Question 1

Which one of the following is NOT an external source of corporate funding?

Accepted Answer

A)  bank loan 
B)  retained earnings 
C)  debt security 
D)  equity 
A)  bank loan 
B)  retained earnings 
C)  debt security 
D)  equity B

Question 2

What is the name given to the banks that perform both traditional commercial banking and investment banking functions?

Accepted Answer

A)  merchant banks 
B)  universal banks 
C)  full-service banks 
D)  affiliate banks 
A)  merchant banks 
B)  universal banks 
C)  full-service banks 
D)  affiliate banks A

Question 3

Which one of the following statements is true for the centralized debt denomination model?

Accepted Answer

A)  The debts for both the parent company and its foreign subsidiaries are denominated in the home currency of the parent company. 
B)  The debt service payments are denominated in the currency in which the subsidiary's revenues are received. 
C)  The debts for both the parent company and its foreign subsidiaries are denominated in the currency of the largest subsidiary. 
D)  The debt service payments are denominated in the currency in which the subsidiary's revenues are received which does not balance foreign assets against foreign liabilities. 
A)  The debts for both the parent company and its foreign subsidiaries are denominated in the home currency of the parent company. 
B)  The debt service payments are denominated in the currency in which the subsidiary's revenues are received. 
C)  The debts for both the parent company and its foreign subsidiaries are denominated in the currency of the largest subsidiary. 
D)  The debt service payments are denominated in the currency in which the subsidiary's revenues are received which does not balance foreign assets against foreign liabilities. A

Question 4

Which of the following bonds is least subject to the regulations of any particular country?

Accepted Answer

A)  domestic bonds 
B)  foreign bonds 
C)  domestic debentures 
D)  dragon bonds 
A)  domestic bonds 
B)  foreign bonds 
C)  domestic debentures 
D)  dragon bonds

Question 5

What are the three main sources of financing for any firm?

Accepted Answer

Corporations rely on three pri

Question 6

When an MNC issues low interest rate bonds in another country,what is the ultimate cost of the debt?

Accepted Answer

A)  government actions 
B)  interest rates in the global markets 
C)  currency movements 
D)  purchasing power 
A)  government actions 
B)  interest rates in the global markets 
C)  currency movements 
D)  purchasing power

Question 7

The hedging strategy that offsets foreign assets with foreign liabilities is known as ________ hedge.

Accepted Answer

A)  an income-statement 
B)  balance-sheet 
C)  decentralized debt 
D)  decentralized equity 
A)  an income-statement 
B)  balance-sheet 
C)  decentralized debt 
D)  decentralized equity

Question 8

The long-term debts of eurobanks are known as ________.

Accepted Answer

A)  LIBOR loans 
B)  syndicates 
C)  eurocredits 
D)  euronotes 
A)  LIBOR loans 
B)  syndicates 
C)  eurocredits 
D)  euronotes

Question 9

Which one of the two main segments of the international bond market has the least local regulation? Why?

Accepted Answer

One segment of the international bond ma

Question 10

Of the two: a foreign branch and a subsidiary bank,which one is more subject to U.S.regulations? Why?

Accepted Answer

A foreign branch of a bank is legally a

Question 11

The ________ is the discount rate or internal rate of return that equates the present value of all the future interest rate and principal payments to the net proceeds received by the issuer.

Accepted Answer

A)  all-in-cost 
B)  internal rate of return 
C)  LIBOR rate 
D)  floating-rate note 
A)  all-in-cost 
B)  internal rate of return 
C)  LIBOR rate 
D)  floating-rate note

Question 12

Value at risk measures the dollar loss that a given portfolio position can experience with ________ probability over a given length of time.

Accepted Answer

A)  1% 
B)  3% 
C)  5% 
D)  10% 
A)  1% 
B)  3% 
C)  5% 
D)  10%

Question 13

What are the major features of the proposed Basel III?

Accepted Answer

The currently discussed major features o

Question 14

Which of the following represent liabilities to a bank?

Accepted Answer

A)  deposits it accepts from its customers and securities it buys 
B)  deposits it accepts from its customers, the borrowing it does in security markets and its equity capital 
C)  the borrowing it does in security markets and the loans it provides 
D)  loans to customers 
A)  deposits it accepts from its customers and securities it buys 
B)  deposits it accepts from its customers, the borrowing it does in security markets and its equity capital 
C)  the borrowing it does in security markets and the loans it provides 
D)  loans to customers

Question 15

Which one of the following would NOT contribute to the positive creditworthiness of the firm?

