Multinational Finance – Final, 2026 – Study Material and
Practice Questions
1) Financial globalization has not resulted in:
A) continuing imbalances of balance of payments.
B) an increase in quantity and speed in the flow of capital across the world.
C) capital markets less open and a decrease in the availability of capital for many organizations.
D) uniform ways of ownership, control, and governance across the world. - ANS✔✔ Answer: D
Diff: 1
L.O.: 1.1 Financial Globalization and Risk
Skill: Recognition
AACSB: Application of knowledge
2) BRICs is a term used in international finance to represent assets that are considered to be
inexpensive and sturdy, but fundamentally unsound and and incapable of coping with the
upheavals now apparent in international financial markets. - ANS✔✔ Answer: FALSE
Diff: 1
L.O.: 1.1 Financial Globalization and Risk Skill: Recognition
AACSB: Application of knowledge
3) Multinational enterprises (MNEs) are firms, both for profit companies and not-for-profit
organizations, that have operations in more than one country, and conduct their business
through foreign subsidiaries, branches, or joint ventures with host country firms.
Answer: TRUE
Diff: 1
L.O.: 1.1 Financial Globalization and Risk Skill: Recognition
AACSB: Application of knowledge - ANS✔✔
,4) Ownership, control, and governance changes radically across the world. The publicly traded
company is not the dominant global business organization—the privately held or family-owned
business is the prevalent structure—and their goals and measures of performance differ
dramatically. - ANS✔✔ Answer: TRUE
Diff: 1
L.O.: 1.1 Financial Globalization and Risk Skill: Recognition
AACSB: Application of knowledge
1) A well-established, large U.S.-based MNE will probably NOT be able to overcome which of the
following obstacles to maximizing firm value?
A) an open market place
B) high quality strategic management
C) access to capital
D) none of the above - ANS✔✔ Answer: D
Diff: 1
L.O.: 1.2 The Global Financial Marketplace Skill: Conceptual
AACSB: Application of knowledge
2) A well-established, large China-based MNE will probably be most adversely affected by which
of the following elements of firm value?
A) an open marketplace
B) high-quality strategic management
C) access to capital
D) access to qualified labor pool
Answer: A
Diff: 2 - ANS✔✔
,L.O.: 1.2 The Global Financial Marketplace Skill: Conceptual
AACSB: Application of knowledge
3) A well-established, large, Brazil-based MNE will probably be most adversely affected by which
of the following elements of firm value?
A) an open marketplace
B) high-quality strategic management
C) access to capital
D) access to qualified labor pool - ANS✔✔ Answer: C
Diff: 2
L.O.: 1.2 The Global Financial Marketplace Skill: Conceptual
AACSB: Application of knowledge
4) A major cost avoided in the eurocurrency markets is the payment of deposit insurance fees,
such as:
A) Federal Deposit Insurance Corporation - FDIC
B) Office of the Comptroller of the Currency - OCC
C) International Monetary Fund - IMF D) World Bank - WB - ANS✔✔ Answer: A
Diff: 2
L.O.: 1.2 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge
5) The modern eurocurrency market was born shortly after: A) World War II
B) World War I
C) Korean War
D) Bosnian War - ANS✔✔ Answer: A
Diff: 1
, L.O.: 1.2 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge
6) The reference rate of interest in the eurocurrency market is the: A) London Interbank Offered
Rate
B) Prima rate
C) Federal funds rate
D) Treasury rate - ANS✔✔ Answer: A
Diff: 1
L.O.: 1.2 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge
7) Interest spreads in the eurocurrency market are small for many reasons EXCEPT:
A) Eurocurrency loans are secured loans.
B) Eurocurrency deposits and loans are made in amounts of $500,000 or more on an unsecured
basis.
C) The eurocurrency is a wholesale market.
D) Borrowers are usually large corporations or government entities. - ANS✔✔ Answer: A
Diff: 2
L.O.: 1.2 The Global Financial Marketplace
Skill: Recognition
AACSB: Application of knowledge
8) Your authors suggest that one way to characterize the global financial marketplace is through
its assets, institutions, and linkages. - ANS✔✔ Answer: TRUE
Diff: 1
L.O.: 1.2 The Global Financial Marketplace Skill: Recognition
Practice Questions
1) Financial globalization has not resulted in:
A) continuing imbalances of balance of payments.
