TEST BANK FOR Multinational Business Finance 16TH EDITION |ISBN- | COMPLETE GUIDE | 100% VERIFIED | A+ GRADE

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MultinationalrBusinessrFinance,r16er(Eiteman/Stonehill/Moffett)
Chapterr1 MultinationalrFinancialrManagement:rOpportunitiesrandrChallenges

1.1 TherGlobalrFinancialrMarketplace

1) FinancialrglobalizationrhasrNOTrresultedrin:
A) continuingrimbalancesrofrbalancerofrpayments.
B) anrincreaserinrquantityrandrspeedrinrtherflowrofrcapitalracrossrtherworld.
C) capitalrmarketsrlessropenrandrardecreaserinrtheravailabilityrofrcapitalrforrmanyrorganizations.
D) uniformrwaysrofrownership,rcontrol,randrgovernanceracrossrtherworld.rA
nswer:r D
Diff:r1
L.O.:r1.1rTherGlobalrFinancialrMarketplacerSkill:r
Recognition
AACSB:r Applicationrofrknowledge

2) FinancialrglobalizationrhasrNOTrresultedrin:
A) continuingrimbalancesrofrbalancerofrpayments.
B) anrincreaserinrquantityrandrspeedrinrtherflowrofrcapitalracrossrtherworld.
C) capitalrmarketsrmoreropenrandranrincreaserinrtheravailabilityrofrcapitalrforrmanyrorg
anizations.
D) anrincreaserinrtherflowrofrcapitalrintorandroutrofrindustrializedrmarkets.rAn
swer:r C
Diff:r1
L.O.:r1.1rTherGlobalrFinancialrMarketplacerSkill:r
Recognition
AACSB:r Applicationrofrknowledge

3) Therinstitutionsrofrglobalrfinancerare:
A) centralrbanks.
B) commercialrbanks.
C) investmentrbanks.
D) Allrofrtheraboverarerinstitutionsrofrglobalrfinance.rA
nswer:r D
Diff:r1
L.O.:r1.1rTherGlobalrFinancialrMarketplacerSkill:r
Recognition
AACSB:r Applicationrofrknowledge




1
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4) Armajorrcostravoidedrinrthereurocurrencyrmarketsrisrtherpaymentrofrdepositrinsurancerfees,rsuc
hras:
A) FederalrDepositrInsurancerCorporationr—rFDIC.
B) OfficerofrtherComptrollerrofrtherCurrencyr—rOCC.
C) InternationalrMonetaryrFundr—rIMF.
D) WorldrBankr—
rWB.rAnswer:r A

Diff:r2
L.O.:r1.1rTherGlobalrFinancialrMarketplacerSkill:r
Recognition
AACSB:r Applicationrofrknowledge

5) Thermodernreurocurrencyrmarketrwasrbornrshortlyrafter:
A) WorldrWarrII.
B) WorldrWarrI.
C) KoreanrWar.
D) BosnianrWar.r
Answer:rrr ArDiff:r
1
L.O.:r1.1rTherGlobalrFinancialrMarketplacerSkill:r
Recognition
AACSB:r Applicationrofrknowledge

6) Therreferencerraterofrinterestrinrthereurocurrencyrmarketrisrthe:
A) LondonrInterbankrOfferedrRate.
B) Primarrate.
C) Federalrfundsrrate.
D) Treasuryrrate.r
Answer:rrr ArDiff:r
1
L.O.:r1.1rTherGlobalrFinancialrMarketplacerSkill:r
Recognition
AACSB:r Applicationrofrknowledge

7) InterestrspreadsrinrthereurocurrencyrmarketrarersmallrforrmanyrreasonsrEXCEPT:
A) Eurocurrencyrloansrarersecuredrloans.
B) Eurocurrencyrdepositsrandrloansrarermaderinramountsrofr$500,000rorrmoreronranrunsecuredrbas
is.
C) Thereurocurrencyrisrarwholesalermarket.
D) Borrowersrarerusuallyrlargercorporationsrorrgovernmentrentities.rA
nswer:r A
Diff:r2
L.O.:r1.1rTherGlobalrFinancialrMarketplacerSkill:r
Recognition
AACSB:r Applicationrofrknowledge



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8) Multinationalrenterprisesr(MNEs)rarerfirms,rbothrfor-profitrcompaniesrandrnot-for-
profitrorganizations,rthatrhaveroperationsrinrmorerthanronercountry,randrconductrtheirrbusinessrthrou
ghrforeignrsubsidiaries,rbranches,rorrjointrventuresrwithrhostrcountryrfirms.
Answer:rTRUErDiff
: r1
L.O.:r1.1rTherGlobalrFinancialrMarketplacerSkill:r
Recognition
AACSB:r Applicationrofrknowledge

9) Ownership,rcontrol,randrgovernancerchangesrradicallyracrossrtherworld.rTherpubliclyrtradedrco
mpanyrisrnotrtherdominantrglobalrbusinessrorganization—therprivatelyrheldrorrfamily-
ownedrbusinessrisrtherprevalentrstructure—
andrtheirrgoalsrandrmeasuresrofrperformancerdifferrdramatically.
Answer:rTRUErDiff
: r1
L.O.:r1.1rTherGlobalrFinancialrMarketplacerSkill:r
Recognition
AACSB:r Applicationrofrknowledge

10) ThersecuritiesratrtherheartrofrtherglobalrcapitalrmarketsrarertherMortgagerBackedrSecuritiesr(M
BS).rTherhealthrandrsecurityrofrtherglobalrfinancialrsystemrrelyronrtherqualityrofrthesersecurities.
Answer:rFALSErDif
f:r1
L.O.:r1.1rTherGlobalrFinancialrMarketplacerSkill:r
Recognition
AACSB:r Applicationrofrknowledge

11) TherU.S.rdollarrhasrbeenrtherfocalrpointrofrcurrencyrtradingrsincerther1940s.rAsrarresult,rmos
trofrtherworld'srcurrenciesrarerquotedragainstrtherdollar.
Answer:rTRUErDiff
: r1
L.O.:r1.1rTherGlobalrFinancialrMarketplacerSkill:r
Recognition
AACSB:r Applicationrofrknowledge

12) Severalrofrtherworld'srmajorrcurrencyrexchangerratesrfollowrarspecificrquotationrconventionrtha
trisrtherresultrofrtraditionrandrhistory.rTherexchangerraterbetweenrtherU.S.rdollarrandrthereurorisralwa
ysrquotedrasr"dollarsrperreuro."
Answer:rTRUErDiff
: r1
L.O.:r1.1rTherGlobalrFinancialrMarketplacerSkill:r
Recognition
AACSB:r Applicationrofrknowledge




3
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