Exam 11: Optimizing and Financing Working Capital

U.S.commercial paper is only issued by firms with very high credit ratings because:

The process of selling receivable for an amount less than the face value of the receivable is called:

The traditional argument for maintaining small cash balances says that:

The most liquid of assets and a necessity for working capital transactions is:

Explicit transaction costs,such as __________________________ have been reduced because of increased efficiencies in banking.

A bank loan made for a fixed period of time at a fixed interest rate requiring periodic payments of principle and interest is called a:

Why have opportunity costs of maintaining cash balances decreased in importance in recent years?

What sort of bad decisions do excessive cash balances lead managers to make?

A firm's capacity to obtain financing as necessary is called:

What is the difference between ex ante and ex post financing costs,and what effects do these costs have on an MNC's financing strategy?

The International Fisher Effect suggests that if a firm borrows in a lower interest foreign currency:

What are opportunity costs in the context of maintaining cash balances?

Higher currency risk calls for:

The Euro commercial paper is:

Short-term government obligations,generally known as T-bills,offer investors:

"Ex ante" financing costs refer to:

The primary drawback of T-bills is:

In the duration matching method of evaluating financing,the implicit assumption is that:

If an MNC borrows in a foreign currency and the value of that currency appreciates during the term of the loan:

How can the way a firm arranges its financing limit its currency risk?