Question 1

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 2

Which of the following is most likely a benefit for firms that participate in the global capital market?

Accepted Answer

A) numerous investment opportunities 
B) large pool of financing sources 
C) equally balanced capital structure 
D) quick sale of stocks and bonds 
A) numerous investment opportunities 
B) large pool of financing sources 
C) equally balanced capital structure 
D) quick sale of stocks and bonds

Question 3

A bond issue floated by a U.S.company in dollars in London, Luxembourg, and Switzerland by a syndication of bonds is an example of a ________.

Accepted Answer

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

Question 4

According to U.S.tax law, if a foreign subsidiary earns income, ________.

Accepted Answer

A) its income is immediately taxable to the parent, irrespective of the type of income earned 
B) that income is not taxable to the parent company as long as the subsidiary pays income taxes in the country where it is earned 
C) passive income is taxable to the parent unless the parent company is a controlled foreign corporation 
D) active income is taxable to the parent when it is remitted as a dividend 
A) its income is immediately taxable to the parent, irrespective of the type of income earned 
B) that income is not taxable to the parent company as long as the subsidiary pays income taxes in the country where it is earned 
C) passive income is taxable to the parent unless the parent company is a controlled foreign corporation 
D) active income is taxable to the parent when it is remitted as a dividend

Question 5

A French company floating a bond issued in Swiss francs in Switzerland would be selling a foreign bond.

Accepted Answer

A) True 
 B)False

Question 6

The stock market is also known as the ________.

Accepted Answer

A) capital market 
B) foreign-exchange market 
C) bond market 
D) equity capital market 
A) capital market 
B) foreign-exchange market 
C) bond market 
D) equity capital market

Question 7

ADRs that are created at the request of a foreign firm wanting its shares traded in the United States are ________.

Accepted Answer

A) facilitated 
B) unfacilitated 
C) sponsored 
D) unsponsored 
A) facilitated 
B) unfacilitated 
C) sponsored 
D) unsponsored

Question 8

What is a Eurodollar?

Accepted Answer

A) a euro held by an American 
B) a U.S. dollar deposited in a European bank 
C) a euro deposited in a U.S. bank. 
D) any currency deposited in a country other than the country of issue 
A) a euro held by an American 
B) a U.S. dollar deposited in a European bank 
C) a euro deposited in a U.S. bank. 
D) any currency deposited in a country other than the country of issue

Question 9

A negotiable certificate issued by a U.S.bank to represent the underlying shares of a foreign corporation's stock is called a(n)________.

Accepted Answer

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

Question 10

The OECD has set transfer pricing guidelines to enhance the manipulation of prices and therefore taxes for MNEs and the countries where they operate.

Accepted Answer

A) True 
 B)False

Question 11

A situation in which several banks pool resources in the Eurocurrency market to extend credit to a borrower and spread the risk is known as ________.

Accepted Answer

A) credit collaboration 
B) leverage equity financing 
C) syndication 
D) short-term Eurocurrency financing 
A) credit collaboration 
B) leverage equity financing 
C) syndication 
D) short-term Eurocurrency financing

Question 12

Firms most likely borrow money in the international bond market to ________.

Accepted Answer

A) guarantee high yields and low rates 
B) enable diversification of funding sources 
C) protect against costly government regulations 
D) allow emerging markets to invest in foreign exchange 
A) guarantee high yields and low rates 
B) enable diversification of funding sources 
C) protect against costly government regulations 
D) allow emerging markets to invest in foreign exchange

Question 13

Libor is best defined as the ________.

Accepted Answer

A) interest rate of the National Bank of London 
B) short-term interest rate for dollars held in the Eurodollar market 
C) interest rate of the European Union 
D) deposit rate that applies to commercial loans in the European Union 
A) interest rate of the National Bank of London 
B) short-term interest rate for dollars held in the Eurodollar market 
C) interest rate of the European Union 
D) deposit rate that applies to commercial loans in the European Union

Question 14

The international bond market is much larger and more lucrative than the domestic bond market.

Accepted Answer

A) True 
 B)False

Question 15

The dominant currencies in the international bond market are the euro and the U.S.dollar.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following was NOT a contributing factor to the turmoil in the global stock market in the last few years?

