TEST |BANK |for |International |Financial |Management |9th |Edition |by |Cheol |Eun, |Bruce |Resnick |and
|Tuugi
Chuluun.
TEST BANK for International Financial
Management 9th Edition by Cheol Eun, Bruce
Resnick and Tuugi Chuluun. ISBN-13:
9781260013870
Test |Bank Page |1
, TEST |BANK |for |International |Financial |Management |9th |Edition |by |Cheol |Eun, |Bruce |Resnick |and
|Tuugi
Chuluun.
MULTIPLE |CHOICE |- |Choose |the |one |alternative |that |best |completes |the |statement |or
| answers |the |question.
1) What |major |dimension |sets |apart |international |finance |from |domestic |finance?
A) Foreign |exchange |and |political |risks
B) Market |imperfections
C) Expanded |opportunity |set
D) all |of |the |options
2) An |example(s) |of |a |political |risk |is
A) expropriation |of |assets.
B) adverse |change |in |tax |rules.
C) the |opposition |party |being |elected.
D) both |the |expropriation |of |assets |and |adverse |changes |in |tax |rules |are |correct.
3) Production |of |goods |and |services |has |become |globalized |to |a |large |extent |as |a |result |of
A) natural |resources |being |depleted |in |one |country |after |another.
B) skilled |labor |being |highly |mobile.
C) multinational |corporations' |efforts |to |source |inputs |and |locate |production |anywhere
where |costs |are |lower |and |profits |higher.
|
D) common |tastes |worldwide |for |the |same |goods |and |services.
4) Recently, |financial |markets |have |become |highly |integrated. |This |development
Test |Bank Page |2
, TEST |BANK |for |International |Financial |Management |9th |Edition |by |Cheol |Eun, |Bruce |Resnick |and
|Tuugi
Chuluun.
A) allows |investors |to |diversify |their |portfolios |internationally.
B) allows |minority |investors |to |buy |and |sell |stocks.
C) has |increased |the |cost |of |capital |for |firms.
D) none |of |the |options
5) Japan |has |experienced |large |trade |surpluses. |Japanese |investors |have |responded |to |this |by
A) liquidating |their |positions |in |stocks |to |buy |dollar-denominated |bonds.
B) investing |heavily |in |U.S. |and |other |foreign |financial |markets.
C) lobbying |the |U.S. |government |to |depreciate |its |currency.
D) lobbying |the |Japanese |government |to |allow |the |yen |to |appreciate.
6) Suppose |your |firm |invests |$100,000 |in |a |project |in |Italy. |At |the |time |the |exchange |rate |is
$1.25 |= |€1.00. |One |year |later |the |exchange |rate |is |the |same, |but |the |Italian |government |has
expropriated |your |firm's |assets |paying |only |€80,000 |in |compensation. |This |is |an |example |of
|
A) exchange |rate |risk.
B) political |risk.
C) market |imperfections.
D) none |of |the |options, |since |$100,000 |= |€80,000 |× |$1.25/€1.00.
Test |Bank Page |3
, TEST |BANK |for |International |Financial |Management |9th |Edition |by |Cheol |Eun, |Bruce |Resnick |and
|Tuugi
Chuluun.
7) Suppose |you |start |with |$100 |and |buy |stock |for |£50 |when |the |exchange |rate |is |£1 |= |$2. |One
| year |later, |the |stock |rises |to |£60. |You |are |happy |with |your |20 |percent |return |on |the |stock, |but |when
| you |sell |the |stock |and |exchange |your |£60 |for |dollars, |you |only |get |$45 |since |the |pound |has |fallen |to
£1 |= |$0.75. |This |loss |of |value |is |an |example |of
|
A) exchange |rate |risk.
B) political |risk.
C) market |imperfections.
D) weakness |in |the |dollar.
8) Suppose |that |Great |Britain |is |a |major |export |market |for |your |firm, |a |U.S.-based |MNC. |If
the |British |pound |depreciates |against |the |U.S. |dollar,
|
A) your |firm |will |be |able |to |charge |more |in |dollar |terms |while |keeping |pound |prices
stable.
B) your |firm |may |be |priced |out |of |the |U.K. |market, |to |the |extent |that |your |dollar |costs
stay |constant |and |your |pound |prices |will |rise.
C) to |protect |U.K. |market |share, |your |firm |may |have |to |cut |the |dollar |price |of |your |goods |to
keep |the |pound |price |the |same.
|
D) your |firm |may |be |priced |out |of |the |U.K. |market, |to |the |extent |that |your |dollar |costs
stay |constant |and |your |pound |prices |will |rise, |and |to |protect |U.K. |market |share, |your |firm |may
|
have |to |cut |the |dollar |price |of |your |goods |to |keep |the |pound |price |the |same.
|
9) Suppose |Mexico |is |a |major |export |market |for |your |U.S.-based |company |and |the |Mexican
peso |appreciates |drastically |against |the |U.S. |dollar. |This |means
|
Test |Bank Page |4
|Tuugi
Chuluun.
