INTERNATIONAL FINANCIAL
MANAGEMENT 9TH EDITION CHEOL EUN
BRUCE RESNICK TEST BANK ALL
CHAPTERS 100% ORIGINAL VERIFIED A+
FINAL STUDY GUIDE 2026 SOLVED
QUESTIONS FULLY CORRECT
⫸ The Sarbanes-Oxley Act caused corporate governance of MNCs to
_________; it makes executives ____ accountable for verifying financial
statements. Answer: c. improve; more
⫸ Which of the following is mentioned in the text as a theory of
international business? Answer: a. theory of comparative advantage
b. imperfect markets theory
c. product cycle theory
All of the above are mentioned in the text as theories of international
business
⫸ Assume that an American firm wants to engage in international
business in which it establishes a large subsidiary in the foreign country.
This strategy definitely represents ______________. Answer: direct
foreign investment
⫸ The agency costs of an MNC are likely to be higher if it Answer: a.
scatters its subsidiaries across many foreign countries.
, ⫸ Compared to international trade, direct foreign investment generally
results in ____ exposure to international political risk and ____ exposure
to international economic conditions. Answer: higher; higher
⫸ Which of the following is not one of the more common methods used
by MNCs to improve their internal control process? Answer: c. requiring
executives to forecast future exchange rates
⫸ The valuation of an MNC should decline when an event causes the
expected cash flows from foreign subsidiaries to ____ and when the
foreign currencies denominating these cash flows are expected to ____.
Answer: decrease; depreciate
⫸ According to the text, the valuation of an MNC with foreign
subsidiaries is directly affected by: Answer: a. exchange rate
fluctuations
b. foreign political conditions
c. foreign economic conditions
It is affected by all of the above.
⫸ Zest Co. has a subsidiary in Mexico. The expected cash flows in
pesos to be received in the future from this subsidiary have not changed
since last month, but the valuation of Zest Co. has increased since last
month. What could have caused this increase in value? Answer: c.
appreciation of the Mexican peso
MANAGEMENT 9TH EDITION CHEOL EUN
BRUCE RESNICK TEST BANK ALL
CHAPTERS 100% ORIGINAL VERIFIED A+
FINAL STUDY GUIDE 2026 SOLVED
QUESTIONS FULLY CORRECT
⫸ The Sarbanes-Oxley Act caused corporate governance of MNCs to
_________; it makes executives ____ accountable for verifying financial
statements. Answer: c. improve; more
⫸ Which of the following is mentioned in the text as a theory of
international business? Answer: a. theory of comparative advantage
b. imperfect markets theory
c. product cycle theory
All of the above are mentioned in the text as theories of international
business
⫸ Assume that an American firm wants to engage in international
business in which it establishes a large subsidiary in the foreign country.
This strategy definitely represents ______________. Answer: direct
foreign investment
⫸ The agency costs of an MNC are likely to be higher if it Answer: a.
scatters its subsidiaries across many foreign countries.
, ⫸ Compared to international trade, direct foreign investment generally
results in ____ exposure to international political risk and ____ exposure
to international economic conditions. Answer: higher; higher
⫸ Which of the following is not one of the more common methods used
by MNCs to improve their internal control process? Answer: c. requiring
executives to forecast future exchange rates
⫸ The valuation of an MNC should decline when an event causes the
expected cash flows from foreign subsidiaries to ____ and when the
foreign currencies denominating these cash flows are expected to ____.
Answer: decrease; depreciate
⫸ According to the text, the valuation of an MNC with foreign
subsidiaries is directly affected by: Answer: a. exchange rate
fluctuations
b. foreign political conditions
c. foreign economic conditions
It is affected by all of the above.
⫸ Zest Co. has a subsidiary in Mexico. The expected cash flows in
pesos to be received in the future from this subsidiary have not changed
since last month, but the valuation of Zest Co. has increased since last
month. What could have caused this increase in value? Answer: c.
appreciation of the Mexican peso
