Question 1

The prime transmitter of global competitive forces is the

Accepted Answer

A) public utility firm 
B) financial management experience of the U.S.markets 
C) the multinational corporation 
D) the Federal Reserve System of the U.S. 
A) public utility firm 
B) financial management experience of the U.S.markets 
C) the multinational corporation 
D) the Federal Reserve System of the U.S. C

Question 2

The value of good financial management is ___________ in the global markets because of the much greater probability of market imperfections and multiple tax rates.

Accepted Answer

A) minimized 
B) neutralized 
C) enhanced 
D) arbitraged away 
A) minimized 
B) neutralized 
C) enhanced 
D) arbitraged away C

Question 3

Although a firm may be interested in expanding overseas,it may not have the option to acquire a local operation.This type of challenge is most common in

Accepted Answer

A) the European Union 
B) the United States 
C) Japan 
D) developing countries 
A) the European Union 
B) the United States 
C) Japan 
D) developing countries D

Question 4

Companies gradually increase their commitment to international business with strategies that are progressively more sophisticated.Which one of the following steps is NOT one of the steps?

Accepted Answer

A) exporting 
B) setting up a sales subsidiary 
C) setting up a distribution system 
D) creating a legal entity in the new target country 
A) exporting 
B) setting up a sales subsidiary 
C) setting up a distribution system 
D) creating a legal entity in the new target country

Question 5

The multinational financial system does NOT enable companies to

Accepted Answer

A) avoid currency controls 
B) reduce taxes 
C) access lower cost financing sources 
D) avoid exchange rate risk 
A) avoid currency controls 
B) reduce taxes 
C) access lower cost financing sources 
D) avoid exchange rate risk

Question 6

Which of the following is generally a licensing rather that an exporting opportunity for a multinational looking to expand globally?

Accepted Answer

A) The firm has a product that can be shipped without adaptation. 
B) The firm is seeking to market a specific product or process technology that can be written down and transmitted objectively. 
C) The firm has a product such as a new device that is technologically advanced. 
D) A firm that has a specialized cost-saving equipment. 
A) The firm has a product that can be shipped without adaptation. 
B) The firm is seeking to market a specific product or process technology that can be written down and transmitted objectively. 
C) The firm has a product such as a new device that is technologically advanced. 
D) A firm that has a specialized cost-saving equipment.

Question 7

According to the capital asset pricing model

Accepted Answer

A) only the systematic component of risk affects the required return 
B) foreign investments whose returns are uncorrelated with the market's return should have a higher required return than comparable domestic investments 
C) total risk of the investment is most relevant for small to medium-sized firms 
D) diversification is secondary to risk levels of the investment 
A) only the systematic component of risk affects the required return 
B) foreign investments whose returns are uncorrelated with the market's return should have a higher required return than comparable domestic investments 
C) total risk of the investment is most relevant for small to medium-sized firms 
D) diversification is secondary to risk levels of the investment

Question 8

For the multinational corporation,which one of the following complements to the integration of world wide operations is MOST critical?

Accepted Answer

A) flexibility 
B) adaptability 
C) speed 
D) economies of scale of distribution 
A) flexibility 
B) adaptability 
C) speed 
D) economies of scale of distribution

Question 9

The primary objective of the multinational corporation is to

Accepted Answer

A) maximize shareholder wealth 
B) maximize world production 
C) minimize debt 
D) minimize the cost of doing business globally 
A) maximize shareholder wealth 
B) maximize world production 
C) minimize debt 
D) minimize the cost of doing business globally

Question 10

Which of the following did NOT accelerate the growth of the global economy in the past twenty years?

Accepted Answer

A) the U.S.-Canada-Mexico free-trade pact 
B) the creation of the European Union 
C) China's entrance into the WTO 
D) the first Iraq War 
A) the U.S.-Canada-Mexico free-trade pact 
B) the creation of the European Union 
C) China's entrance into the WTO 
D) the first Iraq War

Question 11

Which of the following is an example of reverse foreign investment?

