Multinational Finance, 2026 – Study Material and
Practice Questions
Why do you need international financial management? - ANS✔✔ You may be competing with
an international business. Price of products being compared involve international financial
management.
What is a Multinational Corporation (MNC) - ANS✔✔ firms that engage in some form of
international business
What is the goal of the financial manager? - ANS✔✔ Conduct international financial
management involving investing and financing decisions intended to maximize the value of the
MNC
What is the theory of comparative advantage? - ANS✔✔ the ability to produce a good at a
lower opportunity cost than another product
According to theory of comparative advantage what goods should countries export? - ANS✔✔
Goods that a country is better at making, the good they have the comparative advantage
What is absolute advantage? - ANS✔✔ the ability to produce a good using fewer inputs than
outputs
What is the balance of payments? - ANS✔✔ statistical record of a country's international
transactions over a certain period of time in the form of double-entry bookkeeping
What accounts are included in the balance of payments? - ANS✔✔ current account, capital
account, financial account
Practice Questions
Why do you need international financial management? - ANS✔✔ You may be competing with
an international business. Price of products being compared involve international financial
management.
What is a Multinational Corporation (MNC) - ANS✔✔ firms that engage in some form of
international business
What is the goal of the financial manager? - ANS✔✔ Conduct international financial
management involving investing and financing decisions intended to maximize the value of the
MNC
What is the theory of comparative advantage? - ANS✔✔ the ability to produce a good at a
lower opportunity cost than another product
According to theory of comparative advantage what goods should countries export? - ANS✔✔
Goods that a country is better at making, the good they have the comparative advantage
What is absolute advantage? - ANS✔✔ the ability to produce a good using fewer inputs than
outputs
What is the balance of payments? - ANS✔✔ statistical record of a country's international
transactions over a certain period of time in the form of double-entry bookkeeping
What accounts are included in the balance of payments? - ANS✔✔ current account, capital
account, financial account