Exam 11: Global Capital Markets

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

The Eurocurrency market is limited to exchanges that include the euro.

Low-cost Eurocurrency loans can be obtained in offshore financial centers.

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?

The market for shares sold outside the boundaries of the issuing company's home country is the ________.

Taxation is an important cash flow issue, but it typically does not have a strong impact on the choice of organizational form (such as branch or subsidiary)or the location of an investment.

The typical tax-haven subsidiary owns the common stock of its related operating foreign subsidiaries.

Equity financing is the degree to which a firm funds the growth of a business by debt.

What is a transfer price? Why are transfer prices used?

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

What term refers to a currency on deposit outside its country of issue?

A(n)________ is a large, liquid financial asset that can be traded anywhere at any time.

A major problem with MNEs using offshore financial centers is that they may give unfair tax advantages to companies.

Tax-haven subsidiaries categorically referred to as International Offshore Financial Centers have all of the following characteristics EXCEPT ________.

________ is the price between two companies that most accurately reflects the market price.

A bond that is issued by Nestle, a Swiss company, which is denominated in yen and sold to residents of Japan is most likely a ________.

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

Acquiring and allocating financial resources among the company's activities and projects is the responsibility of the financial marketing manager.

The OECD is concerned about transfer pricing practices because ________.

When using equity financing, firms run the risk of ________.