Question 1

What is the primary concern about offshore financial centers?

Accepted Answer

A)  engaging in illegal activities 
B)  enabling firms to avoid taxation 
C)  allowing the transfer of large funds 
D)  existing in politically risky environments 
A)  engaging in illegal activities 
B)  enabling firms to avoid taxation 
C)  allowing the transfer of large funds 
D)  existing in politically risky environments B

Question 2

A major challenge to Global Positioning Systems in providing foreign-exchange services to its clients is that ________.

Accepted Answer

A)  GPS lacks access to major foreign exchange quoting services 
B)  GPS has to constantly upgrade the quality of the services it offers 
C)  GPS cannot provide individualized attention to its customers, so it has to commoditize its product lines 
D)  new regulations have stopped GPS from selling foreign-exchange services that compete with the banks 
A)  GPS lacks access to major foreign exchange quoting services 
B)  GPS has to constantly upgrade the quality of the services it offers 
C)  GPS cannot provide individualized attention to its customers, so it has to commoditize its product lines 
D)  new regulations have stopped GPS from selling foreign-exchange services that compete with the banks B

Question 3

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

Accepted Answer

A) True 
 B)False  False

Question 4

What is capital budgeting? What types of risks are involved? How can an MNE manage these risks?

Accepted Answer

When making a capital budgeting decision

Question 5

A city or country that provides large amounts of funds in currencies other than its own is a(n)________.

Accepted Answer

A)  offshore financial center 
B)  ADR facilitator 
C)  interbank market 
D)  currency regulator 
A)  offshore financial center 
B)  ADR facilitator 
C)  interbank market 
D)  currency regulator

Question 6

The best way for a Euroequity to get a listing in the United States is to issue a(n)________.

Accepted Answer

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

Question 7

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 8

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

Accepted Answer

A)  international stock 
B)  global bond 
C)  global equity 
D)  Eurodollar 
A)  international stock 
B)  global bond 
C)  global equity 
D)  Eurodollar

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 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 11

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

Question 12

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

Accepted Answer

A)  Eurocurrency market 
B)  international bond market 
C)  international equity market 
D)  Euroequity market 
A)  Eurocurrency market 
B)  international bond market 
C)  international equity market 
D)  Euroequity market

Question 13

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 14

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

Accepted Answer

A)  accounting function of the firm 
B)  external auditors 
C)  CFO 
D)  financial marketing manager 
A)  accounting function of the firm 
B)  external auditors 
C)  CFO 
D)  financial marketing manager

Question 15

Assume that U.S.MNE A earns $100,000 of foreign source income,that the tax rate in the foreign country is 40 percent,and that the tax rate in the United States is 35 percent.How much total (both domestic and foreign)tax would the company pay on that foreign source income,assuming that the tax credit principle applies?

Accepted Answer

A)  $40,000 
B)  $35,000 
C)  $75,000 
D)  $5,000 
A)  $40,000 
B)  $35,000 
C)  $75,000 
D)  $5,000

Question 16

Capital budgeting is best described as the ________.

Accepted Answer

A)  process that determines which countries will receive capital investment funds 
B)  procedure for determining the proper mix of debt and equity for a country 
C)  proper management of a country's current assets and liabilities 
D)  simplification of corporate tax procedures 
A)  process that determines which countries will receive capital investment funds 
B)  procedure for determining the proper mix of debt and equity for a country 
C)  proper management of a country's current assets and liabilities 
D)  simplification of corporate tax procedures

Question 17

Each ADR represents ________ of the shares of the underlying foreign stock.

Accepted Answer

A)  a multiple 
B)  100 
C)  1 
D)  ADRs have nothing to do with foreign stocks. 
A)  a multiple 
B)  100 
C)  1 
D)  ADRs have nothing to do with foreign stocks.

Question 18

Global Positioning Solutions Inc.is a Utah-based company that ________.

Accepted Answer

A)  provides location assistance for global executives who travel frequently 
B)  is a division of a banking syndicate in the Western part of the United States 
C)  assists firms that have foreign-exchange needs but that lack in-house foreign-exchange teams 
D)  started out by providing foreign exchange services that were not being offered by commercial banks 
A)  provides location assistance for global executives who travel frequently 
B)  is a division of a banking syndicate in the Western part of the United States 
C)  assists firms that have foreign-exchange needs but that lack in-house foreign-exchange teams 
D)  started out by providing foreign exchange services that were not being offered by commercial banks

Question 19

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 20

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

What is the primary concern about offshore financial centers?

A major challenge to Global Positioning Systems in providing foreign-exchange services to its clients is that ________.

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

What is capital budgeting? What types of risks are involved? How can an MNE manage these risks?

A city or country that provides large amounts of funds in currencies other than its own is a(n)________.

The best way for a Euroequity to get a listing in the United States is to issue a(n)________.

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

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

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

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

MNEs most likely use offshore debt markets ________.

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

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

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

Capital budgeting is best described as the ________.

Each ADR represents ________ of the shares of the underlying foreign stock.

Global Positioning Solutions Inc.is a Utah-based company that ________.

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

Foreign branch income is ________.

Globalization and International Business

The Cultural Environments Facing Business

The Political and Legal Environments Facing Business

The Economic Environments Facing Businesses

International Trade and Factor-Mobility Theory

Governmental Influence on Trade

Cross-National Cooperation and Agreements

Global Foreign-Exchange Markets

The Determination of Exchange Rates

Globalization and Society

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 10: Global Capital Markets

What is the primary concern about offshore financial centers?

A major challenge to Global Positioning Systems in providing foreign-exchange services to its clients is that ________.

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

What is capital budgeting? What types of risks are involved? How can an MNE manage these risks?

A city or country that provides large amounts of funds in currencies other than its own is a(n)________.

The best way for a Euroequity to get a listing in the United States is to issue a(n)________.

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

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

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

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

MNEs most likely use offshore debt markets ________.

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

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

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

Capital budgeting is best described as the ________.

Each ADR represents ________ of the shares of the underlying foreign stock.

Global Positioning Solutions Inc.is a Utah-based company that ________.

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

Foreign branch income is ________.

Globalization and International Business

The Cultural Environments Facing Business

The Political and Legal Environments Facing Business

The Economic Environments Facing Businesses

International Trade and Factor-Mobility Theory

Governmental Influence on Trade

Cross-National Cooperation and Agreements

Global Foreign-Exchange Markets

The Determination of Exchange Rates

Globalization and Society

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