Accepted Answer

A) a decline in oil prices 
B) the revaluation of the euro 
C) emerging markets lowering interest rates 
D) a rise in interest rates in the United States 
A) a decline in oil prices 
B) the revaluation of the euro 
C) emerging markets lowering interest rates 
D) a rise in interest rates in the United States

Question 17

Transfer pricing is a strategy that may be used by MNEs to ________.

Accepted Answer

A) reduce consolidated corporate income taxes 
B) partially finance a subsidiary in another country 
C) transfer funds from a subsidiary to the parent corporation 
D) all of the above 
A) reduce consolidated corporate income taxes 
B) partially finance a subsidiary in another country 
C) transfer funds from a subsidiary to the parent corporation 
D) all of the above

Question 18

The Japanese yen makes up the largest portion of the international bond market.

Accepted Answer

A) True 
 B)False

Question 19

Foreign branch income is ________.

Accepted Answer

A) deferred from U.S. taxation until a dividend is remitted to the parent company 
B) considered passive income and therefore not subject to U.S. taxation 
C) directly included in the parent's taxable income in the year in which it is earned 
D) considered active income and therefore deferred until future years 
A) deferred from U.S. taxation until a dividend is remitted to the parent company 
B) considered passive income and therefore not subject to U.S. taxation 
C) directly included in the parent's taxable income in the year in which it is earned 
D) considered active income and therefore deferred until future years

Question 20

Subpart F income is passive and usually derived from operations in a tax-haven country.

Accepted Answer

A) True 
 B)False

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 ________.

Which of the following is most likely a benefit for firms that participate in the global capital market?

A bond issue floated by a U.S.company in dollars in London, Luxembourg, and Switzerland by a syndication of bonds is an example of a ________.

According to U.S.tax law, if a foreign subsidiary earns income, ________.

A French company floating a bond issued in Swiss francs in Switzerland would be selling a foreign bond.

The stock market is also known as the ________.

ADRs that are created at the request of a foreign firm wanting its shares traded in the United States are ________.

What is a Eurodollar?

A negotiable certificate issued by a U.S.bank to represent the underlying shares of a foreign corporation's stock is called a(n)________.

The OECD has set transfer pricing guidelines to enhance the manipulation of prices and therefore taxes for MNEs and the countries where they operate.

A situation in which several banks pool resources in the Eurocurrency market to extend credit to a borrower and spread the risk is known as ________.

Firms most likely borrow money in the international bond market to ________.

Libor is best defined as the ________.

The international bond market is much larger and more lucrative than the domestic bond market.

The dominant currencies in the international bond market are the euro and the U.S.dollar.

Which of the following was NOT a contributing factor to the turmoil in the global stock market in the last few years?

Transfer pricing is a strategy that may be used by MNEs to ________.

The Japanese yen makes up the largest portion of the international bond market.

Foreign branch income is ________.

Subpart F income is passive and usually derived from operations in a tax-haven 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

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 ________.

Which of the following is most likely a benefit for firms that participate in the global capital market?

A bond issue floated by a U.S.company in dollars in London, Luxembourg, and Switzerland by a syndication of bonds is an example of a ________.

According to U.S.tax law, if a foreign subsidiary earns income, ________.

A French company floating a bond issued in Swiss francs in Switzerland would be selling a foreign bond.

The stock market is also known as the ________.

ADRs that are created at the request of a foreign firm wanting its shares traded in the United States are ________.

What is a Eurodollar?

A negotiable certificate issued by a U.S.bank to represent the underlying shares of a foreign corporation's stock is called a(n)________.

The OECD has set transfer pricing guidelines to enhance the manipulation of prices and therefore taxes for MNEs and the countries where they operate.

A situation in which several banks pool resources in the Eurocurrency market to extend credit to a borrower and spread the risk is known as ________.

Firms most likely borrow money in the international bond market to ________.

Libor is best defined as the ________.

The international bond market is much larger and more lucrative than the domestic bond market.

The dominant currencies in the international bond market are the euro and the U.S.dollar.

Which of the following was NOT a contributing factor to the turmoil in the global stock market in the last few years?

Transfer pricing is a strategy that may be used by MNEs to ________.

The Japanese yen makes up the largest portion of the international bond market.

Foreign branch income is ________.

Subpart F income is passive and usually derived from operations in a tax-haven 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