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
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

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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
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Chapter 2: International Flow of Funds
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Chapter 3: International Financial Markets
Chapter 4: Exchange Rate Determination
Chapter 5: Currency Derivatives
Chapter 6: Government Influence on Exchange Rates
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PART II: EXCHANGE RATE BEHAVIOR

Chapter 7: International Arbitrage and Interest Rate Parity
Chapter 8: Relationships among Inflation, Interest Rates, and Exchange Rates
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Chapter 9: Forecasting Exchange Rates

PART III: EXCHANGE RATE RISK MANAGEMENT

Chapter 10: Measuring Exposure to Exchange Rate Fluctuations
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Chapter 11: Managing Transaction Exposure
Chapter 12: Managing Economic Exposure and Translation Exposure

PART IV: LONG-TERM ASSET AND LIABILITY MANAGEMENT
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Chapter 13: Direct Foreign Investment
Chapter 14: Multinational Capital Budgeting
Chapter 15: International Corporate Governance and Control
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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:
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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
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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

2. With regard to corporate goals, an MNC is mostly concerned with maximizing ____, and a purely domestic firm is
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mostly concerned with maximizing ____.
a. shareholder wealth; short-term
earnings
b. shareholder wealth; shareholder wealth
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c. short-term earnings; sales volume
d. short-term earnings; shareholder
wealth
ANSWER: b
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DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.01
NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
STATE STANDARDS: United States - OH - DISC.INFM.MADU.15.02
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KEYWORDS: Bloom's: Knowledge

3. For an MNC, agency costs are typically:
a. nonexistent
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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
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, Chapter 01: Multinational Financial Management: An Overview
4. Which of the following could reduce agency problems for an MNC?
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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
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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: Comprehension

5. The valuation of an MNC should rise when an event causes the expected cash flows from foreign subsidiaries to ____
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and when the foreign currencies denominating these cash flows are expected
to ____.
a. decrease;
appreciate
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b. increase; appreciate
c. decrease;
depreciate
d. increase; depreciate
ANSWER: b
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DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.04
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

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