Test Bank for Multinational Business Finance 16th Edition By (Eiteman/Stonehill/Moffett), ISBN: 9780137496013, All 18 Chapters Covered, Verified Latest Edition

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Multinational vBusiness vFinance, v16e v(Eiteman/Stonehill/Moffett)
Chapter v1 Multinational vFinancial vManagement: vOpportunities vand vChallenges

1.1 The vGlobal vFinancial vMarketplace

1) Financial vglobalization vhas vNOT vresulted vin:
A) continuing vimbalances vof vbalance vof vpayments.
B) an vincrease vin vquantity vand vspeed vin vthe vflow vof vcapital vacross vthe vworld.
C) capital vmarkets vless vopen vand va vdecrease vin vthe vavailability vof vcapital vfor vmany
vorganizations.
D) uniform vways vof vownership, vcontrol, vand vgovernance vacross vthe
vworld.vAnswer: v D
Diff: v1
L.O.: v1.1 vThe vGlobal vFinancial vMarketplace
vSkill: v Recognition
AACSB: v Application vof vknowledge

2) Financial vglobalization vhas vNOT vresulted vin:
A) continuing vimbalances vof vbalance vof vpayments.
B) an vincrease vin vquantity vand vspeed vin vthe vflow vof vcapital vacross vthe vworld.
C) capital vmarkets vmore vopen vand van vincrease vin vthe vavailability vof vcapital
vfor vmanyvorganizations.
D) an vincrease vin vthe vflow vof vcapital vinto vand vout vof vindustrialized
vmarkets.vAnswer: v C
Diff: v1
L.O.: v1.1 vThe vGlobal vFinancial vMarketplace
vSkill: v Recognition
AACSB: v Application vof vknowledge

3) The vinstitutions vof vglobal vfinance vare:
A) central vbanks.
B) commercial vbanks.
C) investment vbanks.
D) All vof vthe vabove vare vinstitutions vof vglobal
vfinance.vAnswer: v D
Diff: v1
L.O.: v1.1 vThe vGlobal vFinancial vMarketplace
vSkill: v Recognition
AACSB: v Application vof vknowledge




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4) A vmajor vcost vavoided vin vthe veurocurrency vmarkets vis vthe vpayment vof vdeposit
vinsurance vfees,vsuch vas:
A) Federal vDeposit vInsurance vCorporation v— vFDIC.
B) Office vof vthe vComptroller vof vthe vCurrency v— vOCC.
C) International vMonetary vFund v— vIMF.
D) World vBank v—
vWB.vAnswer: v A
Diff: v2
L.O.: v1.1 vThe vGlobal vFinancial vMarketplace
vSkill: v Recognition
AACSB: v Application vof vknowledge

5) The vmodern veurocurrency vmarket vwas vborn vshortly vafter:
A) World vWar vII.
B) World vWar vI.
C) Korean vWar.
D) Bosnian
vWar.vAnswer: v v
v A vDiff: v1
L.O.: v1.1 vThe vGlobal vFinancial vMarketplace
vSkill: v Recognition
AACSB: v Application vof vknowledge

6) The vreference vrate vof vinterest vin vthe veurocurrency vmarket vis vthe:
A) London vInterbank vOffered vRate.
B) Prima vrate.
C) Federal vfunds vrate.
D) Treasury
vrate.vAnswer: v v
v A vDiff: v1
L.O.: v1.1 vThe vGlobal vFinancial vMarketplace
vSkill: v Recognition
AACSB: v Application vof vknowledge

7) Interest vspreads vin vthe veurocurrency vmarket vare vsmall vfor vmany vreasons vEXCEPT:
A) Eurocurrency vloans vare vsecured vloans.
B) Eurocurrency vdeposits vand vloans vare vmade vin vamounts vof v$500,000 vor vmore von van
vunsecuredvbasis.
C) The veurocurrency vis va vwholesale vmarket.
D) Borrowers vare vusually vlarge vcorporations vor vgovernment
ventities.vAnswer: v A
Diff: v2
L.O.: v1.1 vThe vGlobal vFinancial vMarketplace
vSkill: v Recognition
AACSB: v Application vof vknowledge



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8) Multinational venterprises v(MNEs) vare vfirms, vboth vfor-profit vcompanies vand vnot-for-
profit vorganizations, vthat vhave voperations vin vmore vthan vone vcountry, vand vconduct vtheir
vbusiness vthroughvforeign vsubsidiaries, vbranches, vor vjoint vventures vwith vhost vcountry vfirms.
Answer: vTRUE
vDiff: v1
L.O.: v1.1 vThe vGlobal vFinancial vMarketplace
vSkill: v Recognition
AACSB: v Application vof vknowledge

9) Ownership, vcontrol, vand vgovernance vchanges vradically vacross vthe vworld. vThe vpublicly
vtradedvcompany vis vnot vthe vdominant vglobal vbusiness vorganization—the vprivately vheld vor
vfamily-ownedvbusiness vis vthe vprevalent vstructure—and vtheir vgoals vand vmeasures vof
vperformance vdiffer vdramatically.
Answer: vTRUE
vDiff: v1
L.O.: v1.1 vThe vGlobal vFinancial vMarketplace
vSkill: v Recognition
AACSB: v Application vof vknowledge

10) The vsecurities vat vthe vheart vof vthe vglobal vcapital vmarkets vare vthe vMortgage vBacked
vSecuritiesv(MBS). vThe vhealth vand vsecurity vof vthe vglobal vfinancial vsystem vrely von vthe
vquality vof vthese vsecurities.
Answer: vFALSE
vDiff: v1
L.O.: v1.1 vThe vGlobal vFinancial vMarketplace
vSkill: v Recognition
AACSB: v Application vof vknowledge

11) The vU.S. vdollar vhas vbeen vthe vfocal vpoint vof vcurrency vtrading vsince vthe v1940s. vAs
va vresult,vmost vof vthe vworld's vcurrencies vare vquoted vagainst vthe vdollar.
Answer: vTRUE
vDiff: v1
L.O.: v1.1 vThe vGlobal vFinancial vMarketplace
vSkill: v Recognition
AACSB: v Application vof vknowledge

12) Several vof vthe vworld's vmajor vcurrency vexchange vrates vfollow va vspecific vquotation
vconvention vthat vis vthe vresult vof vtradition vand vhistory. vThe vexchange vrate vbetween vthe
vU.S. vdollar vand vthe veurovis valways vquoted vas v"dollars vper veuro."
Answer: vTRUE
vDiff: v1
L.O.: v1.1 vThe vGlobal vFinancial vMarketplace
vSkill: v Recognition
AACSB: v Application vof vknowledge




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vInc.