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Multinational Business Finance, 16e (Eiteman/Stonehill/Moffett)
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Chapter 1 Multinational Financial Management: Opportunities and Challenges
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1.1 The Global Financial Marketplace
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1) Financial globalization has NOT resulted in:
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A) continuing imbalances of balance of payments.ci ci ci ci ci
B) an increase in quantity and speed in the flow of capital across the world.
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C) capital markets less open and a decrease in the availability of capital for many organizations.
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D) uniform ways of ownership, control, and governance across the world.
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Answer: D ci
Diff: 1
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L.O.: 1.1 The Global Financial MarketplaceSkill
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: Recognition
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AACSB: Application of knowledge
c i ci ci
2) Financial globalization has NOT resulted in:
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A) continuing imbalances of balance of payments.ci ci ci ci ci
B) an increase in quantity and speed in the flow of capital across the world.
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C) capital markets more open and an increase in the availability of capital for many
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organizations.
D) an increase in the flow of capital into and out of industrialized markets.
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Answer: C ci
Diff: 1
ci
L.O.: 1.1 The Global Financial MarketplaceSkill
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: Recognition
ci
AACSB: Application of knowledge
c i ci ci
3) The institutions of global finance are:
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A) central banks. ci
B) commercial banks. ci
C) investment banks. ci
D) All of the above are institutions of global finance.
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Answer: D ci
Diff: 1
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L.O.: 1.1 The Global Financial MarketplaceSkill
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: Recognition
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AACSB: Application of knowledge
c i ci ci
1
Copyright © 2023 Pearson Education, Inc. ci ci ci ci ci
,https://browsegrades.net/singlePaper/416756/testbank-and-solution-manua-for-multinational-bu
4) A major cost avoided in the eurocurrency markets is the payment of deposit insurance fees,
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such as: ci
A) Federal Deposit Insurance Corporation — FDIC.
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B) Office of the Comptroller of the Currency — OCC.
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C) International Monetary Fund — IMF. ci ci ci ci
D) World Bank — ci ci
WB.Answer: A
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Diff: 2 ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
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AACSB: Application of knowledge c i ci ci
5) The modern eurocurrency market was born shortly after:
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A) World War II. ci ci
B) World War I. ci ci
C) Korean War. ci
D) Bosnian War. ci ic
Answer: A Dif cicic i ci
f: 1 ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
ci
AACSB: Application of knowledge c i ci ci
6) The reference rate of interest in the eurocurrency market is the:
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A) London Interbank Offered Rate. ci ci ci
B) Prima rate. ci
C) Federal funds rate. ci ci
D) Treasury rate. ci ic
Answer: A Dif cicic i ci
f: 1 ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
ci
AACSB: Application of knowledge c i ci ci
7) Interest spreads in the eurocurrency market are small for many reasons EXCEPT:
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A) Eurocurrency loans are secured loans. ci ci ci ci
B) Eurocurrency deposits and loans are made in amounts of $500,000 or more on an unsecured
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basis.
C) The eurocurrency is a wholesale market.
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D) Borrowers are usually large corporations or government entities.
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Answer: A ci
Diff: 2 ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
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AACSB: Application of knowledge c i ci ci
2
Copyright © 2023 Pearson Education, Inc. ci ci ci ci ci
, https://browsegrades.net/singlePaper/416756/testbank-and-solution-manua-for-multinational-bu
8) Multinational enterprises (MNEs) are firms, both for-profit companies and not-for-
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profit organizations, that have operations in more than one country, and conduct their business th
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roughforeign subsidiaries, branches, or joint ventures with host country firms.
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Answer: TRUEDiff ci ic
:1
ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
ci
AACSB: Application of knowledge c i ci ci
9) Ownership, control, and governance changes radically across the world. The publicly traded
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company is not the dominant global business organization—the privately held or family-
ci ci ci ci ci ci ci ci ci ci ci
ownedbusiness is the prevalent structure—
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and their goals and measures of performance differ dramatically.
