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