source of financing, in which an investor takes an ownership position in return for shares of stock in the company and the promises of capital gains, is called debt financing.

Which of the following countries is an important offshore financial center?

The long-term financing dimension of financial management ________.

An ADR is a negotiable certificate issued by a U.S.bank in the United States to represent the underlying shares of a foreign corporation's stock held at a custodian bank in the foreign country.

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 and Finance Issues

International Human Resource Management

Filters