Exam 1: Multinational Financial Management: an Overview

In comparing exporting to direct foreign investment (DFI), an exporting operation will likely incur fixed production costs and transportation costs than DFI.

(Multiple Choice)

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Question 61

A centralized management style, where major decisions about a foreign subsidiary are made by the parent company, results in an increase in agency costs.

(True/False)

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Question 62

The Sarbanes-Oxley Act ensures a more transparent process for managers to report on the productivity and financial condition of their firm.

(True/False)

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Question 63

The least risky method by which firms conduct international business is:

(Multiple Choice)

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Question 64

Which of the following does not constitute a form of direct foreign investment?

(Multiple Choice)

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Question 65

If markets were perfect, then labor and other costs of production would be perfectly stable (no movement across borders).

(True/False)

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Question 66

Under the Imperfect Markets Theory, it is assumed that factors of production are entirely mobile, so that firms can capitalize on a foreign country's resources.

(True/False)

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Question 67

U.S.-based MNCs are typically not monitored by mutual funds and pension funds, as these institutions rarely hold stock in MNCs.

(True/False)

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Question 68

Due to the risks involved in international business, firms should:

(Multiple Choice)

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Question 69

If a U.S.-based MNC focused completely on importing, then its valuation would likely be adversely affected if most currencies were expected to appreciate against the dollar over time.

(True/False)

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Question 70

Which of the following theories identifies the non-transferability of resources as a reason for international business?

(Multiple Choice)

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Question 71

Which of the following theories identifies specialization as a reason for international business?

(Multiple Choice)

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Question 72

Assume that an MNC has a subsidiary in Italy, which exports its products to various countries in Europe. Since all of the countries where it exports use Euro as their currency, this MNC is not subject to the exchange rate risk.

(True/False)

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Question 73

The agency costs of an MNC are likely to be lower if it:

(Multiple Choice)

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Question 74

Institutional investors such as mutual funds or pension funds which have large holdings of an MNC's stock do not normally want to take control of it and therefore have no influence over management of the MNC.

(True/False)

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Question 75

One of the most prevalent factors conflicting with the realization of the goal of an MNC is the existence of agency problems.

(True/False)

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Question 76

Under the Product Cycle Theory, foreign demand can be initially satisfied by exporting.

(True/False)

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Question 77

MNCs can improve their internal control process by all of the following, except:

(Multiple Choice)

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Question 78

The most risky method(s) by which firms conduct international business is (are):

(Multiple Choice)

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Question 79

Showing 61 - 79 of 79

In comparing exporting to direct foreign investment (DFI), an exporting operation will likely incur fixed production costs and transportation costs than DFI.

A centralized management style, where major decisions about a foreign subsidiary are made by the parent company, results in an increase in agency costs.

The Sarbanes-Oxley Act ensures a more transparent process for managers to report on the productivity and financial condition of their firm.

The least risky method by which firms conduct international business is:

Which of the following does not constitute a form of direct foreign investment?

If markets were perfect, then labor and other costs of production would be perfectly stable (no movement across borders).

Under the Imperfect Markets Theory, it is assumed that factors of production are entirely mobile, so that firms can capitalize on a foreign country's resources.

U.S.-based MNCs are typically not monitored by mutual funds and pension funds, as these institutions rarely hold stock in MNCs.

Due to the risks involved in international business, firms should:

If a U.S.-based MNC focused completely on importing, then its valuation would likely be adversely affected if most currencies were expected to appreciate against the dollar over time.

Which of the following theories identifies the non-transferability of resources as a reason for international business?

Which of the following theories identifies specialization as a reason for international business?

Assume that an MNC has a subsidiary in Italy, which exports its products to various countries in Europe. Since all of the countries where it exports use Euro as their currency, this MNC is not subject to the exchange rate risk.

The agency costs of an MNC are likely to be lower if it:

Institutional investors such as mutual funds or pension funds which have large holdings of an MNC's stock do not normally want to take control of it and therefore have no influence over management of the MNC.

One of the most prevalent factors conflicting with the realization of the goal of an MNC is the existence of agency problems.

Under the Product Cycle Theory, foreign demand can be initially satisfied by exporting.

MNCs can improve their internal control process by all of the following, except:

The most risky method(s) by which firms conduct international business is (are):

International Flow of Funds

International Financial Markets

Exchange Rate Determination

Currency Derivatives

Government Influence on Exchange Rates

International Arbitrage and Interest Rate Parity

Relationships Among Inflation, Interest Rates, and Exchange Rates

Forecasting Exchange Rates

Measuring Exposure to Exchange Rate Fluctuations

Managing Transaction Exposure

Managing Economic Exposure and Translation Exposure

Direct Foreign Investment

Multinational Capital Budgeting

International Corporate Governance and Control

Country Risk Analysis

Multinational Cost of Capital and Capital Structure

Long-Term Debt Financing

Financing International Trade

Short-Term Financing

International Cash Management

Filters

Exam 1: Multinational Financial Management: an Overview

In comparing exporting to direct foreign investment (DFI), an exporting operation will likely incur ____ fixed production costs and ____ transportation costs than DFI.

A centralized management style, where major decisions about a foreign subsidiary are made by the parent company, results in an increase in agency costs.

The Sarbanes-Oxley Act ensures a more transparent process for managers to report on the productivity and financial condition of their firm.

The least risky method by which firms conduct international business is:

Which of the following does not constitute a form of direct foreign investment?

If markets were perfect, then labor and other costs of production would be perfectly stable (no movement across borders).

Under the Imperfect Markets Theory, it is assumed that factors of production are entirely mobile, so that firms can capitalize on a foreign country's resources.

U.S.-based MNCs are typically not monitored by mutual funds and pension funds, as these institutions rarely hold stock in MNCs.

Due to the risks involved in international business, firms should:

If a U.S.-based MNC focused completely on importing, then its valuation would likely be adversely affected if most currencies were expected to appreciate against the dollar over time.

Which of the following theories identifies the non-transferability of resources as a reason for international business?

Which of the following theories identifies specialization as a reason for international business?

Assume that an MNC has a subsidiary in Italy, which exports its products to various countries in Europe. Since all of the countries where it exports use Euro as their currency, this MNC is not subject to the exchange rate risk.

The agency costs of an MNC are likely to be lower if it:

Institutional investors such as mutual funds or pension funds which have large holdings of an MNC's stock do not normally want to take control of it and therefore have no influence over management of the MNC.

One of the most prevalent factors conflicting with the realization of the goal of an MNC is the existence of agency problems.

Under the Product Cycle Theory, foreign demand can be initially satisfied by exporting.

MNCs can improve their internal control process by all of the following, except:

The most risky method(s) by which firms conduct international business is (are):

International Flow of Funds

International Financial Markets

Exchange Rate Determination

Currency Derivatives

Government Influence on Exchange Rates

International Arbitrage and Interest Rate Parity

Relationships Among Inflation, Interest Rates, and Exchange Rates

Forecasting Exchange Rates

Measuring Exposure to Exchange Rate Fluctuations

Managing Transaction Exposure

Managing Economic Exposure and Translation Exposure

Direct Foreign Investment

Multinational Capital Budgeting

International Corporate Governance and Control

Country Risk Analysis

Multinational Cost of Capital and Capital Structure

Long-Term Debt Financing

Financing International Trade

Short-Term Financing

International Cash Management

Filters

In comparing exporting to direct foreign investment (DFI), an exporting operation will likely incur fixed production costs and transportation costs than DFI.