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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,Multinational Business Finance, 16e (Eiteman/Stonehill/Moffett)
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Chapter 1 Multinational Financial Management: Opportunities and Challenges
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1.1 The Global Financial Marketplace
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1) Financial globalization has NOT resulted in:
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A) continuing imbalances of balance of payments.c2 c2 c2 c2 c2


B) an increase in quantity and speed in the flow of capital across the world.
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C) capital markets less open and a decrease in the availability of capital for many organizations.
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D) uniform ways of ownership, control, and governance across the worl
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d.Answer: D
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Diff: 1 c2


L.O.: 1.1 The Global Financial MarketplaceSkil
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l: Recognition
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AACSB: Application of knowledge
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2) Financial globalization has NOT resulted in:
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A) continuing imbalances of balance of payments.c2 c2 c2 c2 c2


B) an increase in quantity and speed in the flow of capital across the world.
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C) capital markets more open and an increase in the availability of capital for ma
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nyorganizations.
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D) an increase in the flow of capital into and out of industrialized marke
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ts.Answer: C
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Diff: 1 c2


L.O.: 1.1 The Global Financial MarketplaceSkil
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l: Recognition
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AACSB: Application of knowledge
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3) The institutions of global finance are:
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A) central banks. c2


B) commercial banks. c2


C) investment banks. c2


D) All of the above are institutions of global financ
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e.Answer: D
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Diff: 1 c2


L.O.: 1.1 The Global Financial MarketplaceSkil
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l: Recognition
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AACSB: Application of knowledge
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,4) A major cost avoided in the eurocurrency markets is the payment of deposit insurance fe
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es,such as: 2c c2


A) Federal Deposit Insurance Corporation — FDIC.
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B) Office of the Comptroller of the Currency — OCC.
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C) International Monetary Fund — IMF. c2 c2 c2 c2


D) World Bank — c2 c2


WB.Answer: A
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Diff: 2 c2


L.O.: 1.1 The Global Financial MarketplaceSkil
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l: Recognition
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AACSB: Application of knowledge c 2 c2 c2




5) The modern eurocurrency market was born shortly after:
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A) World War II. c2 c2


B) World War I. c2 c2


C) Korean War. c2


D) Bosnian War. c2 2c


Answer: A Dif c2c2c 2 c2


f: 1 c2


L.O.: 1.1 The Global Financial MarketplaceSkil
c2 c2 c2 c2 c2 2c


l: Recognition
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AACSB: Application of knowledge c 2 c2 c2




6) The reference rate of interest in the eurocurrency market is the:
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A) London Interbank Offered Rate. c2 c2 c2


B) Prima rate. c2


C) Federal funds rate. c2 c2


D) Treasury rate c2


.Answer: A Di
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ff: 1 c2


L.O.: 1.1 The Global Financial MarketplaceSkil
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l: Recognition
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AACSB: Application of knowledge c 2 c2 c2




7) Interest spreads in the eurocurrency market are small for many reasons EXCEPT:
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A) Eurocurrency loans are secured loans. c2 c2 c2 c2


B) Eurocurrency deposits and loans are made in amounts of $500,000 or more on an unsecur
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edbasis. 2c


C) The eurocurrency is a wholesale market.
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D) Borrowers are usually large corporations or government entitie
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s.Answer: A
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Diff: 2 c2


L.O.: 1.1 The Global Financial MarketplaceSkil
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l: Recognition
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AACSB: Application of knowledge c 2 c2 c2




2
Copyright © 2023 Pearson Education, In
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, 8) Multinational enterprises (MNEs) are firms, both for-profit companies and not-for-
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profit organizations, that have operations in more than one country, and conduct their business
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throughforeign subsidiaries, branches, or joint ventures with host country firms.
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Answer: TRUEDif c2 2c


f: 1 c2


L.O.: 1.1 The Global Financial MarketplaceSkil
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l: Recognition
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AACSB: Application of knowledge c 2 c2 c2




9) Ownership, control, and governance changes radically across the world. The publicly trade
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dcompany is not the dominant global business organization—the privately held or family-
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ownedbusiness is the prevalent structure—
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and their goals and measures of performance differ dramatically.
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Answer: TRUEDif c2 2c


f: 1 c2


L.O.: 1.1 The Global Financial MarketplaceSkil
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l: Recognition
c2


AACSB: Application of knowledge c 2 c2 c2




10) The securities at the heart of the global capital markets are the Mortgage Backed Securiti
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es(MBS). The health and security of the global financial system rely on the quality of these
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securities.
Answer: FALSEDi c2 2c


ff: 1 c2


L.O.: 1.1 The Global Financial MarketplaceSkil
c2 c2 c2 c2 c2 2c


l: Recognition
c2


AACSB: Application of knowledge c 2 c2 c2




11) The U.S. dollar has been the focal point of currency trading since the 1940s. As a res
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ult,most of the world's currencies are quoted against the dollar.
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Answer: TRUEDif c2 2c


f: 1 c2


L.O.: 1.1 The Global Financial MarketplaceSkil
c2 c2 c2 c2 c2 2c


l: Recognition
c2


AACSB: Application of knowledge c 2 c2 c2




12) Several of the world's major currency exchange rates follow a specific quotation conventi
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onthat is the result of tradition and history. The exchange rate between the U.S. dollar and the
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eurois always quoted as "dollars per euro."
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Answer: TRUEDif c2 2c


f: 1 c2


L.O.: 1.1 The Global Financial MarketplaceSkil
c2 c2 c2 c2 c2 2c


l: Recognition
c2


AACSB: Application of knowledge c 2 c2 c2




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