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,https://browsegrades.net/singlePaper/416756/testbank-and-solution-manua-for-multinational-b
Multinational Business Finance, 16e (Eiteman/Stonehill/Moffett)
zx zx zx zx
Chapter 1 Multinational Financial Management: Opportunities and Challenges
zx zx zx zx zx zx
1.1 The Global Financial Marketplace
zx zx zx
1) Financial globalization has NOT resulted in:
zx zx zx zx zx
A) continuing imbalances of balance of payments. zx zx zx zx zx
B) an increase in quantity and speed in the flow of capital across the world.
zx zx zx zx zx zx zx zx zx zx zx zx zx
C) capital markets less open and a decrease in the availability of capital for many organizations.
zx zx zx zx zx zx zx zx zx zx zx zx zx zx
D) uniform ways of ownership, control, and governance across the world
zx zx zx zx zx zx zx zx zx
. Answer: D
zx z x
Diff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge
zx zx zx zx
2) Financial globalization has NOT resulted in:
zx zx zx zx zx
A) continuing imbalances of balance of payments. zx zx zx zx zx
B) an increase in quantity and speed in the flow of capital across the world.
zx zx zx zx zx zx zx zx zx zx zx zx zx
C) capital markets more open and an increase in the availability of capital for man
zx zx zx zx zx zx zx zx zx zx zx zx zx
y organizations.
zx
D) an increase in the flow of capital into and out of industrialized market
zx zx zx zx zx zx zx zx zx zx zx zx
s. Answer: C
zx z x
Diff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge
zx zx zx zx
3) The institutions of global finance are:
zx zx zx zx zx
A) central banks. zx
B) commercial banks. zx
C) investment banks. zx
D) All of the above are institutions of global finance
zx zx zx zx zx zx zx zx
. Answer: D
zx z x
Diff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge
zx zx zx zx
1
Copyright © 2023 Pearson Education, Inc
zx zx zx zx zx
.
,https://browsegrades.net/singlePaper/416756/testbank-and-solution-manua-for-multinational-b
4) A major cost avoided in the eurocurrency markets is the payment of deposit insurance fee
zx zx zx zx zx zx zx zx zx zx zx zx zx zx
s, such as:
zx zx
A) Federal Deposit Insurance Corporation — FDIC.
zx zx zx zx zx
B) Office of the Comptroller of the Currency — OCC.
zx zx zx zx zx zx zx zx
C) International Monetary Fund — IMF. zx zx zx zx
D) World Bank — zx zx
WB. Answer: A
zx zx z x
Diff: 2 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge zx zx zx zx
5) The modern eurocurrency market was born shortly after:
zx zx zx zx zx zx zx
A) World War II. zx zx
B) World War I. zx zx
C) Korean War. zx
D) Bosnian War. zx
zxAnswer: A D z x z x
iff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge zx zx zx zx
6) The reference rate of interest in the eurocurrency market is the:
zx zx zx zx zx zx zx zx zx zx
A) London Interbank Offered Rate. zx zx zx
B) Prima rate. zx
C) Federal funds rate. zx zx
D) Treasury rate. zx
zxAnswer: A D z x z x
iff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge zx zx zx zx
7) Interest spreads in the eurocurrency market are small for many reasons EXCEPT:
zx zx zx zx zx zx zx zx zx zx zx
A) Eurocurrency loans are secured loans. zx zx zx zx
B) Eurocurrency deposits and loans are made in amounts of $500,000 or more on an unsecure
zx zx zx zx zx zx zx zx zx zx zx zx zx zx
d basis.
zx
C) The eurocurrency is a wholesale market.
zx zx zx zx zx
D) Borrowers are usually large corporations or government entities
zx zx zx zx zx zx zx
. Answer: A
zx z x
Diff: 2 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge zx zx zx zx
2
Copyright © 2023 Pearson Education, Inc
zx zx zx zx zx
.