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Answer: TRUEDiff ci ic
:1
ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
ci
AACSB: Application of knowledge c i ci ci
10) The securities at the heart of the global capital markets are the Mortgage Backed Securities
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(MBS). The health and security of the global financial system rely on the quality of these secur
ci ci ci ci ci ci ci ci ci ci ci ci ci ci ci ci
ities.
Answer: FALSEDi ci ic
ff: 1 ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
ci
AACSB: Application of knowledge c i ci ci
11) The U.S. dollar has been the focal point of currency trading since the 1940s. As a result,
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most of the world's currencies are quoted against the dollar.
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Answer: TRUEDiff ci ic
:1
ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
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AACSB: Application of knowledge c i ci ci
12) Several of the world's major currency exchange rates follow a specific quotation convention
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that is the result of tradition and history. The exchange rate between the U.S. dollar and the euro
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is always quoted as "dollars per euro."
ci ci ci ci ci ci
Answer: TRUEDiff ci ic
:1
ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
ci
AACSB: Application of knowledge c i ci ci
3
Copyright © 2023 Pearson Education, Inc. ci ci ci ci ci
,https://browsegrades.net/singlePaper/416756/testbank-and-solution-manua-for-multinational-bu
Multinational Business Finance, 16e (Eiteman/Stonehill/Moffett)
ci ci ci ci
Chapter 1 Multinational Financial Management: Opportunities and Challenges
ci ci ci ci ci ci
1.1 The Global Financial Marketplace
ci ci ci
1) Financial globalization has NOT resulted in:
ci ci ci ci ci
A) continuing imbalances of balance of payments.ci ci ci ci ci
B) an increase in quantity and speed in the flow of capital across the world.
ci ci ci ci ci ci ci ci ci ci ci ci ci
C) capital markets less open and a decrease in the availability of capital for many organizations.
ci ci ci ci ci ci ci ci ci ci ci ci ci ci
D) uniform ways of ownership, control, and governance across the world.
ci ci ci ci ci ci ci ci ci ic
Answer: D ci
Diff: 1
ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
ci
AACSB: Application of knowledge
c i ci ci
2) Financial globalization has NOT resulted in:
ci ci ci ci ci
A) continuing imbalances of balance of payments.ci ci ci ci ci
B) an increase in quantity and speed in the flow of capital across the world.
ci ci ci ci ci ci ci ci ci ci ci ci ci
C) capital markets more open and an increase in the availability of capital for many
ci ci ci ci ci ci ci ci ci ci ci ci ci ic
organizations.
D) an increase in the flow of capital into and out of industrialized markets.
ci ci ci ci ci ci ci ci ci ci ci ci ic
Answer: C ci
Diff: 1
ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
ci
AACSB: Application of knowledge
c i ci ci
3) The institutions of global finance are:
ci ci ci ci ci
A) central banks. ci
B) commercial banks. ci
C) investment banks. ci
D) All of the above are institutions of global finance.
ci ci ci ci ci ci ci ci ic
Answer: D ci
Diff: 1
ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
ci
AACSB: Application of knowledge
c i ci ci
1
Copyright © 2023 Pearson Education, Inc. ci ci ci ci ci
,https://browsegrades.net/singlePaper/416756/testbank-and-solution-manua-for-multinational-bu
4) A major cost avoided in the eurocurrency markets is the payment of deposit insurance fees,
ci ci ci ci ci ci ci ci ci ci ci ci ci ci ic
such as: ci
A) Federal Deposit Insurance Corporation — FDIC.
ci ci ci ci ci
B) Office of the Comptroller of the Currency — OCC.
