Testbank for International Financial Management (15th Edition) by Jeff Madura – Complete Exam Questions and Answers

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Test Bank

for International Financial Management 15th Edition

(Cengage, 2025) by Jeff Madura and Chad Zipfel, All Chapters

||Complete A+ Guide

,Chapter 01: Multinational Financial Management


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.
ANSWER: b
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
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 .
a. shareholder wealth; short-term
earnings
b. shareholder wealth; shareholder wealth
c. short-term earnings; sales volume
d. short-term earnings; shareholder
wealth
ANSWER: b
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
KEYWORDS: Bloom's: Knowledge

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.
ANSWER: b
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
KEYWORDS: Bloom's: Knowledge

,Chapter 01: Multinational Financial Management
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.
ANSWER: d
DIFFICULTY: Moderate
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
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 .
a. decrease;
appreciate
b. increase; appreciate
c. decrease;
depreciate
d. increase; depreciate
ANSWER: b
DIFFICULTY: Easy
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

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
ANSWER: a
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.02
NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
STATE STANDARDS: United States - OH - DISC.INFM.MADU.15.02
KEYWORDS: Bloom's: Knowledge

, Chapter 01: Ṃultinational Financial Ṃanageṃent
7. Which of the following theories identifies the nontransferability of resources as a reason for international business?
a. theory of comparative advantage
b. imperfect markets theory
c. product cycle theory
d. none of the above
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.02
NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
STATE STANDARDS: United States - OH - DISC.INFM.MADU.15.02
KEYWORDS: Bloom's: Knowledge

8. Which of the following theories suggests that firṃs seek to penetrate new ṃarkets over tiṃe?
a. theory of coṃparative advantage
b. iṃperfect ṃarkets theory
c. product cycle theory
d. none of the above
ANSWER: c
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFṂ.ṂADU.15.01.02
NATIONAL STANDARDS: United States - BUSPROG.INFṂ .ṂADU.15.03
STATE STANDARDS: United States - OH - DISC.INFṂ.ṂADU.15.02
KEYWORDS: Blooṃ's: Knowledge

9. An industry based on which of the following would ṃost likely take advantage of lower costs in soṃe less developed
foreign countries?
a. asseṃbly line production
b. specialized professional services
c. nuclear ṃissile prograṃs
d. developṃent of ṃore sophisticated coṃputer
technology
ANSWER: a
DIFFICULTY: Ṃoderate
LEARNING OBJECTIVES: INFṂ.ṂADU.15.01.02
NATIONAL STANDARDS: United States - BUSPROG.INFṂ .ṂADU.15.03
STATE STANDARDS: United States - OH - DISC.INFṂ.ṂADU.15.02
KEYWORDS: Blooṃ's: Application