Test Bank for International Financial Management 9th Edition By Cheol Eun, Bruce Resnick All Chapters fully covered and updated

Test
ial ebaTestebank
emanagement efor
e9th einternational
eedition efinancial
ebyecheol emanagement
eeunebruce eresnick e9theeditionebyecheoleeunebruceeresnicknkeforeinternational efinanc




Test bank for
international financial management 9th edition
by cheol eun bruce resnick




International Financial Management 9th Edition
e e e e

,Test
ial ebaTestebank
emanagement efor
e9th einternational
eedition efinancial
ebyecheol emanagement
eeunebruce eresnick e9theeditionebyecheoleeunebruceeresnicknkeforeinternational efinanc




MULTIPLEeCHOICEe-
eChooseetheeoneealternativeethatebestecompletesetheestatementeoreanswersetheequestion.
1) Whatemajoredimensionesetseaparteinternationalefinanceefromedomesticefinance?


A) Foreigneexchangeeandepoliticalerisks
B) Marketeimperfections
C) Expandedeopportunityeset
D) alleofetheeoptions




2) Aneexample(s)eofeaepoliticaleriskeis


A) expropriationeofeassets.
B) adverseechangeeinetaxerules.
C) theeoppositionepartyebeingeelected.
D) bothetheeexpropriationeofeassetseandeadverseechangeseinetaxeruleseareecorrect.




3) Productioneofegoodseandeservicesehasebecomeeglobalizedetoeaelargeeextenteaseaeresulteof


A) naturaleresourcesebeingedepletedeineoneecountryeaftereanother.
B) skilledelaborebeingehighlyemobile.
C) multinationalecorporations'eeffortsetoesourceeinputseandelocateeproductioneanyw
hereewhereecostseareelowereandeprofitsehigher.
D) commonetasteseworldwideeforetheesameegoodseandeservices.




4) Recently,efinancialemarketsehaveebecomeehighlyeintegrated.eThisedevelopment


International Financial Management 9th Edition
e e e e

,Test
ial ebaTestebank
emanagement efor
e9th einternational
eedition efinancial
ebyecheol emanagement
eeunebruce eresnick e9theeditionebyecheoleeunebruceeresnicknkeforeinternational efinanc




A) allowseinvestorsetoediversifyetheireportfolioseinternationally.
B) allowseminorityeinvestorsetoebuyeandesellestocks.
C) haseincreasedetheecosteofecapitaleforefirms.
D) noneeofetheeoptions




5) Japanehaseexperiencedelargeetradeesurpluses.eJapaneseeinvestorsehaveerespondedetoethiseb
y


A) liquidatingetheirepositionseinestocksetoebuyedollar-denominatedebonds.
B) investingeheavilyeineU.S.eandeothereforeignefinancialemarkets.
C) lobbyingetheeU.S.egovernmentetoedepreciateeitsecurrency.
D) lobbyingetheeJapaneseegovernmentetoeallowetheeyenetoeappreciate.




6) Supposeeyourefirmeinvestse$100,000eineaeprojecteineItaly.eAtetheetimeetheeexchangeerateeis
$1.25e=e€1.00.eOneeyearelateretheeexchangeerateeisetheesame,ebutetheeItalianegovernmenteh
aseexpropriatedeyourefirm'seassetsepayingeonlye€80,000einecompensation.eThiseiseaneexam
pleeof


A) exchangeerateerisk.
B) politicalerisk.
C) marketeimperfections.
D)enoneeofetheeoptions,esincee$100,000e=e€80,000e×e$1.25/€1.00.




International Financial Management 9th Edition
e e e e

, Test
ial ebaTestebank
emanagement efor
e9th einternational
eedition efinancial
ebyecheol emanagement
eeunebruce eresnick e9theeditionebyecheoleeunebruceeresnicknkeforeinternational efinanc




7) Supposeeyouestartewithe$100eandebuyestockefore£50ewhenetheeexchangeerateeise£1e=e$2.e
Oneeyearelater,etheestockerisesetoe£60.eYoueareehappyewitheyoure20epercentereturneonetheestock,e
butewheneyoueselletheestockeandeexchangeeyoure£60eforedollars,eyoueonlyegete$45esinceetheepou
ndehasefallenetoe£1e=e$0.75.eThiselosseofevalueeiseaneexampleeof


A) exchangeerateerisk.
B) politicalerisk.
C) marketeimperfections.
D) weaknesseinetheedollar.




8) SupposeethateGreateBritaineiseaemajoreexportemarketeforeyourefirm,eaeU.S.-
basedeMNC.eIfetheeBritishepoundedepreciateseagainstetheeU.S.edollar,


A) yourefirmewillebeeableetoechargeemoreeinedollaretermsewhileekeepingepoundeprices
stable
.
B) yourefirmemayebeepricedeouteofetheeU.K.emarket,etoetheeextentethateyouredollarecosts
stayeconstanteandeyourepoundepricesewillerise.
C) toeprotecteU.K.emarketeshare,eyourefirmemayehaveetoecutetheedollarepriceeofeyouregoo
dsetoekeepetheepoundepriceetheesame.
D) yourefirmemayebeepricedeouteofetheeU.K.emarket,etoetheeextentethateyouredollarecos
tsestayeconstanteandeyourepoundepricesewillerise,eandetoeprotecteU.K.emarketeshare,eyourefir
memayehaveetoecutetheedollarepriceeofeyouregoodsetoekeepetheepoundepriceetheesame.




9) SupposeeMexicoeiseaemajoreexportemarketeforeyoureU.S.-
basedecompanyeandetheeMexicanepesoeappreciatesedrasticallyeagainstetheeU.S.edollar.eThiseme
ans



International Financial Management 9th Edition
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