, https://browsegrades.net/singlePaper/416756/testbank-and-solution-manua-for-multinational-b
8) Multinational enterprises (MNEs) are firms, both for-profit companies and not-for-
zx zx zx zx zx zx zx zx zx
profit organizations, that have operations in more than one country, and conduct their business
zx zx zx zx zx zx zx zx zx zx zx zx zx zx
through foreign subsidiaries, branches, or joint ventures with host country firms.
zx zx zx zx zx zx zx zx zx zx
Answer: TRUE z x zx
Diff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge zx zx zx zx
9) Ownership, control, and governance changes radically across the world. The publicly trade
zx zx zx zx zx zx zx zx zx zx zx
d company is not the dominant global business organization—the privately held or family-
zx zx zx zx zx zx zx zx zx zx zx zx
owned business is the prevalent structure—
zx zx zx zx zx
and their goals and measures of performance differ dramatically.
zx zx zx zx zx zx zx zx
Answer: TRUE z x zx
Diff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge zx zx zx zx
10) The securities at the heart of the global capital markets are the Mortgage Backed Securiti
zx zx zx zx zx zx zx zx zx zx zx zx zx zx
es (MBS). The health and security of the global financial system rely on the quality of these
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx z
xsecurities.
Answer: FALSE z x zx
Diff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge zx zx zx zx
11) The U.S. dollar has been the focal point of currency trading since the 1940s. As a resu
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
lt, most of the world's currencies are quoted against the dollar.
zx zx zx zx zx zx zx zx zx zx
Answer: TRUE z x zx
Diff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge zx zx zx zx
12) Several of the world's major currency exchange rates follow a specific quotation conventi
zx zx zx zx zx zx zx zx zx zx zx zx
on that is the result of tradition and history. The exchange rate between the U.S. dollar and the
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
zxeuro is always quoted as "dollars per euro."
zx zx zx zx zx zx zx
Answer: TRUE z x zx
Diff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge zx zx zx zx
3
Copyright © 2023 Pearson Education, Inc
zx zx zx zx zx
.
,https://browsegrades.net/singlePaper/416756/testbank-and-solution-manua-for-multinational-b
Multinational Business Finance, 16e (Eiteman/Stonehill/Moffett)
zx zx zx zx
Chapter 1 Multinational Financial Management: Opportunities and Challenges
zx zx zx zx zx zx
1.1 The Global Financial Marketplace
zx zx zx
1) Financial globalization has NOT resulted in:
zx zx zx zx zx
A) continuing imbalances of balance of payments. zx zx zx zx zx
B) an increase in quantity and speed in the flow of capital across the world.
zx zx zx zx zx zx zx zx zx zx zx zx zx
C) capital markets less open and a decrease in the availability of capital for many organizations.
zx zx zx zx zx zx zx zx zx zx zx zx zx zx
D) uniform ways of ownership, control, and governance across the world
zx zx zx zx zx zx zx zx zx
. Answer: D
zx z x
Diff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge
zx zx zx zx
2) Financial globalization has NOT resulted in:
zx zx zx zx zx
A) continuing imbalances of balance of payments. zx zx zx zx zx
B) an increase in quantity and speed in the flow of capital across the world.
zx zx zx zx zx zx zx zx zx zx zx zx zx
C) capital markets more open and an increase in the availability of capital for man
zx zx zx zx zx zx zx zx zx zx zx zx zx
y organizations.
zx
D) an increase in the flow of capital into and out of industrialized market
zx zx zx zx zx zx zx zx zx zx zx zx
s. Answer: C
zx z x
Diff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge
zx zx zx zx
3) The institutions of global finance are:
zx zx zx zx zx
A) central banks. zx
B) commercial banks. zx
C) investment banks. zx
D) All of the above are institutions of global finance
zx zx zx zx zx zx zx zx
. Answer: D
zx z x
Diff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge
zx zx zx zx
1
Copyright © 2023 Pearson Education, Inc
zx zx zx zx zx
.
