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, Chapter 1 Globalization and the Multinational Firm
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1) What major dimension sets apart international finance from domestic finance?
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A) Foreign exchange and political risks
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B) Market imperfections h1
C) Expanded opportunity set h1 h1
D) all of the
h1 h1
h 1 options
h1 Answer:
D
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
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2) An example of a political risk is
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A) expropriation of assets. h1 h1
B) adverse change in tax rules. h1 h1 h1 h1
C) the opposition party being elected.
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D) both the expropriation of assets and adverse changes in tax
h1 h1 h1 h1 h1 h1 h1 h1 h1
h1 rules h 1 are correct. h1 h 1 Answer: h 1 D
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
h1 h1 h1 h1 h1 h1 h1 h1
3) Production of goods and services has become globalized to a large extent as a result of
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A) natural resources being depleted in one country after another.
h1 h1 h1 h1 h1 h1 h1 h1
B) skilled labor being highly mobile.
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C) multinational corporations' efforts to source inputs and locate production anywhere where
h1 h1 h1 h1 h1 h1 h1 h1 h1 h1
costs are lower and profits higher.
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D) common tastes worldwide for the same goods
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h1 and h 1 services. h 1 Answer: h 1 C
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
h1 h1 h1 h1 h1 h1 h1 h1
4) Recently, financial markets have become highly integrated. This development
h1 h1 h1 h1 h1 h1 h1 h1
A) allows investors to diversify their portfolios internationally.
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2
,B) allows minority investors to buy and sell stocks.
h1 h1 h1 h1 h1 h1 h1
3
, C) has increased the cost of capital for firms.
h1 h1 h1 h1 h1 h1 h1
4
, Chapter 1 Globalization and the Multinational Firm
h1 h1 h1 h1 h1 h1
1) What major dimension sets apart international finance from domestic finance?
h1 h1 h1 h1 h1 h1 h1 h1 h1
A) Foreign exchange and political risks
h1 h1 h1 h1
B) Market imperfections h1
C) Expanded opportunity set h1 h1
D) all of the
h1 h1
h 1 options
h1 Answer:
D
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
h1 h1 h1 h1 h1 h1 h1 h1
2) An example of a political risk is
h1 h1 h1 h1 h1 h1
A) expropriation of assets. h1 h1
B) adverse change in tax rules. h1 h1 h1 h1
C) the opposition party being elected.
h1 h1 h1 h1
D) both the expropriation of assets and adverse changes in tax
h1 h1 h1 h1 h1 h1 h1 h1 h1
h1 rules h 1 are correct. h1 h 1 Answer: h 1 D
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
h1 h1 h1 h1 h1 h1 h1 h1
3) Production of goods and services has become globalized to a large extent as a result of
h1 h1 h1 h1 h1 h1 h1 h1 h1 h1 h1 h1 h1 h1 h1
A) natural resources being depleted in one country after another.
h1 h1 h1 h1 h1 h1 h1 h1
B) skilled labor being highly mobile.
h1 h1 h1 h1
C) multinational corporations' efforts to source inputs and locate production anywhere where
h1 h1 h1 h1 h1 h1 h1 h1 h1 h1
costs are lower and profits higher.
h1 h 1 h1 h1 h1 h 1
D) common tastes worldwide for the same goods
h1 h1 h1 h1 h1 h1
h1 and h 1 services. h 1 Answer: h 1 C
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
h1 h1 h1 h1 h1 h1 h1 h1
4) Recently, financial markets have become highly integrated. This development
h1 h1 h1 h1 h1 h1 h1 h1
A) allows investors to diversify their portfolios internationally.
h1 h1 h1 h1 h1 h1
2
,B) allows minority investors to buy and sell stocks.
h1 h1 h1 h1 h1 h1 h1
3
, C) has increased the cost of capital for firms.
h1 h1 h1 h1 h1 h1 h1
4
