Test Bank – International Financial Management, 14th Edition – Jeff Madura – ISBN 9780357130544 (Full Chapters Covered, Chapters 1–21)

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International Financial
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Management 14th Edition
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TEST BANK
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Jeff Madura
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Comprehensive Solutions Manual for Instructors
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and Students

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9780357130544
© Jeff Madura. All rights reserved. Reproduction
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or distribution without permission is prohibited.
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© MEDGEEK

, TABLE OF CONTENTS
Test Bank – International Financial Management (14th Edition)
Author: Jeff Madura
ISBN: 9780357130544
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PART I: THE INTERNATIONAL FINANCIAL ENVIRONMENT

Chapter 1: Multinational Financial Management: An Overview
Chapter 2: International Flow of Funds
Chapter 3: International Financial Markets
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Chapter 4: Exchange Rate Determination
Chapter 5: Currency Derivatives
Chapter 6: Government Influence on Exchange Rates

PART II: EXCHANGE RATE BEHAVIOR
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Chapter 7: International Arbitrage and Interest Rate Parity
Chapter 8: Relationships among Inflation, Interest Rates, and Exchange Rates
Chapter 9: Forecasting Exchange Rates
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PART III: EXCHANGE RATE RISK MANAGEMENT

Chapter 10: Measuring Exposure to Exchange Rate Fluctuations
Chapter 11: Managing Transaction Exposure
Chapter 12: Managing Economic Exposure and Translation Exposure
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PART IV: LONG-TERM ASSET AND LIABILITY MANAGEMENT

Chapter 13: Direct Foreign Investment
Chapter 14: Multinational Capital Budgeting
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Chapter 15: International Corporate Governance and Control
Chapter 16: Country Risk Analysis
Chapter 17: Multinational Capital Structure and Cost of Capital
Chapter 18: Long-Term Debt Financing

PART V: SHORT-TERM ASSET AND LIABILITY MANAGEMENT
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Chapter 19: Financing International Trade
Chapter 20: Short-Term Financing
Chapter 21: International Cash Management
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, Chapter 01: Multinational Financial Management: An Overview
1. The commonly accepted goal of an MNC is to:
a. maximize short-term earnings.
b. maximize shareholder wealth.
c. minimize risk.
d. A and C.
e. maximize international sales.
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ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.01
NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
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STATE STANDARDS: United States - OH - DISC.INFM.MADU.15.02
KEYWORDS: Bloom's: Knowledge

2. With regard to corporate goals, an MNC is mostly concerned with maximizing ____, and a purely domestic firm is
mostly concerned with maximizing ____.
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a. shareholder wealth; short-term
earnings
b. shareholder wealth; shareholder wealth
c. short-term earnings; sales volume
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d. short-term earnings; shareholder
wealth
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.01
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NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
STATE STANDARDS: United States - OH - DISC.INFM.MADU.15.02
KEYWORDS: Bloom's: Knowledge
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3. For an MNC, agency costs are typically:
a. nonexistent
b. larger than agency costs of a small purely domestic firm.
c. smaller than agency costs of a small purely domestic
firm.
d. the same as agency costs of a small purely domestic firm.
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ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.01
NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
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STATE STANDARDS: United States - OH - DISC.INFM.MADU.15.02
KEYWORDS: Bloom's: Knowledge

, Chapter 01: Multinational Financial Management: An Overview
4. Which of the following could reduce agency problems for an MNC?
a. stock options as managerial compensation
b. hostile takeover threat
c. investor monitoring
d. all of the above are forms of corporate control that could reduce agency problems for an
MNC.
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ANSWER: d
DIFFICULTY: Moderate
LEARNING OBJECTIVES: INFM.MADU.15.01.01
NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
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STATE STANDARDS: United States - OH - DISC.INFM.MADU.15.02
KEYWORDS: Bloom's: Comprehension

5. The valuation of an MNC should rise when an event causes the expected cash flows from foreign subsidiaries to ____
and when the foreign currencies denominating these cash flows are expected
to ____.
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a. decrease;
appreciate
b. increase; appreciate
c. decrease;
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depreciate
d. increase; depreciate
ANSWER: b
DIFFICULTY: Easy
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LEARNING OBJECTIVES: INFM.MADU.15.01.04
NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
STATE STANDARDS: United States - OH - DISC.INFM.MADU.15.02
KEYWORDS: Bloom's: Comprehension
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6. Which of the following theories identifies specialization as a reason for international business?
a. theory of comparative advantage
b. imperfect markets theory
c. product cycle theory
d. none of the above
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ANSWER: a
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.02
NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
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STATE STANDARDS: United States - OH - DISC.INFM.MADU.15.02
KEYWORDS: Bloom's: Knowledge