INTERNATIONAL FINANCIAL MANAGEMENT 10TH EDITION
TEST BANK FOR INTERNATIONAL FINANCIAL MANAGEMENT 10TH EDITION BY CHEOL EUN, BRUCE
G. RESNICK & TUUGI CHULUUN COMPLETE CHAPTERS 1-16| A+ ANSWERS WITH ACTUAL QUESTIONS.
1
,INTERNATIONAL FINANCIAL MANAGEMENT 10TH EDITION
TABLE OF CONTENT
PART ONE: Foundations of International Financial Management
1. Globalization and the Multinational Firm
2. International Monetary System
3. Balance of Payments
4. Corporate Governance Around the World
**PART TWO: The Foreign Exchange Market, Exchange Rate Determination,
and Currency Derivatives**
5. The Market for Foreign Exchange
6. International Parity Relationships and Forecasting Foreign Exchange Rates
7. Futures and Options on Foreign Exchange
PART THREE: Foreign Exchange Exposure and Management
8. Management of Transaction Exposure
9. Management of Economic Exposure
10. Management of Translation Exposure
PART FOUR: World Financial Markets and Institutions
11. International Banking and Money Market
12. International Bond Market
13. International Equity Markets
14. Interest Rate and Currency Swaps
15. International Portfolio Investment
PART FIVE: Financial Management of the Multinational Firm
16. Foreign Direct Investment and Cross-Border Acquisitions
17. International Capital Structure and the Cost of Capital
18. International Capital Budgeting
19. Multinational Cash Management
20. International Trade Finance
21. International Tax Environment and Transfer Pricing
2
,INTERNATIONAL FINANCIAL MANAGEMENT 10TH EDITION
Chapter 1 Globalization and the Multinational Firm
1) What major dimension sets apart international finance from domestic finance?
A) Foreign exchange and political risks
B) Market imperfections
C) Expanded opportunity set
D) all of the options
ANS >> D
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
2) An example of a political risk is
A) expropriation of assets.
B) adverse change in tax rules.
C) the opposition party being elected.
D) both the expropriation of assets and adverse changes in tax rules are correct.
ANS >> D
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
3) Production of goods and services has become globalized to a large extent as a result of
A) natural resources being depleted in one country after another.
B) skilled labor being highly mobile.
C) multinational corporations' efforts to source inputs and locate production anywhere where costs are lower and
profits higher.
D) common tastes worldwide for the same goods and services.
ANS >> C
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
4) Recently, financial markets have become highly integrated. This development
A) allows investors to diversify their portfolios internationally.
B) allows minority investors to buy and sell stocks.
C) has increased the cost of capital for firms.
3
, INTERNATIONAL FINANCIAL MANAGEMENT 10TH EDITION
D) none of the options
ANS >> A
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
5) Japan has experienced large trade surpluses. Japanese investors have responded to this by
A) liquidating their positions in stocks to buy dollar-denominated bonds.
B) investing heavily in U.S. and other foreign financial markets.
C) lobbying the U.S. government to depreciate its currency.
D) lobbying the Japanese government to allow the yen to appreciate.
ANS >> B
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
6) Suppose your firm invests $100,000 in a project in Italy. At the time the exchange rate is
$1.25 = €1.00. One year later the exchange rate is the same, but the Italian government has expropriated your firm's
assets paying only €80,000 in compensation. This is an example of
A) exchange rate risk.
B) political risk.
C) market imperfections.
D) none of the options, since $100,000 = €80,000 × $1.25/€1.00.
ANS >> B
Topic: What's Special about "International" Finance?
7) Suppose you start with $100 and buy stock for £50 when the exchange rate is £1 = $2. One year later, the stock
rises to £60. You are happy with your 20 percent return on the stock, but when you sell the stock and exchange your
£60 for dollars, you only get $45 since the pound has fallen to £1 = $0.75. This loss of value is an example of
A) exchange rate risk.
B) political risk.
C) market imperfections.
D) weakness in the dollar.
