Question 1

Depositary receipts traded outside the United States are called ________ depositary receipts.

Accepted Answer

A)  Euro 
B)  Global 
C)  American 
D)  None of the above 
A)  Euro 
B)  Global 
C)  American 
D)  None of the above

Question 2

Which of the following countries has the largest market for domestic bonds?

Accepted Answer

A)  the U.K. 
B)  the U.S. 
C)  Japan 
D)  China 
A)  the U.K. 
B)  the U.S. 
C)  Japan 
D)  China

Question 3

The OECD is concerned about transfer pricing practices because ________.

Accepted Answer

A)  transfer pricing can help maximize a company's worldwide tax liability 
B)  transfer prices tend to be higher in industrial than developing countries 
C)  governments use transfer prices to manipulate companies' investment strategies 
D)  companies use transfer prices to manipulate prices and therefore taxes 
A)  transfer pricing can help maximize a company's worldwide tax liability 
B)  transfer prices tend to be higher in industrial than developing countries 
C)  governments use transfer prices to manipulate companies' investment strategies 
D)  companies use transfer prices to manipulate prices and therefore taxes

Question 4

The primary objective of multinational tax planning is to minimize the firm's worldwide tax burden.

Accepted Answer

A) True 
 B)False

Question 5

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 6

A financial manager in an international company would most likely be responsible for all of the following activities except.

Accepted Answer

A)  managing currency risk 
B)  assessing foreign market entry 
C)  learning global tax systems 
D)  overseeing employee repatriation 
A)  managing currency risk 
B)  assessing foreign market entry 
C)  learning global tax systems 
D)  overseeing employee repatriation

Question 7

Which of the following is a characteristic of the Eurocurrency market?

Accepted Answer

A)  The Eurocurrency market is both short and medium term. 
B)  Private borrowers are the major players in the Eurocurrency market. 
C)  The Eurocurrency market is a retail, rather than wholesale, market. 
D)  The interest rates in the Eurocurrency market are about the same as in domestic markets. 
A)  The Eurocurrency market is both short and medium term. 
B)  Private borrowers are the major players in the Eurocurrency market. 
C)  The Eurocurrency market is a retail, rather than wholesale, market. 
D)  The interest rates in the Eurocurrency market are about the same as in domestic markets.

Question 8

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 9

The concept of leveraging in finance refers to ________.

Accepted Answer

A)  the degree to which companies rely on foreign exchange to fund operations 
B)  how a company hedges its foreign currency obligations 
C)  the degree to which a firm funds the growth of a business by debt 
D)  how much cash the CFO has in the bank 
A)  the degree to which companies rely on foreign exchange to fund operations 
B)  how a company hedges its foreign currency obligations 
C)  the degree to which a firm funds the growth of a business by debt 
D)  how much cash the CFO has in the bank

Question 10

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

Accepted Answer

A)  A low tax on foreign investment or sales income earned by resident corporations and a low dividend withholding tax on dividends paid to the parent firm. 
B)  A stable currency to permit easy conversion of funds into and out of the local currency. This requirement can be met by permitting and facilitating the use of Eurocurrencies. 
C)  A stable government that encourages the establishment of foreign-owned financial and service facilities within its borders. 
D)  All of the above are tax-haven subsidiary characteristics. 
A)  A low tax on foreign investment or sales income earned by resident corporations and a low dividend withholding tax on dividends paid to the parent firm. 
B)  A stable currency to permit easy conversion of funds into and out of the local currency. This requirement can be met by permitting and facilitating the use of Eurocurrencies. 
C)  A stable government that encourages the establishment of foreign-owned financial and service facilities within its borders. 
D)  All of the above are tax-haven subsidiary characteristics.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

A Eurocurrency is any currency that is banked outside its country of origin.

Accepted Answer

A) True 
 B)False

Question 13

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 14

The international bond market is a major source of debt financing for which of the following?

Accepted Answer

A)  world governments 
B)  regional organizations 
C)  small firms 
D)  small businesses 
A)  world governments 
B)  regional organizations 
C)  small firms 
D)  small businesses

Question 15

________ focus on offering banking and other financial services to nonresident customers.

Accepted Answer

A)  Subsidiary banks 
B)  Branch banks 
C)  Affiliated banks 
D)  Offshore financial centers 
A)  Subsidiary banks 
B)  Branch banks 
C)  Affiliated banks 
D)  Offshore financial centers

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

The Eurocurrency market is a retail,rather than wholesale,market.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is unique to foreign project assessment in the capital budgeting decision?

Accepted Answer

A)  Project cash flows must be determined. 
B)  Parent cash flows and project cash flows are the same. 
C)  Local tax issues affect the determination of free cash flows and the remittance of earnings. 
D)  Inflation is not an issue, because companies use the same inflation rate in both the domestic and international setting in order to make the analysis more comparative. 
A)  Project cash flows must be determined. 
B)  Parent cash flows and project cash flows are the same. 
C)  Local tax issues affect the determination of free cash flows and the remittance of earnings. 
D)  Inflation is not an issue, because companies use the same inflation rate in both the domestic and international setting in order to make the analysis more comparative.

Question 19

The degree to which a firm funds the growth of a business by debt is known as ________.

Accepted Answer

A)  leveraging 
B)  equity financing 
C)  hedging 
D)  after-tax cost of debt 
A)  leveraging 
B)  equity financing 
C)  hedging 
D)  after-tax cost of debt

Question 20

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

Accepted Answer

A) True 
 B)False

Depositary receipts traded outside the United States are called ________ depositary receipts.

Which of the following countries has the largest market for domestic bonds?

The OECD is concerned about transfer pricing practices because ________.

The primary objective of multinational tax planning is to minimize the firm's worldwide tax burden.

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

A financial manager in an international company would most likely be responsible for all of the following activities except.

Which of the following is a characteristic of the Eurocurrency market?

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

The concept of leveraging in finance refers to ________.

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

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

A Eurocurrency is any currency that is banked outside its country of origin.

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

The international bond market is a major source of debt financing for which of the following?

________ focus on offering banking and other financial services to nonresident customers.

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

The Eurocurrency market is a retail,rather than wholesale,market.

Which of the following is unique to foreign project assessment in the capital budgeting decision?

The degree to which a firm funds the growth of a business by debt is known as ________.

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

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

Depositary receipts traded outside the United States are called ________ depositary receipts.

Which of the following countries has the largest market for domestic bonds?

The OECD is concerned about transfer pricing practices because ________.

The primary objective of multinational tax planning is to minimize the firm's worldwide tax burden.

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

A financial manager in an international company would most likely be responsible for all of the following activities except.

Which of the following is a characteristic of the Eurocurrency market?

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

The concept of leveraging in finance refers to ________.

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

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

A Eurocurrency is any currency that is banked outside its country of origin.

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

The international bond market is a major source of debt financing for which of the following?

________ focus on offering banking and other financial services to nonresident customers.

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

The Eurocurrency market is a retail,rather than wholesale,market.

Which of the following is unique to foreign project assessment in the capital budgeting decision?

The degree to which a firm funds the growth of a business by debt is known as ________.

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

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