BESTLEC
Solution Manual
Multinational Business Finance 16th Edition, Kindle Edition
by David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett.
All Chapters Covered| Latest Edition
C
LE
ST
BE
1
, BESTLEC
Chapter 1: Multinational Financial Management: Opportunities and Challenges
1.1 The Global Financial Marketplace
1) Financial globalization has NOT resulted in:
A) continuing imbalances of balance of payments.
B) an increase in quantity and speed in the flow of capital across the world.
C) capital markets less open and a decrease in the availability of capital for many
organizations.
D) uniform ways of ownership, control, and governance across the world.
Answer: D
Diff: 1
C
L.O.: 1.1 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge LE
2) Financial globalization has NOT resulted in:
ST
A) continuing imbalances of balance of payments.
B) an increase in quantity and speed in the flow of capital across the world.
C) capital markets more open and an increase in the availability of capital for many
BE
organizations.
D) an increase in the flow of capital into and out of industrialized markets.
Answer: C
Diff: 1
L.O.: 1.1 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge
3) The institutions of global finance are:
A) central banks.
B) commercial banks.
C) investment banks.
D) All of the above are institutions of global finance.
2
, BESTLEC
Answer: D
Diff: 1
L.O.: 1.1 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge
4) A major cost avoided in the eurocurrency markets is the payment of deposit insurance
fees, such as:
A) Federal Deposit Insurance Corporation — FDIC.
B) Office of the Comptroller of the Currency — OCC.
C) International Monetary Fund — IMF.
C
D) World Bank — WB.
Answer: A LE
Diff: 2
L.O.: 1.1 The Global Financial Marketplace Skill: Recognition
ST
AACSB: Application of knowledge
5) The modern eurocurrency market was born shortly after:
BE
A) World War II.
B) World War I.
C) Korean War.
D) Bosnian War.
Answer: A Diff: 1
L.O.: 1.1 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge
6) The reference rate of interest in the eurocurrency market is the:
A) London Interbank Offered Rate.
3
, BESTLEC
B) Prima rate.
C) Federal funds rate.
D) Treasury rate.
Answer: A Diff: 1
L.O.: 1.1 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge
7) Interest spreads in the eurocurrency market are small for many reasons EXCEPT:
A) Eurocurrency loans are secured loans.
B) Eurocurrency deposits and loans are made in amounts of $500,000 or more on an
C
unsecured basis.
C) The eurocurrency is a wholesale market.
LE
D) Borrowers are usually large corporations or government entities.
Answer: A
ST
Diff: 2
L.O.: 1.1 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge
BE
8) Multinational enterprises (MNEs) are firms, both for-profit companies and not-for-profit
organizations, that have operations in more than one country, and conduct their business through
foreign subsidiaries, branches, or joint ventures with host country firms.
Answer: TRUE Diff: 1
L.O.: 1.1 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge
9) Ownership, control, and governance changes radically across the world. The publicly
traded company is not the dominant global business organization—the privately held or family-
owned business is the prevalent structure—and their goals and measures of performance differ
dramatically.
4
Solution Manual
Multinational Business Finance 16th Edition, Kindle Edition
by David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett.
All Chapters Covered| Latest Edition
C
LE
ST
BE
1
, BESTLEC
Chapter 1: Multinational Financial Management: Opportunities and Challenges
1.1 The Global Financial Marketplace
1) Financial globalization has NOT resulted in:
A) continuing imbalances of balance of payments.
B) an increase in quantity and speed in the flow of capital across the world.
C) capital markets less open and a decrease in the availability of capital for many
organizations.
D) uniform ways of ownership, control, and governance across the world.
Answer: D
Diff: 1
C
L.O.: 1.1 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge LE
2) Financial globalization has NOT resulted in:
ST
A) continuing imbalances of balance of payments.
B) an increase in quantity and speed in the flow of capital across the world.
C) capital markets more open and an increase in the availability of capital for many
BE
organizations.
D) an increase in the flow of capital into and out of industrialized markets.
Answer: C
Diff: 1
L.O.: 1.1 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge
3) The institutions of global finance are:
A) central banks.
B) commercial banks.
C) investment banks.
D) All of the above are institutions of global finance.
2
, BESTLEC
Answer: D
Diff: 1
L.O.: 1.1 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge
4) A major cost avoided in the eurocurrency markets is the payment of deposit insurance
fees, such as:
A) Federal Deposit Insurance Corporation — FDIC.
B) Office of the Comptroller of the Currency — OCC.
C) International Monetary Fund — IMF.
C
D) World Bank — WB.
Answer: A LE
Diff: 2
L.O.: 1.1 The Global Financial Marketplace Skill: Recognition
ST
AACSB: Application of knowledge
5) The modern eurocurrency market was born shortly after:
BE
A) World War II.
B) World War I.
C) Korean War.
D) Bosnian War.
Answer: A Diff: 1
L.O.: 1.1 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge
6) The reference rate of interest in the eurocurrency market is the:
A) London Interbank Offered Rate.
3
, BESTLEC
B) Prima rate.
C) Federal funds rate.
D) Treasury rate.
Answer: A Diff: 1
L.O.: 1.1 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge
7) Interest spreads in the eurocurrency market are small for many reasons EXCEPT:
A) Eurocurrency loans are secured loans.
B) Eurocurrency deposits and loans are made in amounts of $500,000 or more on an
C
unsecured basis.
C) The eurocurrency is a wholesale market.
LE
D) Borrowers are usually large corporations or government entities.
Answer: A
ST
Diff: 2
L.O.: 1.1 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge
BE
8) Multinational enterprises (MNEs) are firms, both for-profit companies and not-for-profit
organizations, that have operations in more than one country, and conduct their business through
foreign subsidiaries, branches, or joint ventures with host country firms.
Answer: TRUE Diff: 1
L.O.: 1.1 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge
9) Ownership, control, and governance changes radically across the world. The publicly
traded company is not the dominant global business organization—the privately held or family-
owned business is the prevalent structure—and their goals and measures of performance differ
dramatically.
4
