Question 1

The number of publicly traded firms:

Accepted Answer

A)  peaked in the U.S. in 1996. 
B)  peaked worldwide in 1996. 
C)  increased significantly in 2009 as a result of the international financial crisis. 
D)  all of the above 
A)  peaked in the U.S. in 1996. 
B)  peaked worldwide in 1996. 
C)  increased significantly in 2009 as a result of the international financial crisis. 
D)  all of the above

Question 2

The stakeholder capitalism model:

Accepted Answer

A)  typically avoids the flaw of impatient capital. 
B)  tries to meet the desires of multiple stakeholders. 
C)  may leave management without a clear signal about tradeoffs among the several stakeholders. 
D)  all of the above 
A)  typically avoids the flaw of impatient capital. 
B)  tries to meet the desires of multiple stakeholders. 
C)  may leave management without a clear signal about tradeoffs among the several stakeholders. 
D)  all of the above

Question 3

Which of the following broad topics is NOT identified as an area to be established as good corporate governance practice by the Organization for Economic Cooperation and Development (OECD)?

Accepted Answer

A)  protect the rights of shareholders 
B)  disclosure and transparency 
C)  the proper role of stakeholders in the governance of the firm 
D)  All of the above should be a concern of good corporate governance. 
A)  protect the rights of shareholders 
B)  disclosure and transparency 
C)  the proper role of stakeholders in the governance of the firm 
D)  All of the above should be a concern of good corporate governance.

Question 4

In finance, an efficient market is one in which:

Accepted Answer

A)  prices are assumed to be correct. 
B)  prices adjust quickly and accurately to new information. 
C)  prices are the best allocators of capital in the macro economy. 
D)  all of the above 
A)  prices are assumed to be correct. 
B)  prices adjust quickly and accurately to new information. 
C)  prices are the best allocators of capital in the macro economy. 
D)  all of the above

Question 5

Since movements between exchanges typically are a zero sum within a country, and spinouts and bulletin board movements are few in number, real growth in listings comes from IPOs.

Accepted Answer

A) True 
 B)False

Question 6

The stakeholder capitalism model does not assume that equity markets are either efficient or inefficient.

Accepted Answer

A) True 
 B)False

Question 7

According to the authors, dual classes of voting stock are the norm in non-Anglo-American markets.

Accepted Answer

A) True 
 B)False

Question 8

Agency theory states that unsystematic risk can be eliminated through diversification.

Accepted Answer

A) True 
 B)False

Question 9

The Sarbanes-Oxley Act, passed by the U.S. Congress in July 2002, was designed to:

Accepted Answer

A)  reinstitute heavy tariffs on international trade. 
B)  reform corporate governance. 
C)  limit the Federal Reserve Board's ability to engage in the buying and selling of gold. 
D)  limit trade with countries deemed lenient on terrorism. 
A)  reinstitute heavy tariffs on international trade. 
B)  reform corporate governance. 
C)  limit the Federal Reserve Board's ability to engage in the buying and selling of gold. 
D)  limit trade with countries deemed lenient on terrorism.

Question 10

Which of the following is a reason why managers act to maximize shareholder wealth in Anglo-American markets?

Accepted Answer

A)  the use of stock options to align the goals of shareholders and managers 
B)  the market for corporate control that allows for outside takeover of the firm 
C)  performance-based compensation for executive management 
D)  all of the above 
A)  the use of stock options to align the goals of shareholders and managers 
B)  the market for corporate control that allows for outside takeover of the firm 
C)  performance-based compensation for executive management 
D)  all of the above

Question 11

According to recent research, family-owned firms in some highly-developed economies typically outperform publicly-owned firms.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is generally NOT considered to be a viable operational goal for a firm?

Accepted Answer

A)  maintaining a strong local currency 
B)  maximization of after-tax income 
C)  minimization of the firm's effective global tax burden 
D)  correct positioning of the firm's income, cash flows and available funds as to country and currency 
A)  maintaining a strong local currency 
B)  maximization of after-tax income 
C)  minimization of the firm's effective global tax burden 
D)  correct positioning of the firm's income, cash flows and available funds as to country and currency

Question 13

Systematic risk can be defined as:

Accepted Answer

A)  the total risk to the firm. 
B)  the risk of the individual security. 
C)  the risk of the market in general. 
D)  the risk that can be systematically diversified away. 
A)  the total risk to the firm. 
B)  the risk of the individual security. 
C)  the risk of the market in general. 
D)  the risk that can be systematically diversified away.

Question 14

If share price rises from $12 to $15 per share, and pays a dividend of $1 per share, what was the rate of return to shareholders?

Accepted Answer

A)  26.67% 
B)  -13.33% 
C)  33.33% 
D)  16.67% 
A)  26.67% 
B)  -13.33% 
C)  33.33% 
D)  16.67%

Question 15

Investor protection is typically better in countries with codified civil law (the Code Napoleon) than in countries with a legal system based in English common law.

Accepted Answer

A) True 
 B)False

Question 16

In recent years the trend has been for markets to increasing focus on the shareholder wealth form of wealth maximization.