ci ci ci ci ci ci ci ci
C) International Monetary Fund — IMF. ci ci ci ci
D) World Bank — ci ci
WB.Answer: A
ci ic ci
Diff: 2 ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
ci
AACSB: Application of knowledge c i ci ci
5) The modern eurocurrency market was born shortly after:
ci ci ci ci ci ci ci
A) World War II. ci ci
B) World War I. ci ci
C) Korean War. ci
D) Bosnian War. ci ic
Answer: A Dif cicic i ci
f: 1 ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
ci
AACSB: Application of knowledge c i ci ci
6) The reference rate of interest in the eurocurrency market is the:
ci ci ci ci ci ci ci ci ci ci
A) London Interbank Offered Rate. ci ci ci
B) Prima rate. ci
C) Federal funds rate. ci ci
D) Treasury rate. ci ic
Answer: A Dif cicic i ci
f: 1 ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
ci
AACSB: Application of knowledge c i ci ci
7) Interest spreads in the eurocurrency market are small for many reasons EXCEPT:
ci ci ci ci ci ci ci ci ci ci ci
A) Eurocurrency loans are secured loans. ci ci ci ci
B) Eurocurrency deposits and loans are made in amounts of $500,000 or more on an unsecured
ci ci ci ci ci ci ci ci ci ci ci ci ci ci ic
basis.
C) The eurocurrency is a wholesale market.
ci ci ci ci ci
D) Borrowers are usually large corporations or government entities.
ci ci ci ci ci ci ci ic
Answer: A ci
Diff: 2 ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
ci
AACSB: Application of knowledge c i ci ci
2
Copyright © 2023 Pearson Education, Inc. ci ci ci ci ci
, https://browsegrades.net/singlePaper/416756/testbank-and-solution-manua-for-multinational-bu
8) Multinational enterprises (MNEs) are firms, both for-profit companies and not-for-
ci ci ci ci ci ci ci ci ci
profit organizations, that have operations in more than one country, and conduct their business th
ci ci ci ci ci ci ci ci ci ci ci ci ci ci
roughforeign subsidiaries, branches, or joint ventures with host country firms.
ic ci ci ci ci ci ci ci ci ci
Answer: TRUEDiff ci ic
:1
ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
ci
AACSB: Application of knowledge c i ci ci
9) Ownership, control, and governance changes radically across the world. The publicly traded
ci ci ci ci ci ci ci ci ci ci ci ic
company is not the dominant global business organization—the privately held or family-
ci ci ci ci ci ci ci ci ci ci ci
ownedbusiness is the prevalent structure—
ic ci ci ci ci
and their goals and measures of performance differ dramatically.
ci ci ci ci ci ci ci ci
Answer: TRUEDiff ci ic
:1
ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
ci
AACSB: Application of knowledge c i ci ci
10) The securities at the heart of the global capital markets are the Mortgage Backed Securities
ci ci ci ci ci ci ci ci ci ci ci ci ci ci ic
(MBS). The health and security of the global financial system rely on the quality of these secur
ci ci ci ci ci ci ci ci ci ci ci ci ci ci ci ci
ities.
Answer: FALSEDi ci ic
ff: 1 ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
ci
AACSB: Application of knowledge c i ci ci
11) The U.S. dollar has been the focal point of currency trading since the 1940s. As a result,
ci ci ci ci ci ci ci ci ci ci ci ci ci ci ci ci ic
most of the world's currencies are quoted against the dollar.
ci ci ci ci ci ci ci ci ci
Answer: TRUEDiff ci ic
:1
ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
ci
AACSB: Application of knowledge c i ci ci
12) Several of the world's major currency exchange rates follow a specific quotation convention
ci ci ci ci ci ci ci ci ci ci ci ci ic
that is the result of tradition and history. The exchange rate between the U.S. dollar and the euro
ci ci ci ci ci ci ci ci ci ci ci ci ci ci ci ci ci ic
is always quoted as "dollars per euro."
ci ci ci ci ci ci
Answer: TRUEDiff ci ic
:1
ci
L.O.: 1.1 The Global Financial MarketplaceSkill
ci ci ci ci ci ic
: Recognition
ci
AACSB: Application of knowledge c i ci ci
3
Copyright © 2023 Pearson Education, Inc. ci ci ci ci ci
