Test Bank for Multinational Business Finance
16th Edition By (Eiteman/Stonehill/Moffett), All 18
Chapters Covered
,TABLE OF CONTENTS
PART I: GLOBAL FINANCIAL ENVIRONMENT
1. Multinational Financial Management: Challenges and Opportunities
2. International Monetary System
3. The Balance of Payments
4. Financial Goals, Corporate Governance and the Market for Corporate Control
PART II: FOREIGN EXCHANGE THEORY & MARKETS
5. The Foreign Exchange Market
6. International Parity Conditions
• Appendix: An Algebraic Primer to International Parity Conditions
7. Foreign Currency Derivatives: Futures & Options
• Appendix: Currency Option Pricing Theory
8. Interest Rate Risk and Swaps
9. Foreign Exchange Rate Determination & Intervention
PART III: FOREIGN EXCHANGE EXPOSURE
10.Transaction Exposure
• Appendix A: Complex Option Hedges
• Appendix B: The Optimal Hedge Ratio and Hedge Effectiveness
11.Translation Exposure
12.Operating Exposure
PART IV: FINANCING THE GLOBAL FIRM
13.Global Cost and Availability of Capital
14.Funding the Multinational Firm
15.Multinational Tax Management
16.International Trade Finance
PART V: FOREIGN INVESTMENTS AND INVESTMENT ANALYSIS
17.Foreign Direct Investment & Political Risk
18.Multinational Capital Budgeting & Cross-Border Acquisitions
,Multinational Business Finance, 16e (Eiteman/Stonehill/Moffett)
Chapter 1 Multinational Financial Management: Opportunities
and Challenges
1.1 The Global Financial Marketplace
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. Answer: D
Diff: 1
L.O.: 1.1 The Global Financial Marketplace
Skill: Recognition
AACSB: Application of knowledge
2) 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 more open and an increase in the availability of capital for
many organizations.
D) an increase in the flow of capital into and out of industrialized
markets. Answer: C
Diff: 1
L.O.: 1.1 The Global Financial Marketplace
Skill: Recognition
AACSB: Application of knowledge
3) The institutions of global finance are:
A) central banks.
B) commercial banks.
C) investment banks.
D) All of the above are institutions of global
finance. Answer: D
Diff: 1
L.O.: 1.1 The Global Financial Marketplace
Skill: Recognition
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.
Answer: A
Diff: 2
L.O.: 1.1 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. Answer:
A Diff: 1
L.O.: 1.1 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. Answer:
A Diff: 1
L.O.: 1.1 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. Answer: A
Diff: 2
L.O.: 1.1 The Global Financial Marketplace
Skill: Recognition
AACSB: Application of knowledge
16th Edition By (Eiteman/Stonehill/Moffett), All 18
Chapters Covered
,TABLE OF CONTENTS
PART I: GLOBAL FINANCIAL ENVIRONMENT
1. Multinational Financial Management: Challenges and Opportunities
2. International Monetary System
3. The Balance of Payments
4. Financial Goals, Corporate Governance and the Market for Corporate Control
PART II: FOREIGN EXCHANGE THEORY & MARKETS
5. The Foreign Exchange Market
6. International Parity Conditions
• Appendix: An Algebraic Primer to International Parity Conditions
7. Foreign Currency Derivatives: Futures & Options
• Appendix: Currency Option Pricing Theory
8. Interest Rate Risk and Swaps
9. Foreign Exchange Rate Determination & Intervention
PART III: FOREIGN EXCHANGE EXPOSURE
10.Transaction Exposure
• Appendix A: Complex Option Hedges
• Appendix B: The Optimal Hedge Ratio and Hedge Effectiveness
11.Translation Exposure
12.Operating Exposure
PART IV: FINANCING THE GLOBAL FIRM
13.Global Cost and Availability of Capital
14.Funding the Multinational Firm
15.Multinational Tax Management
16.International Trade Finance
PART V: FOREIGN INVESTMENTS AND INVESTMENT ANALYSIS
17.Foreign Direct Investment & Political Risk
18.Multinational Capital Budgeting & Cross-Border Acquisitions
,Multinational Business Finance, 16e (Eiteman/Stonehill/Moffett)
Chapter 1 Multinational Financial Management: Opportunities
and Challenges
1.1 The Global Financial Marketplace
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. Answer: D
Diff: 1
L.O.: 1.1 The Global Financial Marketplace
Skill: Recognition
AACSB: Application of knowledge
2) 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 more open and an increase in the availability of capital for
many organizations.
D) an increase in the flow of capital into and out of industrialized
markets. Answer: C
Diff: 1
L.O.: 1.1 The Global Financial Marketplace
Skill: Recognition
AACSB: Application of knowledge
3) The institutions of global finance are:
A) central banks.
B) commercial banks.
C) investment banks.
D) All of the above are institutions of global
finance. Answer: D
Diff: 1
L.O.: 1.1 The Global Financial Marketplace
Skill: Recognition
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.
Answer: A
Diff: 2
L.O.: 1.1 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. Answer:
A Diff: 1
L.O.: 1.1 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. Answer:
A Diff: 1
L.O.: 1.1 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. Answer: A
Diff: 2
L.O.: 1.1 The Global Financial Marketplace
Skill: Recognition
AACSB: Application of knowledge
