Test Bank for International Financial Management 14th Edition By Jeff Madura |All Chapters 1 - 21| Complete Guide A+

,Chapter 01: Multinational Financial Management: An Overvie
2p 2p 2p 2p 2p 2p


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1. The commonly accepted goal of an MNC is to:
2p 2p 2p 2p 2p 2p 2p 2p


a. maximize short-term earnings. 2p 2p


b. maximize shareholder wealth. 2p 2p


c. minimize risk. 2p


d. A and C. 2p 2p


e. maximize international sales. 2p 2p



ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.01
2p 2 p


NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
2p 2 p 2p 2p 2p 2p


STATE STANDARDS:
2p United States - OH - DISC.INFM.MADU.15.02 2p 2p 2p 2p 2p


KEYWORDS: Bloom's: Knowledge 2p




2. With regard to corporate goals, an MNC is mostly concerned with maximizing
2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p


, and a purely domestic firm is mostly concerned with maximizing
2p 2p 2p 2p 2p . 2p 2p 2p 2p 2p 2p


a. shareholder wealth; short- 2p 2p


term earnings 2p


b. shareholder wealth; shareholder wealth 2p 2p 2p


c. short-term earnings; sales volume 2p 2p 2p


d. short-
term earnings; shareholder weal
2p 2p 2p


th
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.01
2p 2 p


NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
2p 2 p 2p 2p 2p 2p


STATE STANDARDS:
2p United States - OH - DISC.INFM.MADU.15.02 2p 2p 2p 2p 2p


KEYWORDS: Bloom's: Knowledge 2p




3. For an MNC, agency costs are typically:
2p 2p 2p 2p 2p 2p


a. nonexistent
b. larger than agency costs of a small purely domestic firm.
2p 2p 2p 2p 2p 2p 2p 2p 2p


c. smaller than agency costs of a small purely domest
2p 2p 2p 2p 2p 2p 2p 2p


ic firm. 2p


d. the same as agency costs of a small purely domestic firm.
2p 2p 2p 2p 2p 2p 2p 2p 2p 2p



ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.01
2p 2 p


NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
2p 2 p 2p 2p 2p 2p


STATE STANDARDS:
2p United States - OH - DISC.INFM.MADU.15.02 2p 2p 2p 2p 2p


KEYWORDS: Bloom's: Knowledge 2p

,Chapter 01: Multinational Financial Management: An Overvie
2p 2p 2p 2p 2p 2p


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4. Which of the following could reduce agency problems for an MNC?
2p 2p 2p 2p 2p 2p 2p 2p 2p 2p


a. stock options as managerial compensation
2p 2p 2p 2p


b. hostile takeover threat 2p 2p


c. investor monitoring 2p


d. all of the above are forms of corporate control that could reduce agency problems fo
2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p


r an MNC. 2p 2p



ANSWER: d
DIFFICULTY: Moderate
LEARNING OBJECTIVES: INFM.MADU.15.01.01 2p 2 p


NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
2p 2 p 2p 2p 2p 2p


STATE STANDARDS: 2p United States - OH - DISC.INFM.MADU.15.02 2p 2p 2p 2p 2p


KEYWORDS: Bloom's: Comprehension 2p




5. The valuation of an MNC should rise when an event causes the expected cash flows from foreign subsidiaries to
2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p


and when the foreign currencies denominating these cash flows are expect
2p 2p 2p 2p 2p 2p 2p 2p 2p 2p


ed to .
2p 2p


a. decrease; 2p


appreciate
b. increase; appreciate 2p


c. decrease; 2p


depreciate
d. increase; depreciate 2p



ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.04 2p 2 p


NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
2p 2 p 2p 2p 2p 2p


STATE STANDARDS: 2p United States - OH - DISC.INFM.MADU.15.02 2p 2p 2p 2p 2p


KEYWORDS: Bloom's: Comprehension 2p




6. Which of the following theories identifies specialization as a reason for international business?
2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p


a. theory of comparative advantage 2p 2p 2p


b. imperfect markets theory 2p 2p


c. product cycle theory 2p 2p


d. none of the above 2p 2p 2p



ANSWER: a
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.02 2p 2 p


NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
2p 2 p 2p 2p 2p 2p


STATE STANDARDS: 2p United States - OH - DISC.INFM.MADU.15.02 2p 2p 2p 2p 2p


KEYWORDS: Bloom's: Knowledge 2p

, Chapter 01: Multinational Financial Management: An Overvie
2p 2p 2p 2p 2p 2p


w
7. Which of the following theories identifies the nontransferability of resources as a reason for international business?
2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p


a. theory of comparative advantage
2p 2p 2p


b. imperfect markets theory 2p 2p


c. product cycle theory 2p 2p


d. none of the above
2p 2p 2p



ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.02
2p 2 p


NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
2p 2 p 2p 2p 2p 2p


STATE STANDARDS:
2p United States - OH - DISC.INFM.MADU.15.02 2p 2p 2p 2p 2p


KEYWORDS: Bloom's: Knowledge 2p




8. Which of the following theories suggests that firms seek to penetrate new markets over time?
2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p


a. theory of comparative advantage
2p 2p 2p


b. imperfect markets theory 2p 2p


c. product cycle theory 2p 2p


d. none of the above
2p 2p 2p



ANSWER: c
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.02
2p 2 p


NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
2p 2 p 2p 2p 2p 2p


STATE STANDARDS:
2p United States - OH - DISC.INFM.MADU.15.02 2p 2p 2p 2p 2p


KEYWORDS: Bloom's: Knowledge 2p




9. An industry based on which of the following would most likely take advantage of lower costs in some less devel
2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p 2p


oped foreign countries?
2p 2p


a. assembly line production 2p 2p


b. specialized professional services 2p 2p


c. nuclear missile programs
2p 2p


d. development of more sophisticated compute2p 2p 2p 2p


r technology
2p



ANSWER: a
DIFFICULTY: Moderate
LEARNING OBJECTIVES: INFM.MADU.15.01.02
2p 2 p


NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
2p 2 p 2p 2p 2p 2p


STATE STANDARDS:
2p United States - OH - DISC.INFM.MADU.15.02 2p 2p 2p 2p 2p


KEYWORDS: Bloom's: Application 2p