Exam 10: Global Capital Markets

A bond that is issued by Nestle,a Swiss company,which is denominated in yen and sold to residents of Japan is most likely a ________.

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

Tax law variations around the world affect an MNE's capital budgeting,financing,and method of setting transfer prices.

What are the major sources of external funds for an MNE's normal operations? Why do MNEs use offshore financial centers to raise funds?

Which of the following is a characteristic of most offshore financial centers?

A major problem with MNEs using offshore financial centers is that they may give unfair tax advantages to companies.

The principle by which the tax authorities allow firms to reduce their tax liability by the amount of income taxes paid to a foreign government is known as a tax credit.

ADRs cannot be exchanged for the underlying shares of the foreign stock,therefore,arbitrage cannot keep the prices in line with the foreign price of the stock.

Two forms of equity financing are private placement with a venture capital firm and the equity capital market,otherwise known as the stock market.

Which of the following is NOT an advantage associated with Eurocurrencies?

The long-term financing dimension of cash management ________.

What is the difference between translation exposure,transaction exposure,and economic exposure?

Low-cost Eurocurrency loans can be obtained in offshore financial centers.

What are the major sources of internal funds for MNEs? Why do many MNEs acquire external funds through the Eurodollar market?

Which of the following has extensive banking activities involving short-term financial transactions?

The stock market is also known as the ________.

If a foreign subsidiary is located in a low tax country,the parent company would probably use a ________.

Subpart F income is ________.

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

The typical tax-haven subsidiary owns the common stock of its related operating foreign subsidiaries.