Accepted Answer

A) Honda builds a factory in Ohio 
B) Apple builds a plant in Ireland that exports to the United States 
C) British Telecom issues new stock in the United States 
D) American investors buy shares in Sony 
A) Honda builds a factory in Ohio 
B) Apple builds a plant in Ireland that exports to the United States 
C) British Telecom issues new stock in the United States 
D) American investors buy shares in Sony

Question 12

____________ is defined as the purchase of assets or commodities on one market for immediate resale on another in order to profit form a price discrepancy.

Accepted Answer

A) internationalization 
B) arbitrage 
C) financing 
D) total risk 
A) internationalization 
B) arbitrage 
C) financing 
D) total risk

Question 13

According to the efficient market hypothesis,which one of the following is NOT correct?

Accepted Answer

A) markets place a premium on the future 
B) today's stock price is the best predictor of tomorrow's stock price 
C) stock prices reflect all available information 
D) today's stock price incorporates the past history of prices 
A) markets place a premium on the future 
B) today's stock price is the best predictor of tomorrow's stock price 
C) stock prices reflect all available information 
D) today's stock price incorporates the past history of prices

Question 14

___________ were the earliest multinationals.

Accepted Answer

A) raw-material seekers 
B) market seekers 
C) cost minimizers 
D) oil companies 
A) raw-material seekers 
B) market seekers 
C) cost minimizers 
D) oil companies

Question 15

Referring to the text,into which category of multinational is IBM most likely to fall?

Accepted Answer

A) raw materials seeker 
B) market seeker 
C) cost minimizer 
D) hedge fund 
A) raw materials seeker 
B) market seeker 
C) cost minimizer 
D) hedge fund

Question 16

Critics of the multinational corporation would not fault its tendency to

Accepted Answer

A) shift production from one location to another in search of lower costs 
B) avoid taxes 
C) cause balance of payments difficulties 
D) engage in environmental protection measures 
A) shift production from one location to another in search of lower costs 
B) avoid taxes 
C) cause balance of payments difficulties 
D) engage in environmental protection measures

Question 17

Multinational firms

Accepted Answer

A) are riskier than purely domestic firms because of the exposures of operating abroad 
B) are less risky than purely domestic firms because of international diversification 
C) may be less risky than domestic firms if the added risks of operating overseas are more than offset by the ability to operate in nations whose economic cycles are not perfectly in phase 
D) invest in developed countries only and avoid developing economies 
A) are riskier than purely domestic firms because of the exposures of operating abroad 
B) are less risky than purely domestic firms because of international diversification 
C) may be less risky than domestic firms if the added risks of operating overseas are more than offset by the ability to operate in nations whose economic cycles are not perfectly in phase 
D) invest in developed countries only and avoid developing economies

Question 18

Given the added risks associated with doing business abroad,companies should

Accepted Answer

A) limit their foreign sales to less than 40% of total sales 
B) limit their foreign assets to less than 30% of total assets 
C) avoid foreign markets altogether unless they can earn a return in excess of the return they earn in their domestic market 
D) not limit their foreign sales at all 
A) limit their foreign sales to less than 40% of total sales 
B) limit their foreign assets to less than 30% of total assets 
C) avoid foreign markets altogether unless they can earn a return in excess of the return they earn in their domestic market 
D) not limit their foreign sales at all

Question 19

Which one of the following is a consequence of increased global competition?

Accepted Answer

A) the creation of new steel plants in the old industrial countries 
B) the end of free-trade agreements between governments of the world 
C) increased comfort level of trade unions with the consequences 
D) increased anxiety among workers in the old industrial countries 
A) the creation of new steel plants in the old industrial countries 
B) the end of free-trade agreements between governments of the world 
C) increased comfort level of trade unions with the consequences 
D) increased anxiety among workers in the old industrial countries

Question 20

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

Accepted Answer

A) product life cycle theory of international trade 
B) theory of diversification 
C) doctrine of comparative advantage 
D) theory of globalization 
A) product life cycle theory of international trade 
B) theory of diversification 
C) doctrine of comparative advantage 
D) theory of globalization

The prime transmitter of global competitive forces is the

The value of good financial management is ___________ in the global markets because of the much greater probability of market imperfections and multiple tax rates.

