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1. Themcommonly maccepted mgoalmof man mMNCmismto:
a. maximize mshort-termmearnings.
b. maximize mshareholdermwealth.
c. minimizemrisk.
d. Amand mC.
e. maximize minternationalmsales.
ANSWER: b
DIFFICULTY: Easy
LEARNING mOBJECTIVES:m INFM.MADU.15.01.01
NATIONALmSTANDARDS:m UnitedmStatesm-mBUSPROG.INFM m.MADU.15.03
STATEmSTANDARDS: UnitedmStatesm-mOHm-mDISC.INFM.MADU.15.02
KEYWORDS: Bloom's:mKnowledge
2. With mregard mto mcorporate mgoals,man mMNCmismmostly mconcerned mwith mmaximizingm
,mand mampurely mdomestic mfirmmismmostly mconcerned mwith mmaximizingm .
a. shareholdermwealth;mshort-
termmearnings
b. shareholdermwealth;mshareholdermwealth
c. short-termmearnings;msalesmvolume
d. short-
termmearnings;mshareholdermweal
th
ANSWER: b
DIFFICULTY: Easy
LEARNING mOBJECTIVES:m INFM.MADU.15.01.01
NATIONALmSTANDARDS:m UnitedmStatesm-mBUSPROG.INFM m.MADU.15.03
STATEmSTANDARDS: UnitedmStatesm-mOHm-mDISC.INFM.MADU.15.02
KEYWORDS: Bloom's:mKnowledge
3. Forman mMNC,magency mcostsmaremtypically:
a. nonexistent
b. largermthan magency mcostsmof mamsmallmpurely mdomestic mfirm.
c. smallermthanmagency mcostsmofmamsmallmpurelymdomest
icmfirm.
d. themsamemasmagency mcostsmof mamsmallmpurely mdomestic mfirm.
ANSWER: b
DIFFICULTY: Easy
LEARNING mOBJECTIVES:m INFM.MADU.15.01.01
NATIONALmSTANDARDS:m UnitedmStatesm-mBUSPROG.INFM m.MADU.15.03
STATEmSTANDARDS: UnitedmStatesm-mOHm-mDISC.INFM.MADU.15.02
KEYWORDS: Bloom's:mKnowledge
,Chapter m01:mMultinationalmFinancialmManagement:mAnmOvervie
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4. Which mof mthemfollowingmcould mreduce magency mproblemsmforman mMNC?
a. stock moptionsmasmmanagerialmcompensation
b. hostilemtakeovermthreat
c. investormmonitoring
d. allmof mthemabovemaremformsmofmcorporatemcontrolmthatmcouldmreducemagency mproblemsmfo
rman mMNC.
ANSWER: d
DIFFICULTY: Moderate
LEARNING mOBJECTIVES:m INFM.MADU.15.01.01
NATIONALmSTANDARDS:m UnitedmStatesm-mBUSPROG.INFM m.MADU.15.03
STATEmSTANDARDS: UnitedmStatesm-mOHm-mDISC.INFM.MADU.15.02
KEYWORDS: Bloom's:mComprehension
5. Themvaluation mofmanmMNCmshould mrisemwhen manmeventmcausesmthemexpected mcashmflowsmfrommforeign msubsidiariesmto m
and mwhenmthemforeign mcurrenciesmdenominatingmthesemcashmflowsmaremexpect
ed mto m .
a. decrease;m
appreciate
b. increase;mappreciate
c. decrease;m
depreciate
d. increase;mdepreciate
ANSWER: b
DIFFICULTY: Easy
LEARNING mOBJECTIVES:m INFM.MADU.15.01.04
NATIONALmSTANDARDS:m UnitedmStatesm-mBUSPROG.INFM m.MADU.15.03
STATEmSTANDARDS: UnitedmStatesm-mOHm-mDISC.INFM.MADU.15.02
KEYWORDS: Bloom's:mComprehension
6. Which mof mthemfollowingmtheoriesmidentifiesmspecialization masmamreason mforminternationalmbusiness?
a. theory mof mcomparative madvantage
b. imperfectmmarketsmtheory
c. productmcyclemtheory
d. nonemof mthemabove
ANSWER: a
DIFFICULTY: Easy
LEARNING mOBJECTIVES:m INFM.MADU.15.01.02
NATIONALmSTANDARDS:m UnitedmStatesm-mBUSPROG.INFM m.MADU.15.03
STATEmSTANDARDS: UnitedmStatesm-mOHm-mDISC.INFM.MADU.15.02
KEYWORDS: Bloom's:mKnowledge
, Chapter m01:mMultinationalmFinancialmManagement:mAnmOvervie
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7. Which mofmthemfollowingmtheoriesmidentifiesmthemnontransferabilitymofmresourcesmasmamreason mforminternationalmbusiness?
a. theory mof mcomparative madvantage
b. imperfectmmarketsmtheory
c. productmcyclemtheory
d. nonemof mthemabove
ANSWER: b
DIFFICULTY: Easy
LEARNING mOBJECTIVES:m INFM.MADU.15.01.02
NATIONALmSTANDARDS:m UnitedmStatesm-mBUSPROG.INFM m.MADU.15.03
STATEmSTANDARDS: UnitedmStatesm-mOHm-mDISC.INFM.MADU.15.02
KEYWORDS: Bloom's:mKnowledge
8. Which mof mthemfollowingmtheoriesmsuggestsmthatmfirmsmseek mto mpenetrate mnewmmarketsmovermtime?
a. theory mof mcomparative madvantage
b. imperfectmmarketsmtheory
c. productmcyclemtheory
d. nonemof mthemabove
ANSWER: c
DIFFICULTY: Easy
LEARNING mOBJECTIVES:m INFM.MADU.15.01.02
NATIONALmSTANDARDS:m UnitedmStatesm-mBUSPROG.INFM m.MADU.15.03
STATEmSTANDARDS: UnitedmStatesm-mOHm-mDISC.INFM.MADU.15.02
KEYWORDS: Bloom's:mKnowledge
9. An mindustrymbasedmonmwhichmofmthemfollowingmwould mmostmlikely mtakemadvantagemofmlowermcostsminmsomemlessmdevel
oped mforeign mcountries?
a. assembly mlinemproduction
b. specialized mprofessionalmservices
c. nuclearmmissile mprograms
d. developmentmofmmoremsophisticatedmcompute
rmtechnology
ANSWER: a
DIFFICULTY: Moderate
LEARNING mOBJECTIVES:m INFM.MADU.15.01.02
NATIONALmSTANDARDS:m UnitedmStatesm-mBUSPROG.INFM m.MADU.15.03
STATEmSTANDARDS: UnitedmStatesm-mOHm-mDISC.INFM.MADU.15.02
KEYWORDS: Bloom's:mApplication