Multinational Business Finance 14th Edition Test Bank – Eiteman, Stonehill, Moffett – Complete Chapters 1-9

Test Bank t




For
Multinational Business Finance t t




Fourteenth Edition t




Global Edition t




Rodrigo J. Hernandez t t




Radford University t




David K. Eiteman t t


University of California, Los Angeles
t t t t




Arthur I. Stonehill t t



Oregon State University and University of Hawaii at Manoa
t t t t t t t t




Michael H. Moffett t t




Copyrightt2016tPearsontEducation,tLtd.t

,iittttContentst


Thunderbird School of Global Management
t t t t t


at Arizona State University
t t t




MultinationaltBusinesstFinance,t14e,tGlobaltEditiont(Eiteman)
Chaptert1tttMultinationaltFinancialtManagement:tOpportunitiestandtChallenges

1.1tttFinancialtGlobalizationtandtRisk

1)tFinancialtglobalizationthastnottresultedtin:
A)tcontinuingtimbalancestoftbalancetoftpayments.
B)tantincreasetintquantitytandtspeedtintthetflowtoftcapitaltacrosstthetworld.
C)tcapitaltmarketstlesstopentandtatdecreasetintthetavailabilitytoftcapitaltfortmanytorganizations.
D)tuniformtwaystoftownership,tcontrol,tandtgovernancetacrosstthetworld.
Answer:ttD
Diff:t1
L.O.:tt1.1tFinancialtGlobalizationtandtRisk
Skill:ttRecognition
AACSB:ttApplicationtoftknowledge

2)tBRICstistattermtusedtintinternationaltfinancettotrepresenttassetstthattaretconsideredttotbetinexpensivetan
dtsturdy,tbuttfundamentallytunsoundtandtandtincapabletoftcopingtwithtthetupheavalstnowtapparenttintinter
nationaltfinancialtmarkets.
Answer:ttFALSE
Diff:t1
L.O.:tt1.1tFinancialtGlobalizationtandtRisk
Skill:ttRecognition
AACSB:ttApplicationtoftknowledge

3)tMultinationaltenterprisest(MNEs)taretfirms,tbothtfortprofittcompaniestandtnot-for-
profittorganizations,tthatthavetoperationstintmoretthantonetcountry,tandtconductttheirtbusinesstthroughtfor
eigntsubsidiaries,tbranches,tortjointtventurestwiththosttcountrytfirms.
Answer:ttTRUE
Diff:t1
L.O.:tt1.1tFinancialtGlobalizationtandtRisk
Skill:ttRecognition
AACSB:ttApplicationtoftknowledge

4)tOwnership,tcontrol,tandtgovernancetchangestradicallytacrosstthetworld.tThetpubliclyttradedtcompanyti
stnottthetdominanttglobaltbusinesstorganization—thetprivatelytheldtortfamily-
ownedtbusinesstistthetprevalenttstructure—
andttheirtgoalstandtmeasurestoftperformancetdiffertdramatically.
Answer:ttTRUE
Diff:t1
L.O.:tt1.1tFinancialtGlobalizationtandtRisk

,Skill:ttRecognition
AACSB:ttApplicationtoftknowledge




Copyrightt2016tPearsontEducation,tLtd.t

, ivttttContentst


5)tThetthemetdominatingtglobaltfinancialtmarketsttodaytistthetcomplexitytoftriskstassociatedtwithtfinancia
ltglobalization.tListtandtexplaintexamplestoftthetcomplexitytoftriskstaffectingtthetleadingtandtmanagingtoft
multinationaltfirmstintthetrapidlytmovingtmarketplace.
Answer:ttThetfollowingtistatsamplingtoftthistcomplexitytoftrisks:t1)tThetinternationaltmonetarytsystemtistu
ndertconstanttscrutiny.tThetrisetoftthetChinesetrenminbitistchangingtmuchtoftthetworld'stoutlooktontcurren
cytexchange,treservetcurrencies,tandtthetrolestoftthetdollartandttheteuro.t2)tLargetfiscaltdeficits,tincludingtt
hetcurrentteurozonetcrisis,tplaguetmosttoftthetmajorttradingtcountriestoftthetworld,tcomplicatingtfiscaltandt
monetarytpolicies,tandtultimately,tinteresttratestandtexchangetrates.t3)tManytcountriestexperiencetcontinu
ingtbalancetoftpaymentstimbalances,tandtintsometcases,tdangerouslytlargetdeficitstandtsurpluses.t4)tOwne
rship,tcontrol,tandtgovernancetvarytradicallytacrosstthetworld.t5)tGlobaltcapitaltmarketstthattnormallytpro
videtthetmeansttotlowertatfirm'stcosttoftcapital,tandteventmoretcritically,tincreasetthetavailabilitytoftcapital,t
havetintmanytwaystshrunktintsizetandthavetbecometlesstopentandtaccessiblettotmanytoftthetworld'storganiz
ations.t6)tFinancialtglobalizationthastresultedtintthetebbtandtflowtoftcapitaltintandtouttoftbothtindustrialtandt
emergingtmarkets,tgreatlytcomplicatingtfinancialtmanagement.
Diff:t1
L.O.:tt1.1tFinancialtGlobalizationtandtRisk
Skill:ttConceptual
AACSB:ttApplicationtoftknowledge

1.2tttThetGlobaltFinancialtMarketplace

1)tAtwell-established,tlargetU.S.-
basedtMNEtwilltprobablytNOTtbetablettotovercometwhichtoftthetfollowingtobstaclesttotmaximizingtfirmtv
alue?
A)tantopentmarkettplace
B)thightqualitytstrategictmanagement
C)taccessttotcapital
D)tnonetoftthetabove
Answer:ttD
Diff:t1
L.O.:tt1.2tThetGlobaltFinancialtMarketplace
Skill:ttConceptual
AACSB:ttApplicationtoftknowledge

2)tAtwell-established,tlargetChina-
basedtMNEtwilltprobablytbetmosttadverselytaffectedtbytwhichtoftthetfollowingtelementstoftfirmtvalue?
A)tantopentmarketplace
B)thigh-qualitytstrategictmanagement
C)taccessttotcapital
D)taccessttotqualifiedtlabortpool
Answer:ttA
Diff:t2
L.O.:tt1.2tThetGlobaltFinancialtMarketplace
Skill:ttConceptual
AACSB:ttApplicationtoftknowledge