ANS >> A
Topic: What's Special about "International" Finance?
4
TEST BANK FOR INTERNATIONAL FINANCIAL MANAGEMENT 10TH EDITION BY CHEOL EUN, BRUCE
G. RESNICK & TUUGI CHULUUN COMPLETE CHAPTERS 1-16| A+ ANSWERS WITH ACTUAL QUESTIONS.
1
,INTERNATIONAL FINANCIAL MANAGEMENT 10TH EDITION
TABLE OF CONTENT
PART ONE: Foundations of International Financial Management
1. Globalization and the Multinational Firm
2. International Monetary System
3. Balance of Payments
4. Corporate Governance Around the World
**PART TWO: The Foreign Exchange Market, Exchange Rate Determination,
and Currency Derivatives**
5. The Market for Foreign Exchange
6. International Parity Relationships and Forecasting Foreign Exchange Rates
7. Futures and Options on Foreign Exchange
PART THREE: Foreign Exchange Exposure and Management
8. Management of Transaction Exposure
9. Management of Economic Exposure
10. Management of Translation Exposure
PART FOUR: World Financial Markets and Institutions
11. International Banking and Money Market
12. International Bond Market
13. International Equity Markets
14. Interest Rate and Currency Swaps
15. International Portfolio Investment
PART FIVE: Financial Management of the Multinational Firm
16. Foreign Direct Investment and Cross-Border Acquisitions
17. International Capital Structure and the Cost of Capital
18. International Capital Budgeting
19. Multinational Cash Management
20. International Trade Finance
21. International Tax Environment and Transfer Pricing
2
,INTERNATIONAL FINANCIAL MANAGEMENT 10TH EDITION
Chapter 1 Globalization and the Multinational Firm
1) What major dimension sets apart international finance from domestic finance?
A) Foreign exchange and political risks
B) Market imperfections
C) Expanded opportunity set
D) all of the options
ANS >> D
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
2) An example of a political risk is
A) expropriation of assets.
B) adverse change in tax rules.
C) the opposition party being elected.
D) both the expropriation of assets and adverse changes in tax rules are correct.
ANS >> D
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
3) Production of goods and services has become globalized to a large extent as a result of
A) natural resources being depleted in one country after another.
B) skilled labor being highly mobile.
C) multinational corporations' efforts to source inputs and locate production anywhere where costs are lower and
profits higher.
D) common tastes worldwide for the same goods and services.
ANS >> C
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
4) Recently, financial markets have become highly integrated. This development
A) allows investors to diversify their portfolios internationally.
B) allows minority investors to buy and sell stocks.
C) has increased the cost of capital for firms.
3
, INTERNATIONAL FINANCIAL MANAGEMENT 10TH EDITION
D) none of the options
ANS >> A
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
5) Japan has experienced large trade surpluses. Japanese investors have responded to this by
A) liquidating their positions in stocks to buy dollar-denominated bonds.
B) investing heavily in U.S. and other foreign financial markets.
C) lobbying the U.S. government to depreciate its currency.
D) lobbying the Japanese government to allow the yen to appreciate.
ANS >> B
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
6) Suppose your firm invests $100,000 in a project in Italy. At the time the exchange rate is
$1.25 = €1.00. One year later the exchange rate is the same, but the Italian government has expropriated your firm's
assets paying only €80,000 in compensation. This is an example of
A) exchange rate risk.
B) political risk.
C) market imperfections.
D) none of the options, since $100,000 = €80,000 × $1.25/€1.00.
ANS >> B
Topic: What's Special about "International" Finance?
7) Suppose you start with $100 and buy stock for £50 when the exchange rate is £1 = $2. One year later, the stock
rises to £60. You are happy with your 20 percent return on the stock, but when you sell the stock and exchange your
£60 for dollars, you only get $45 since the pound has fallen to £1 = $0.75. This loss of value is an example of
A) exchange rate risk.
B) political risk.
C) market imperfections.
D) weakness in the dollar.
ANS >> A
Topic: What's Special about "International" Finance?
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