1
, Chapter 1 Globalization and the Multinational Firm
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1) What major dimension sets apart international finance from domestic finance?
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A) Foreign exchange and political risks
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B) Market imperfections vb
C) Expanded opportunity set vb vb
D) all of thevb vb
v b options
vb Answer:
D
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
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2) An example of a political risk is
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A) expropriation of assets. vb vb
B) adverse change in tax rules. vb vb vb vb
C) the opposition party being elected.
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D) both the expropriation of assets and adverse changes in
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vb tax rules
vb v b are correct.vb v b Answer: v b D
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
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3) Production of goods and services has become globalized to a large extent as a result of
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A) natural resources being depleted in one country after another.
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B) skilled labor being highly mobile.
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C) multinational corporations' efforts to source inputs and locate production anywhere
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where costs are lower and profits higher.
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D) common tastes worldwide for the same goods
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vb and v b services. v b Answer: v b C
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
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4) Recently, financial markets have become highly integrated. This development
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A) allows investors to diversify their portfolios internationally.
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2
,B) allows minority investors to buy and sell stocks.
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3
, C) has increased the cost of capital for firms.
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4
, Chapter 1 Globalization and the Multinational Firm
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1) What major dimension sets apart international finance from domestic finance?
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A) Foreign exchange and political risks
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B) Market imperfections vb
C) Expanded opportunity set vb vb
D) all of thevb vb
v b options
vb Answer:
D
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
vb vb vb vb vb vb vb vb
2) An example of a political risk is
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A) expropriation of assets. vb vb
B) adverse change in tax rules. vb vb vb vb
C) the opposition party being elected.
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D) both the expropriation of assets and adverse changes in
vb vb vb vb vb vb vb vb
vb tax rules
vb v b are correct.vb v b Answer: v b D
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
vb vb vb vb vb vb vb vb
3) Production of goods and services has become globalized to a large extent as a result of
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A) natural resources being depleted in one country after another.
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B) skilled labor being highly mobile.
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C) multinational corporations' efforts to source inputs and locate production anywhere
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where costs are lower and profits higher.
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D) common tastes worldwide for the same goods
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vb and v b services. v b Answer: v b C
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
vb vb vb vb vb vb vb vb
4) Recently, financial markets have become highly integrated. This development
vb vb vb vb vb vb vb vb
A) allows investors to diversify their portfolios internationally.
vb vb vb vb vb vb
2
,B) allows minority investors to buy and sell stocks.
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3
, C) has increased the cost of capital for firms.
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4