Accepted Answer

A) True 
 B)False

Question 17

The Stakeholder Capitalism Model (SCM):

Accepted Answer

A)  clearly places shareholders as the primary stakeholder. 
B)  combines the interests and inputs of shareholders, creditors, management, employees, and society. 
C)  has financial profit as its goal and is often termed impatient capital. 
D)  is the Anglo-American model of corporate governance. 
A)  clearly places shareholders as the primary stakeholder. 
B)  combines the interests and inputs of shareholders, creditors, management, employees, and society. 
C)  has financial profit as its goal and is often termed impatient capital. 
D)  is the Anglo-American model of corporate governance.

Question 18

The stakeholder capitalism model (SCM) holds that total risk (operational and financial) is more important than just systematic risk.

Accepted Answer

A) True 
 B)False

Question 19

Companies that are delisted cease to trade.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is NOT commonly associated with a government affiliated form of corporate governance regime?

Accepted Answer

A)  no minority influence 
B)  lack of transparency 
C)  state ownership of enterprise 
D)  All are associated with this type of corporate governance regime. 
A)  no minority influence 
B)  lack of transparency 
C)  state ownership of enterprise 
D)  All are associated with this type of corporate governance regime.

The number of publicly traded firms:

The stakeholder capitalism model:

Which of the following broad topics is NOT identified as an area to be established as good corporate governance practice by the Organization for Economic Cooperation and Development (OECD)?

In finance, an efficient market is one in which:

Since movements between exchanges typically are a zero sum within a country, and spinouts and bulletin board movements are few in number, real growth in listings comes from IPOs.

The stakeholder capitalism model does not assume that equity markets are either efficient or inefficient.

According to the authors, dual classes of voting stock are the norm in non-Anglo-American markets.

Agency theory states that unsystematic risk can be eliminated through diversification.

The Sarbanes-Oxley Act, passed by the U.S. Congress in July 2002, was designed to:

Which of the following is a reason why managers act to maximize shareholder wealth in Anglo-American markets?

According to recent research, family-owned firms in some highly-developed economies typically outperform publicly-owned firms.

Which of the following is generally NOT considered to be a viable operational goal for a firm?

Systematic risk can be defined as:

If share price rises from $12 to $15 per share, and pays a dividend of $1 per share, what was the rate of return to shareholders?

Investor protection is typically better in countries with codified civil law (the Code Napoleon) than in countries with a legal system based in English common law.

In recent years the trend has been for markets to increasing focus on the shareholder wealth form of wealth maximization.

The Stakeholder Capitalism Model (SCM):

The stakeholder capitalism model (SCM) holds that total risk (operational and financial) is more important than just systematic risk.

Companies that are delisted cease to trade.

Which of the following is NOT commonly associated with a government affiliated form of corporate governance regime?

Multinational Financial Management: Opportunities and Challenges

The International Monetary System

The Balance of Payments

The Foreign Exchange Market

International Parity Conditions

Foreign Currency Derivatives: Futures and Options

Interest Risk and Swaps

Foreign Exchange Rate Determination and Intervention

Transaction Exposure

Translation Exposure

Operating Exposure

Global Cost and Availability of Capital

Funding the Multinational Firm

Multinational Tax Management

International Trade Finance

Foreign Direct Investment and Political Risk

Multinational Capital Budgeting and Cross-Border Acquisitions

Filters

Exam 4: Financial Goals and Corporate Governance

The number of publicly traded firms:

The stakeholder capitalism model:

Which of the following broad topics is NOT identified as an area to be established as good corporate governance practice by the Organization for Economic Cooperation and Development (OECD)?

In finance, an efficient market is one in which:

Since movements between exchanges typically are a zero sum within a country, and spinouts and bulletin board movements are few in number, real growth in listings comes from IPOs.

The stakeholder capitalism model does not assume that equity markets are either efficient or inefficient.

According to the authors, dual classes of voting stock are the norm in non-Anglo-American markets.

Agency theory states that unsystematic risk can be eliminated through diversification.

The Sarbanes-Oxley Act, passed by the U.S. Congress in July 2002, was designed to:

Which of the following is a reason why managers act to maximize shareholder wealth in Anglo-American markets?

According to recent research, family-owned firms in some highly-developed economies typically outperform publicly-owned firms.

Which of the following is generally NOT considered to be a viable operational goal for a firm?

Systematic risk can be defined as:

If share price rises from $12 to $15 per share, and pays a dividend of $1 per share, what was the rate of return to shareholders?

Investor protection is typically better in countries with codified civil law (the Code Napoleon) than in countries with a legal system based in English common law.

In recent years the trend has been for markets to increasing focus on the shareholder wealth form of wealth maximization.

The Stakeholder Capitalism Model (SCM):

The stakeholder capitalism model (SCM) holds that total risk (operational and financial) is more important than just systematic risk.

Companies that are delisted cease to trade.

Which of the following is NOT commonly associated with a government affiliated form of corporate governance regime?

Multinational Financial Management: Opportunities and Challenges

The International Monetary System

The Balance of Payments

The Foreign Exchange Market

International Parity Conditions

Foreign Currency Derivatives: Futures and Options

Interest Risk and Swaps

Foreign Exchange Rate Determination and Intervention

Transaction Exposure

Translation Exposure

Operating Exposure

Global Cost and Availability of Capital

Funding the Multinational Firm

Multinational Tax Management

International Trade Finance

Foreign Direct Investment and Political Risk

Multinational Capital Budgeting and Cross-Border Acquisitions

Filters