Test Bank for Multinational Business Finance 16th Edition By (Eiteman/Stonehill/Moffett), ISBN: 9780137496013, All 18 Chapters Covered, Verified Latest Edition

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,MultinationalvBusinessvFinance,v16ev(Eiteman/Stonehill/Moffett)
Chapterv1 MultinationalvFinancialvManagement:vOpportunitiesvandvChallenges

1.1 ThevGlobalvFinancialvMarketplace

1) FinancialvglobalizationvhasvNOTvresultedvin:
A) continuingvimbalancesvofvbalancevofvpayments.
B) anvincreasevinvquantityvandvspeedvinvthevflowvofvcapitalvacrossvthevworld.
C) capitalvmarketsvlessvopenvandvavdecreasevinvthevavailabilityvofvcapitalvforvmanyvorganizations.
D) uniformvwaysvofvownership,vcontrol,vandvgovernancevacrossvthevworld.v4
9 Answer:v49D
Diff:v149L.O.:v1.1vThevGlobalvFinancialvMarketpla
cevSkill:
v49Recognition

AACSB:v4 9 Applicationvofvknowledge

2) FinancialvglobalizationvhasvNOTvresultedvin:
A) continuingvimbalancesvofvbalancevofvpayments.
B) anvincreasevinvquantityvandvspeedvinvthevflowvofvcapitalvacrossvthevworld.
C) capitalvmarketsvmorevopenvandvanvincreasevinvthevavailabilityvofvcapitalvforvmanyvo4
9rganizations.
D) anvincreasevinvthevflowvofvcapitalvintovandvoutvofvindustrializedvmarkets.v4
9 Answer:v49C
Diff:v149L.O.:v1.1vThevGlobalvFinancialvMarketpla
cevSkill:
v49Recognition

AACSB:v4 9 Applicationvofvknowledge

3) Thevinstitutionsvofvglobalvfinancevare:
A) centralvbanks.
B) commercialvbanks.
C) investmentvbanks.
D) Allvofvthevabovevarevinstitutionsvofvglobalvfinance.v
4 9 Answer:v49D
Diff:v149L.O.:v1.1vThevGlobalvFinancialvMarketpla
cevSkill:
v49Recognition

AACSB:v4 9 Applicationvofvknowledge




1
Copyrightv©v2023vPearsonvEducation,vInc.

,4) Avmajorvcostvavoidedvinvtheveurocurrencyvmarketsvisvthevpaymentvofvdepositvinsurancevfees,vs4
9uchvas:
A) FederalvDepositvInsurancevCorporationv—vFDIC.
B) OfficevofvthevComptrollervofvthevCurrencyv—vOCC.
C) InternationalvMonetaryvFundv—vIMF.
D) WorldvBankv—
vWB.vAnswer:v49 A

Diff:v249L.O.:v1.1vThevGlobalvFinancialvMarketpla
cevSkill:
v49Recognition

AACSB:v4 9 Applicationvofvknowledge

5) Thevmodernveurocurrencyvmarketvwasvbornvshortlyvafter:
A) WorldvWarvII.
B) WorldvWarvI.
C) KoreanvWar.
D) BosnianvWar.v
4 9 Answer:vvvAvDi
ff
:v149L.O.:v1.1vThevGlobalvFinancialvMarketplacevS
kill:
v49Recognition

AACSB:v4 9 Applicationvofvknowledge

6) Thevreferencevratevofvinterestvinvtheveurocurrencyvmarketvisvthe:
A) LondonvInterbankvOfferedvRate.
B) Primavrate.
C) Federalvfundsvrate.
D) Treasuryvrate.v
4 9 Answer:vvv49Av
Diff
:v149L.O.:v1.1vThevGlobalvFinancialvMarketplacevS
kill:
v49Recognition

AACSB:v4 9 Applicationvofvknowledge

7) InterestvspreadsvinvtheveurocurrencyvmarketvarevsmallvforvmanyvreasonsvEXCEPT:
A) Eurocurrencyvloansvarevsecuredvloans.
B) Eurocurrencyvdepositsvandvloansvarevmadevinvamountsvofv$500,000vorvmorevonvanvunsecuredvb4
9asis.
C) Theveurocurrencyvisvavwholesalevmarket.
D) Borrowersvarevusuallyvlargevcorporationsvorvgovernmentventities.v4
9 Answer:v49A
Diff:v249L.O.:v1.1vThevGlobalvFinancialvMarketpla
cevSkill:
v49Recognition

AACSB:v4 9 Applicationvofvknowledge

2
Copyrightv©v2023vPearsonvEducation,vInc.

, 8) Multinationalventerprisesv(MNEs)varevfirms,vbothvfor-profitvcompaniesvandvnot-for-
49profitvorganizations,vthatvhavevoperationsvinvmorevthanvonevcountry,vandvconductvtheirvbusinessvthr
49oughvforeignvsubsidiaries,vbranches,vorvjointvventuresvwithvhostvcountryvfirms.4 9 4 9 Answer:vTRU
EvDiff
:v149L.O.:v1.1vThevGlobalvFinancialvMarketplacevS
kill:
v49Recognition

AACSB:v4 9 Applicationvofvknowledge

9) Ownership,vcontrol,vandvgovernancevchangesvradicallyvacrossvthevworld.vThevpubliclyvtradedvc4
9ompanyvisvnotvthevdominantvglobalvbusinessvorganization—thevprivatelyvheldvorvfamily-
49ownedvbusinessvisvthevprevalentvstructure—
49andvtheirvgoalsvandvmeasuresvofvperformancevdiffervdramatically.
Answer:vTRUEvDiff
:v149L.O.:v1.1vThevGlobalvFinancialvMarketplacevS
kill:
v49Recognition

AACSB:v4 9 Applicationvofvknowledge

10) ThevsecuritiesvatvthevheartvofvthevglobalvcapitalvmarketsvarevthevMortgagevBackedvSecuritiesv(49
MBS).vThevhealthvandvsecurityvofvthevglobalvfinancialvsystemvrelyvonvthevqualityvofvthesevsecuriti49
es.
Answer:vFALSEvDi
49ff:v1
L.O.:v1.1vThevGlobalvFinancialvMarketplacevSkill:
v49Recognition

AACSB:v4 9 Applicationvofvknowledge

11) ThevU.S.vdollarvhasvbeenvthevfocalvpointvofvcurrencyvtradingvsincevthev1940s.vAsvavresult,v4
9 mostvofvthevworld'svcurrenciesvarevquotedvagainstvthevdollar.
Answer:vTRUEvDiff
:v149L.O.:v1.1vThevGlobalvFinancialvMarketplacevS
kill:
v49Recognition

AACSB:v4 9 Applicationvofvknowledge

12) Severalvofvthevworld'svmajorvcurrencyvexchangevratesvfollowvavspecificvquotationvconventionvt49
hatvisvthevresultvofvtraditionvandvhistory.vThevexchangevratevbetweenvthevU.S.vdollarvandvtheveurovisv4
9 alwaysvquotedvasv"dollarsvperveuro."
Answer:vTRUEvDiff
:v149L.O.:v1.1vThevGlobalvFinancialvMarketplacevS
kill:
v49Recognition

AACSB:v4 9 Applicationvofvknowledge




3
Copyrightv©v2023vPearsonvEducation,vInc.