,https://browsegrades.net/singlePaper/416756/testbank-and-solution-manua-for-multinational-b
4) A major cost avoided in the eurocurrency markets is the payment of deposit insurance fee
zx zx zx zx zx zx zx zx zx zx zx zx zx zx
s, such as:
zx zx
A) Federal Deposit Insurance Corporation — FDIC.
zx zx zx zx zx
B) Office of the Comptroller of the Currency — OCC.
zx zx zx zx zx zx zx zx
C) International Monetary Fund — IMF. zx zx zx zx
D) World Bank — zx zx
WB. Answer: A
zx zx z x
Diff: 2 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge zx zx zx zx
5) The modern eurocurrency market was born shortly after:
zx zx zx zx zx zx zx
A) World War II. zx zx
B) World War I. zx zx
C) Korean War. zx
D) Bosnian War. zx
zxAnswer: A D z x z x
iff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge zx zx zx zx
6) The reference rate of interest in the eurocurrency market is the:
zx zx zx zx zx zx zx zx zx zx
A) London Interbank Offered Rate. zx zx zx
B) Prima rate. zx
C) Federal funds rate. zx zx
D) Treasury rate. zx
zxAnswer: A D z x z x
iff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge zx zx zx zx
7) Interest spreads in the eurocurrency market are small for many reasons EXCEPT:
zx zx zx zx zx zx zx zx zx zx zx
A) Eurocurrency loans are secured loans. zx zx zx zx
B) Eurocurrency deposits and loans are made in amounts of $500,000 or more on an unsecure
zx zx zx zx zx zx zx zx zx zx zx zx zx zx
d basis.
zx
C) The eurocurrency is a wholesale market.
zx zx zx zx zx
D) Borrowers are usually large corporations or government entities
zx zx zx zx zx zx zx
. Answer: A
zx z x
Diff: 2 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge zx zx zx zx
2
Copyright © 2023 Pearson Education, Inc
zx zx zx zx zx
.
, https://browsegrades.net/singlePaper/416756/testbank-and-solution-manua-for-multinational-b
8) Multinational enterprises (MNEs) are firms, both for-profit companies and not-for-
zx zx zx zx zx zx zx zx zx
profit organizations, that have operations in more than one country, and conduct their business
zx zx zx zx zx zx zx zx zx zx zx zx zx zx
through foreign subsidiaries, branches, or joint ventures with host country firms.
zx zx zx zx zx zx zx zx zx zx
Answer: TRUE z x zx
Diff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge zx zx zx zx
9) Ownership, control, and governance changes radically across the world. The publicly trade
zx zx zx zx zx zx zx zx zx zx zx
d company is not the dominant global business organization—the privately held or family-
zx zx zx zx zx zx zx zx zx zx zx zx
owned business is the prevalent structure—
zx zx zx zx zx
and their goals and measures of performance differ dramatically.
zx zx zx zx zx zx zx zx
Answer: TRUE z x zx
Diff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge zx zx zx zx
10) The securities at the heart of the global capital markets are the Mortgage Backed Securiti
zx zx zx zx zx zx zx zx zx zx zx zx zx zx
es (MBS). The health and security of the global financial system rely on the quality of these
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx z
xsecurities.
Answer: FALSE z x zx
Diff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge zx zx zx zx
11) The U.S. dollar has been the focal point of currency trading since the 1940s. As a resu
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
lt, most of the world's currencies are quoted against the dollar.
zx zx zx zx zx zx zx zx zx zx
Answer: TRUE z x zx
Diff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge zx zx zx zx
12) Several of the world's major currency exchange rates follow a specific quotation conventi
zx zx zx zx zx zx zx zx zx zx zx zx
on that is the result of tradition and history. The exchange rate between the U.S. dollar and the
zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx zx
zxeuro is always quoted as "dollars per euro."
zx zx zx zx zx zx zx
Answer: TRUE z x zx
Diff: 1 zx
L.O.: 1.1 The Global Financial Marketplace Sk
z x zx zx zx zx zx
ill: Recognition
z x
AACSB: Application of knowledge zx zx zx zx
3
Copyright © 2023 Pearson Education, Inc
zx zx zx zx zx
.