TEST BANK for International Financial
Management 9th Edition by Cheol Eun, Bruce
Resnick and Tuugi Chuluun. ISBN-13:
9781260013870
Test |Bank Page |1
, TEST |BANK |for |International |Financial |Management |9th |Edition |by |Cheol |Eun, |Bruce |Resnick |and
|Tuugi
Chuluun.
MULTIPLE |CHOICE |- |Choose |the |one |alternative |that |best |completes |the |statement |or
| answers |the |question.
1) What |major |dimension |sets |apart |international |finance |from |domestic |finance?
A) Foreign |exchange |and |political |risks
B) Market |imperfections
C) Expanded |opportunity |set
D) all |of |the |options
2) An |example(s) |of |a |political |risk |is
A) expropriation |of |assets.
B) adverse |change |in |tax |rules.
C) the |opposition |party |being |elected.
D) both |the |expropriation |of |assets |and |adverse |changes |in |tax |rules |are |correct.
3) Production |of |goods |and |services |has |become |globalized |to |a |large |extent |as |a |result |of
A) natural |resources |being |depleted |in |one |country |after |another.
B) skilled |labor |being |highly |mobile.
C) multinational |corporations' |efforts |to |source |inputs |and |locate |production |anywhere
where |costs |are |lower |and |profits |higher.
|
D) common |tastes |worldwide |for |the |same |goods |and |services.
4) Recently, |financial |markets |have |become |highly |integrated. |This |development
Test |Bank Page |2
, TEST |BANK |for |International |Financial |Management |9th |Edition |by |Cheol |Eun, |Bruce |Resnick |and
|Tuugi
Chuluun.
A) allows |investors |to |diversify |their |portfolios |internationally.
B) allows |minority |investors |to |buy |and |sell |stocks.
C) has |increased |the |cost |of |capital |for |firms.
D) none |of |the |options
5) Japan |has |experienced |large |trade |surpluses. |Japanese |investors |have |responded |to |this |by
A) liquidating |their |positions |in |stocks |to |buy |dollar-denominated |bonds.
B) investing |heavily |in |U.S. |and |other |foreign |financial |markets.
C) lobbying |the |U.S. |government |to |depreciate |its |currency.
D) lobbying |the |Japanese |government |to |allow |the |yen |to |appreciate.
6) Suppose |your |firm |invests |$100,000 |in |a |project |in |Italy. |At |the |time |the |exchange |rate |is
$1.25 |= |€1.00. |One |year |later |the |exchange |rate |is |the |same, |but |the |Italian |government |has
expropriated |your |firm's |assets |paying |only |€80,000 |in |compensation. |This |is |an |example |of
|
A) exchange |rate |risk.
B) political |risk.
C) market |imperfections.
D) none |of |the |options, |since |$100,000 |= |€80,000 |× |$1.25/€1.00.
Test |Bank Page |3
, TEST |BANK |for |International |Financial |Management |9th |Edition |by |Cheol |Eun, |Bruce |Resnick |and
|Tuugi
Chuluun.
7) Suppose |you |start |with |$100 |and |buy |stock |for |£50 |when |the |exchange |rate |is |£1 |= |$2. |One
| year |later, |the |stock |rises |to |£60. |You |are |happy |with |your |20 |percent |return |on |the |stock, |but |when
| you |sell |the |stock |and |exchange |your |£60 |for |dollars, |you |only |get |$45 |since |the |pound |has |fallen |to
£1 |= |$0.75. |This |loss |of |value |is |an |example |of
|
A) exchange |rate |risk.
B) political |risk.
C) market |imperfections.
D) weakness |in |the |dollar.
8) Suppose |that |Great |Britain |is |a |major |export |market |for |your |firm, |a |U.S.-based |MNC. |If
the |British |pound |depreciates |against |the |U.S. |dollar,
|
A) your |firm |will |be |able |to |charge |more |in |dollar |terms |while |keeping |pound |prices
stable.
B) your |firm |may |be |priced |out |of |the |U.K. |market, |to |the |extent |that |your |dollar |costs
stay |constant |and |your |pound |prices |will |rise.
C) to |protect |U.K. |market |share, |your |firm |may |have |to |cut |the |dollar |price |of |your |goods |to
keep |the |pound |price |the |same.
|
D) your |firm |may |be |priced |out |of |the |U.K. |market, |to |the |extent |that |your |dollar |costs
stay |constant |and |your |pound |prices |will |rise, |and |to |protect |U.K. |market |share, |your |firm |may
|
have |to |cut |the |dollar |price |of |your |goods |to |keep |the |pound |price |the |same.
|
9) Suppose |Mexico |is |a |major |export |market |for |your |U.S.-based |company |and |the |Mexican
peso |appreciates |drastically |against |the |U.S. |dollar. |This |means
|
Test |Bank Page |4