B) an increase in quantity and speed in the flow of capital across the world.
C) capital markets less open and a decrease in the availability of capital for many organizations.
D) uniform ways of ownership, control, and governance across the world. - ANS✔✔ Answer: D
Diff: 1
L.O.: 1.1 Financial Globalization and Risk
Skill: Recognition
AACSB: Application of knowledge
2) BRICs is a term used in international finance to represent assets that are considered to be
inexpensive and sturdy, but fundamentally unsound and and incapable of coping with the
upheavals now apparent in international financial markets. - ANS✔✔ Answer: FALSE
Diff: 1
L.O.: 1.1 Financial Globalization and Risk Skill: Recognition
AACSB: Application of knowledge
3) Multinational enterprises (MNEs) are firms, both for profit companies and not-for-profit
organizations, that have operations in more than one country, and conduct their business
through foreign subsidiaries, branches, or joint ventures with host country firms.
Answer: TRUE
Diff: 1
L.O.: 1.1 Financial Globalization and Risk Skill: Recognition
AACSB: Application of knowledge - ANS✔✔
,4) Ownership, control, and governance changes radically across the world. The publicly traded
company is not the dominant global business organization—the privately held or family-owned
business is the prevalent structure—and their goals and measures of performance differ
dramatically. - ANS✔✔ Answer: TRUE
Diff: 1
L.O.: 1.1 Financial Globalization and Risk Skill: Recognition
AACSB: Application of knowledge
1) A well-established, large U.S.-based MNE will probably NOT be able to overcome which of the
following obstacles to maximizing firm value?
A) an open market place
B) high quality strategic management
C) access to capital
D) none of the above - ANS✔✔ Answer: D
Diff: 1
L.O.: 1.2 The Global Financial Marketplace Skill: Conceptual
AACSB: Application of knowledge
2) A well-established, large China-based MNE will probably be most adversely affected by which
of the following elements of firm value?
A) an open marketplace
B) high-quality strategic management
C) access to capital
D) access to qualified labor pool
Answer: A
Diff: 2 - ANS✔✔
,L.O.: 1.2 The Global Financial Marketplace Skill: Conceptual
AACSB: Application of knowledge
3) A well-established, large, Brazil-based MNE will probably be most adversely affected by which
of the following elements of firm value?
A) an open marketplace
B) high-quality strategic management
C) access to capital
D) access to qualified labor pool - ANS✔✔ Answer: C
Diff: 2
L.O.: 1.2 The Global Financial Marketplace Skill: Conceptual
AACSB: Application of knowledge
4) A major cost avoided in the eurocurrency markets is the payment of deposit insurance fees,
such as:
A) Federal Deposit Insurance Corporation - FDIC
B) Office of the Comptroller of the Currency - OCC
C) International Monetary Fund - IMF D) World Bank - WB - ANS✔✔ Answer: A
Diff: 2
L.O.: 1.2 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge
5) The modern eurocurrency market was born shortly after: A) World War II
B) World War I
C) Korean War
D) Bosnian War - ANS✔✔ Answer: A
Diff: 1
, L.O.: 1.2 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge
6) The reference rate of interest in the eurocurrency market is the: A) London Interbank Offered
Rate
B) Prima rate
C) Federal funds rate
D) Treasury rate - ANS✔✔ Answer: A
Diff: 1
L.O.: 1.2 The Global Financial Marketplace Skill: Recognition
AACSB: Application of knowledge
7) Interest spreads in the eurocurrency market are small for many reasons EXCEPT:
A) Eurocurrency loans are secured loans.
B) Eurocurrency deposits and loans are made in amounts of $500,000 or more on an unsecured
basis.
C) The eurocurrency is a wholesale market.
D) Borrowers are usually large corporations or government entities. - ANS✔✔ Answer: A
Diff: 2
L.O.: 1.2 The Global Financial Marketplace
Skill: Recognition
AACSB: Application of knowledge
8) Your authors suggest that one way to characterize the global financial marketplace is through
its assets, institutions, and linkages. - ANS✔✔ Answer: TRUE
Diff: 1
L.O.: 1.2 The Global Financial Marketplace Skill: Recognition