Although a firm may be interested in expanding overseas,it may not have the option to acquire a local operation.This type of challenge is most common in

Companies gradually increase their commitment to international business with strategies that are progressively more sophisticated.Which one of the following steps is NOT one of the steps?

The multinational financial system does NOT enable companies to

Which of the following is generally a licensing rather that an exporting opportunity for a multinational looking to expand globally?

According to the capital asset pricing model

For the multinational corporation,which one of the following complements to the integration of world wide operations is MOST critical?

The primary objective of the multinational corporation is to

Which of the following did NOT accelerate the growth of the global economy in the past twenty years?

Which of the following is an example of reverse foreign investment?

____________ is defined as the purchase of assets or commodities on one market for immediate resale on another in order to profit form a price discrepancy.

According to the efficient market hypothesis,which one of the following is NOT correct?

___________ were the earliest multinationals.

Referring to the text,into which category of multinational is IBM most likely to fall?

Critics of the multinational corporation would not fault its tendency to

Multinational firms

Given the added risks associated with doing business abroad,companies should

Which one of the following is a consequence of increased global competition?

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

The Determination of Exchange Rates

The International Monetary System

Parity Conditions in International Finance and Currency Forecasting

The Balance of Payments and International Economic Linkages

Country Risk Analysis

The Foreign Exchange Market

Currency Futures and Options Markets

Swaps and Interest Rate Derivatives

Measuring and Managing Translation and Transaction Exposure

Measuring and Managing Economic Exposure

International Financing and National Capital Markets

Functions of Euromarkets

The Cost of Capital for Foreign Investments

Examining International Portfolio Investing

Corporate Strategy and Foreign Direct Investment

Capital Budgeting for the Multinational Corporation

Financing Foreign Trade

Current Asset Management and Short-Term Financing

Managing the Multinational Financial System

Filters

Exam 1: Introduction

The prime transmitter of global competitive forces is the

The value of good financial management is ___________ in the global markets because of the much greater probability of market imperfections and multiple tax rates.

Although a firm may be interested in expanding overseas,it may not have the option to acquire a local operation.This type of challenge is most common in

Companies gradually increase their commitment to international business with strategies that are progressively more sophisticated.Which one of the following steps is NOT one of the steps?

The multinational financial system does NOT enable companies to

Which of the following is generally a licensing rather that an exporting opportunity for a multinational looking to expand globally?

According to the capital asset pricing model

For the multinational corporation,which one of the following complements to the integration of world wide operations is MOST critical?

The primary objective of the multinational corporation is to

Which of the following did NOT accelerate the growth of the global economy in the past twenty years?

Which of the following is an example of reverse foreign investment?

____________ is defined as the purchase of assets or commodities on one market for immediate resale on another in order to profit form a price discrepancy.

According to the efficient market hypothesis,which one of the following is NOT correct?

___________ were the earliest multinationals.

Referring to the text,into which category of multinational is IBM most likely to fall?

Critics of the multinational corporation would not fault its tendency to

Multinational firms

Given the added risks associated with doing business abroad,companies should

Which one of the following is a consequence of increased global competition?

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

The Determination of Exchange Rates

The International Monetary System

Parity Conditions in International Finance and Currency Forecasting

The Balance of Payments and International Economic Linkages

Country Risk Analysis

The Foreign Exchange Market

Currency Futures and Options Markets

Swaps and Interest Rate Derivatives

Measuring and Managing Translation and Transaction Exposure

Measuring and Managing Economic Exposure

International Financing and National Capital Markets

Functions of Euromarkets

The Cost of Capital for Foreign Investments

Examining International Portfolio Investing

Corporate Strategy and Foreign Direct Investment

Capital Budgeting for the Multinational Corporation

Financing Foreign Trade

Current Asset Management and Short-Term Financing

Managing the Multinational Financial System

Filters