Accepted Answer

A)  the firm's financial structure 
B)  its profitability 
C)  the number of bank accounts it holds 
D)  the stability of its cash flows 
A)  the firm's financial structure 
B)  its profitability 
C)  the number of bank accounts it holds 
D)  the stability of its cash flows

Question 16

International banks created facilities for sales of short-term,negotiable promissory notes,called ________.

Accepted Answer

A)  eurocredits 
B)  euro commercial paper 
C)  euro-MTNs 
D)  euronotes 
A)  eurocredits 
B)  euro commercial paper 
C)  euro-MTNs 
D)  euronotes

Question 17

Banks that operate in the Eurocurrency markets are known as ________.

Accepted Answer

A)  eurobanks 
B)  eurocredit banks 
C)  euronote banks 
D)  international banking facilities 
A)  eurobanks 
B)  eurocredit banks 
C)  euronote banks 
D)  international banking facilities

Question 18

The sources of funds for a multinational corporation and its subsidiaries can be subdivided into two categories,________ and ________.

Accepted Answer

A)  internally-generated, externally generated 
B)  retained earnings, internally-generated 
C)  capital markets-generated, externally generated 
D)  retained earnings, externally-generated 
A)  internally-generated, externally generated 
B)  retained earnings, internally-generated 
C)  capital markets-generated, externally generated 
D)  retained earnings, externally-generated

Question 19

Which type of bond is issued and traded within the internal market of a single country and denominated in the currency of that country?

Accepted Answer

A)  dragon bond 
B)  domestic bond 
C)  Eurobond 
D)  foreign bond 
A)  dragon bond 
B)  domestic bond 
C)  Eurobond 
D)  foreign bond

Question 20

What is the name given to the straight fixed-rate bond issued in one currency which pays coupon interest in that same currency,but the promised repayment of principal at maturity is denominated in another currency?

Accepted Answer

A)  international bond 
B)  dual-currency bond 
C)  equity-related bond 
D)  foreign bond 
A)  international bond 
B)  dual-currency bond 
C)  equity-related bond 
D)  foreign bond

Exam 11: International Debt Financing

Which one of the following is NOT an external source of corporate funding?

What is the name given to the banks that perform both traditional commercial banking and investment banking functions?

Which one of the following statements is true for the centralized debt denomination model?

Which of the following bonds is least subject to the regulations of any particular country?

What are the three main sources of financing for any firm?

When an MNC issues low interest rate bonds in another country,what is the ultimate cost of the debt?

The hedging strategy that offsets foreign assets with foreign liabilities is known as ________ hedge.

The long-term debts of eurobanks are known as ________.

Which one of the two main segments of the international bond market has the least local regulation? Why?

Of the two: a foreign branch and a subsidiary bank,which one is more subject to U.S.regulations? Why?

The ________ is the discount rate or internal rate of return that equates the present value of all the future interest rate and principal payments to the net proceeds received by the issuer.

Value at risk measures the dollar loss that a given portfolio position can experience with ________ probability over a given length of time.

What are the major features of the proposed Basel III?

Which of the following represent liabilities to a bank?

Which one of the following would NOT contribute to the positive creditworthiness of the firm?

International banks created facilities for sales of short-term,negotiable promissory notes,called ________.

Banks that operate in the Eurocurrency markets are known as ________.

The sources of funds for a multinational corporation and its subsidiaries can be subdivided into two categories,________ and ________.

Which type of bond is issued and traded within the internal market of a single country and denominated in the currency of that country?

What is the name given to the straight fixed-rate bond issued in one currency which pays coupon interest in that same currency,but the promised repayment of principal at maturity is denominated in another currency?

Globalization and the Multinational Corporation

The Foreign Exchange Market

Forward Markets and Transaction Exchange Risk

The Balance of Payments

Exchange Rate Systems

Interest Rate Parity

Speculation and Risk in the Foreign Exchange Market

Purchasing Power Parity and Real Exchange Rates

Measuring and Managing Real Exchange Risk

Exchange Rate Determination and Forecasting

International Equity Financing

International Capital Market Equilibrium

Country and Political Risk

International Capital Budgeting

Additional Topics in International Capital Budgeting

Risk Management and the Foreign Currency Hedging Decision

Financing International Trade

Managing Net Working Capital

Foreign Currency Futures and Options

Interest Rates and Foreign Currency Swaps

Filters

The sources of funds for a multinational corporation and its subsidiaries can be subdivided into two categories, and .