TESTnBANKnfornInternationalnFinancialnManagementn9thnEditionnbynCheolnEun,nBrucenResnicknandnTuugi
Chuluun.
TEST BANK for International Financial Management 9th
n n n n n n n
Edition by Cheol Eun, Bruce Resnick and Tuugi Chuluun.
n n n n n n n n n
ISBN-13: 9781260013870
n
TestnBank Pagen1
, TESTnBANKnfornInternationalnFinancialnManagementn9thnEditionnbynCheolnEun,nBrucenResnicknandnTuugi
Chuluun.
MULTIPLEnCHOICEn-
Choosenthenonenalternativenthatnbestncompletesnthenstatementnornanswersnthenquestion.
n
1) Whatnmajorndimensionnsetsnapartninternationalnfinancenfromndomesticnfinance?
A) Foreignnexchangenandnpoliticalnrisks
B) Marketnimperfections
C) Expandednopportunitynset
D) allnofnthenoptions
2) Annexample(s)nofnanpoliticalnrisknis
A) expropriationnofnassets.
B) adversenchangeninntaxnrules.
C) thenoppositionnpartynbeingnelected.
D) bothnthenexpropriationnofnassetsnandnadversenchangesninntaxnrulesnarencorrect.
3) Productionnofngoodsnandnservicesnhasnbecomenglobalizedntonanlargenextentnasnanresultnof
A) naturalnresourcesnbeingndepletedninnonencountrynafternanother.
B) skillednlabornbeingnhighlynmobile.
C) multinationalncorporations'neffortsntonsourceninputsnandnlocatenproductionnanywheren
wherencostsnarenlowernandnprofitsnhigher.
D) commonntastesnworldwidenfornthensamengoodsnandnservices.
4) Recently,nfinancialnmarketsnhavenbecomenhighlynintegrated.nThisndevelopment
TestnBank Pagen2
, TESTnBANKnfornInternationalnFinancialnManagementn9thnEditionnbynCheolnEun,nBrucenResnicknandnTuugi
Chuluun.
A) allowsninvestorsntondiversifyntheirnportfoliosninternationally.
B) allowsnminorityninvestorsntonbuynandnsellnstocks.
C) hasnincreasednthencostnofncapitalnfornfirms.
D) nonenofnthenoptions
5) Japannhasnexperiencednlargentradensurpluses.nJapaneseninvestorsnhavenrespondedntonthisnby
A) liquidatingntheirnpositionsninnstocksntonbuyndollar-denominatednbonds.
B) investingnheavilyninnU.S.nandnothernforeignnfinancialnmarkets.
C) lobbyingnthenU.S.ngovernmentntondepreciatenitsncurrency.
D) lobbyingnthenJapanesengovernmentntonallownthenyenntonappreciate.
6) Supposenyournfirmninvestsn$100,000ninnanprojectninnItaly.nAtnthentimenthenexchangenratenis
$1.25n=n€1.00.nOnenyearnlaternthenexchangenratenisnthensame,nbutnthenItalianngovernmentnhasnexpropriate
dnyournfirm'snassetsnpayingnonlyn€80,000ninncompensation.nThisnisnannexamplenof
A) exchangenratenrisk.
B) politicalnrisk.
C) marketnimperfections.
D) nonenofnthenoptions,nsincen$100,000n=n€80,000n×n$1.25/€1.00.
TestnBank Pagen3
, TESTnBANKnfornInternationalnFinancialnManagementn9thnEditionnbynCheolnEun,nBrucenResnicknandnTuugi
Chuluun.
7) Supposenyounstartnwithn$100nandnbuynstocknforn£50nwhennthenexchangenratenisn£1n=n$2.nOn
enyearnlater,nthenstocknrisesnton£60.nYounarenhappynwithnyourn20npercentnreturnnonnthenstock,nbutnwh
ennyounsellnthenstocknandnexchangenyourn£60nforndollars,nyounonlyngetn$45nsincenthenpoundnhasnfalle
nnton£1n=n$0.75.nThisnlossnofnvaluenisnannexamplenof
A) exchangenratenrisk.
B) politicalnrisk.
C) marketnimperfections.
D) weaknessninnthendollar.
8) SupposenthatnGreatnBritainnisnanmajornexportnmarketnfornyournfirm,nanU.S.-
basednMNC.nIfnthenBritishnpoundndepreciatesnagainstnthenU.S.ndollar,
A) yournfirmnwillnbenablentonchargenmoreninndollarntermsnwhilenkeepingnpoundnprices
stable.
B) yournfirmnmaynbenpricednoutnofnthenU.K.nmarket,ntonthenextentnthatnyourndollarncosts
staynconstantnandnyournpoundnpricesnwillnrise.
C) tonprotectnU.K.nmarketnshare,nyournfirmnmaynhaventoncutnthendollarnpricenofnyourngoodsnt
onkeepnthenpoundnpricenthensame.
D) yournfirmnmaynbenpricednoutnofnthenU.K.nmarket,ntonthenextentnthatnyourndollarncostsnst
aynconstantnandnyournpoundnpricesnwillnrise,nandntonprotectnU.K.nmarketnshare,nyournfirmnmaynha
ventoncutnthendollarnpricenofnyourngoodsntonkeepnthenpoundnpricenthensame.
9) SupposenMexiconisnanmajornexportnmarketnfornyournU.S.-
basedncompanynandnthenMexicannpesonappreciatesndrasticallynagainstnthenU.S.ndollar.nThisnmeans
TestnBank Pagen4
Chuluun.
