INTERNATIONAL FINANCIAL
MANAGEMENT 9TH EDITION CHEOL EUN
BRUCE RESNICK TEST BANK ALL
CHAPTERS 100% ORIGINAL VERIFIED A+
CERTIFICATION REVIEW SET 2026
ANSWERS GUARANTEED PASS
⫸ 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. Answer: b.
larger than agency costs of a small purely domestic firm
⫸ 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 above. Answer: d. All of the above
⫸ The agency costs of an MNC are likely to be lower if it:
,a. scatters its subsidiaries across many foreign countries.
b. increases its volume of international business.
c. uses a centralized management style.
d. scatters its subsidiaries across many foreign countries AND increases
its volume of international business. Answer: c. uses a centralized
management style
⫸ The Sarbanes-Oxley Act improved corporate governance of MNCs
because it:
a. made executives more accountable for verifying financial statements.
b. eliminated stock options as a form of compensation.
c. tied executive compensation to firm performance.
d. placed a limit on the amount of funds that managers can spend
Answer: a. made executives more accountable for verifying financial
statements
⫸ Agency costs faced by MNCs may be larger than those faced by
purely domestic firms because:
a. monitoring of managers located in foreign countries is more difficult.
b. foreign subsidiary managers raised in different cultures may not
follow uniform goals.
c. MNCs are relatively large.
,d. All of these are correct.
e. monitoring of managers located in foreign countries is more difficult
AND foreign subsidiary managers raised in different cultures may not
follow uniform goals. Answer: d. All of these are correct
⫸ 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 these are correct Answer: a. theory of comparative advantage
⫸ Which of the following theories identifies the non-transferability of
resources as a reason for international business?
a. theory of comparative advantage
b. imperfect markets theory
c. product cycle theory
d. None of these are correct Answer: b. imperfect markets theory
⫸ Which of the following theories suggests that firms seek to penetrate
new markets over time?
, a. theory of comparative advantage
b. imperfect markets theory
c. product cycle theory
d. None of these are correct. Answer: c. product cycle theory
⫸ An industry based on which of the following would most likely take
advantage of lower costs in some less developed foreign countries?
a. assembly line production
b. specialized professional services
c. nuclear missile programs
d. development of more sophisticated computer technology Answer: a.
assembly line production
⫸ Four MNCs generate the same level of sales. The MNC that
______________________would likely have the most direct foreign
investment.
a. exports all of its products
b. produces and sells its products locally
c. imports products from unrelated firms in other countries and sells
them locally
d. acquires a foreign firm that produces most of its products to be sold in
that foreign country Answer: d. acquires a foreign firm that produces
most of its products to be sold in that foreign country
MANAGEMENT 9TH EDITION CHEOL EUN
BRUCE RESNICK TEST BANK ALL
CHAPTERS 100% ORIGINAL VERIFIED A+
CERTIFICATION REVIEW SET 2026
ANSWERS GUARANTEED PASS
⫸ 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. Answer: b.
larger than agency costs of a small purely domestic firm
⫸ 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 above. Answer: d. All of the above
⫸ The agency costs of an MNC are likely to be lower if it:
,a. scatters its subsidiaries across many foreign countries.
b. increases its volume of international business.
c. uses a centralized management style.
d. scatters its subsidiaries across many foreign countries AND increases
its volume of international business. Answer: c. uses a centralized
management style
⫸ The Sarbanes-Oxley Act improved corporate governance of MNCs
because it:
a. made executives more accountable for verifying financial statements.
b. eliminated stock options as a form of compensation.
c. tied executive compensation to firm performance.
d. placed a limit on the amount of funds that managers can spend
Answer: a. made executives more accountable for verifying financial
statements
⫸ Agency costs faced by MNCs may be larger than those faced by
purely domestic firms because:
a. monitoring of managers located in foreign countries is more difficult.
b. foreign subsidiary managers raised in different cultures may not
follow uniform goals.
c. MNCs are relatively large.
,d. All of these are correct.
e. monitoring of managers located in foreign countries is more difficult
AND foreign subsidiary managers raised in different cultures may not
follow uniform goals. Answer: d. All of these are correct
⫸ 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 these are correct Answer: a. theory of comparative advantage
⫸ Which of the following theories identifies the non-transferability of
resources as a reason for international business?
a. theory of comparative advantage
b. imperfect markets theory
c. product cycle theory
d. None of these are correct Answer: b. imperfect markets theory
⫸ Which of the following theories suggests that firms seek to penetrate
new markets over time?
, a. theory of comparative advantage
b. imperfect markets theory
c. product cycle theory
d. None of these are correct. Answer: c. product cycle theory
⫸ An industry based on which of the following would most likely take
advantage of lower costs in some less developed foreign countries?
a. assembly line production
b. specialized professional services
c. nuclear missile programs
d. development of more sophisticated computer technology Answer: a.
assembly line production
⫸ Four MNCs generate the same level of sales. The MNC that
______________________would likely have the most direct foreign
investment.
a. exports all of its products
b. produces and sells its products locally
c. imports products from unrelated firms in other countries and sells
them locally
d. acquires a foreign firm that produces most of its products to be sold in
that foreign country Answer: d. acquires a foreign firm that produces
most of its products to be sold in that foreign country