TEST BANK for International Financial Management 9th
n n n n n n n
Edition by Cheol Eun, Bruce Resnick and Tuugi Chuluun.
n n n n n n n n n
ISBN-13: 9781260013870
n
TestnBank Pagen1
, TESTnBANKnfornInternationalnFinancialnManagementn9thnEditionnbynCheolnEun,nBrucenResnicknandnTuugi
Chuluun.
MULTIPLEnCHOICEn-
Choosenthenonenalternativenthatnbestncompletesnthenstatementnornanswersnthenquestion.
n
1) Whatnmajorndimensionnsetsnapartninternationalnfinancenfromndomesticnfinance?
A) Foreignnexchangenandnpoliticalnrisks
B) Marketnimperfections
C) Expandednopportunitynset
D) allnofnthenoptions
2) Annexample(s)nofnanpoliticalnrisknis
A) expropriationnofnassets.
B) adversenchangeninntaxnrules.
C) thenoppositionnpartynbeingnelected.
D) bothnthenexpropriationnofnassetsnandnadversenchangesninntaxnrulesnarencorrect.
3) Productionnofngoodsnandnservicesnhasnbecomenglobalizedntonanlargenextentnasnanresultnof
A) naturalnresourcesnbeingndepletedninnonencountrynafternanother.
B) skillednlabornbeingnhighlynmobile.
C) multinationalncorporations'neffortsntonsourceninputsnandnlocatenproductionnanywheren
wherencostsnarenlowernandnprofitsnhigher.
D) commonntastesnworldwidenfornthensamengoodsnandnservices.
4) Recently,nfinancialnmarketsnhavenbecomenhighlynintegrated.nThisndevelopment
TestnBank Pagen2
, TESTnBANKnfornInternationalnFinancialnManagementn9thnEditionnbynCheolnEun,nBrucenResnicknandnTuugi
Chuluun.
A) allowsninvestorsntondiversifyntheirnportfoliosninternationally.
B) allowsnminorityninvestorsntonbuynandnsellnstocks.
C) hasnincreasednthencostnofncapitalnfornfirms.
D) nonenofnthenoptions
5) Japannhasnexperiencednlargentradensurpluses.nJapaneseninvestorsnhavenrespondedntonthisnby
A) liquidatingntheirnpositionsninnstocksntonbuyndollar-denominatednbonds.
B) investingnheavilyninnU.S.nandnothernforeignnfinancialnmarkets.
C) lobbyingnthenU.S.ngovernmentntondepreciatenitsncurrency.
D) lobbyingnthenJapanesengovernmentntonallownthenyenntonappreciate.
6) Supposenyournfirmninvestsn$100,000ninnanprojectninnItaly.nAtnthentimenthenexchangenratenis
$1.25n=n€1.00.nOnenyearnlaternthenexchangenratenisnthensame,nbutnthenItalianngovernmentnhasnexpropriate
dnyournfirm'snassetsnpayingnonlyn€80,000ninncompensation.nThisnisnannexamplenof
A) exchangenratenrisk.
B) politicalnrisk.
C) marketnimperfections.
D) nonenofnthenoptions,nsincen$100,000n=n€80,000n×n$1.25/€1.00.
TestnBank Pagen3
, TESTnBANKnfornInternationalnFinancialnManagementn9thnEditionnbynCheolnEun,nBrucenResnicknandnTuugi
Chuluun.
7) Supposenyounstartnwithn$100nandnbuynstocknforn£50nwhennthenexchangenratenisn£1n=n$2.nOn
enyearnlater,nthenstocknrisesnton£60.nYounarenhappynwithnyourn20npercentnreturnnonnthenstock,nbutnwh
ennyounsellnthenstocknandnexchangenyourn£60nforndollars,nyounonlyngetn$45nsincenthenpoundnhasnfalle
nnton£1n=n$0.75.nThisnlossnofnvaluenisnannexamplenof
A) exchangenratenrisk.
B) politicalnrisk.
C) marketnimperfections.
D) weaknessninnthendollar.
8) SupposenthatnGreatnBritainnisnanmajornexportnmarketnfornyournfirm,nanU.S.-
basednMNC.nIfnthenBritishnpoundndepreciatesnagainstnthenU.S.ndollar,
A) yournfirmnwillnbenablentonchargenmoreninndollarntermsnwhilenkeepingnpoundnprices
stable.
B) yournfirmnmaynbenpricednoutnofnthenU.K.nmarket,ntonthenextentnthatnyourndollarncosts
staynconstantnandnyournpoundnpricesnwillnrise.
C) tonprotectnU.K.nmarketnshare,nyournfirmnmaynhaventoncutnthendollarnpricenofnyourngoodsnt
onkeepnthenpoundnpricenthensame.
D) yournfirmnmaynbenpricednoutnofnthenU.K.nmarket,ntonthenextentnthatnyourndollarncostsnst
aynconstantnandnyournpoundnpricesnwillnrise,nandntonprotectnU.K.nmarketnshare,nyournfirmnmaynha
ventoncutnthendollarnpricenofnyourngoodsntonkeepnthenpoundnpricenthensame.
9) SupposenMexiconisnanmajornexportnmarketnfornyournU.S.-
basedncompanynandnthenMexicannpesonappreciatesndrasticallynagainstnthenU.S.ndollar.nThisnmeans
TestnBank Pagen4
