https://browsegrades.net/singlePaper/416756/testbank-an
,https://browsegrades.net/singlePaper/416756/testbank-and-solution-manua-for-multinational-bu
Multinational Business Finance, 16e (Eiteman/Stonehill/Moffett)
n9 n9 n9 n9
Chapter 1 Multinational Financial Management: Opportunities and Challenges
n9 n9 n9 n9 n9 n9
1.1 The Global Financial Marketplace
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1) Financial globalization has NOT resulted in:
n9 n9 n9 n9 n9
A) continuing imbalances of balance of payments.n9 n9 n9 n9 n9
B) an increase in quantity and speed in the flow of capital across the world.
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
C) capital markets less open and a decrease in the availability of capital for many organizations.
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
D) uniform ways of ownership, control, and governance across the worl
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d. Answer: D
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Diff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge
n 9 n 9 n9 n9
2) Financial globalization has NOT resulted in:
n9 n9 n9 n9 n9
A) continuing imbalances of balance of payments.n9 n9 n9 n9 n9
B) an increase in quantity and speed in the flow of capital across the world.
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
C) capital markets more open and an increase in the availability of capital for ma
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
ny organizations.
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D) an increase in the flow of capital into and out of industrialized market
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s. Answer: C
n9 n 9
Diff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
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AACSB: Application of knowledge
n 9 n 9 n9 n9
3) The institutions of global finance are:
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A) central banks. n9
B) commercial banks. n9
C) investment banks. n9
D) All of the above are institutions of global financ
n9 n9 n9 n9 n9 n9 n9 n9
e. Answer: D
n9 n 9
Diff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge
n 9 n 9 n9 n9
1
Copyright © 2023 Pearson Education, In
n9 n9 n9 n9 n9
c.
,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 fe
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
es, such as:
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A) Federal Deposit Insurance Corporation — FDIC.
n9 n9 n9 n9 n9
B) Office of the Comptroller of the Currency — OCC.
n9 n9 n9 n9 n9 n9 n9 n9
C) International Monetary Fund — IMF. n9 n9 n9 n9
D) World Bank — n9 n9
WB. Answer: A
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Diff: 2 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge n 9 n 9 n9 n9
5) The modern eurocurrency market was born shortly after:
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A) World War II. n9 n9
B) World War I. n9 n9
C) Korean War. n9
D) Bosnian War. n9
Answer: A
n9 n 9 n 9
Diff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge n 9 n 9 n9 n9
6) The reference rate of interest in the eurocurrency market is the:
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
A) London Interbank Offered Rate. n9 n9 n9
B) Prima rate. n9
C) Federal funds rate. n9 n9
D) Treasury rate. n9
Answer: A D
n9 n 9 n 9
iff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge n 9 n 9 n9 n9
7) Interest spreads in the eurocurrency market are small for many reasons EXCEPT:
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
A) Eurocurrency loans are secured loans. n9 n9 n9 n9
B) Eurocurrency deposits and loans are made in amounts of $500,000 or more on an unsecur
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
ed basis.
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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
n9 n 9
Diff: 2 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge n 9 n 9 n9 n9
2
Copyright © 2023 Pearson Education, In
n9 n9 n9 n9 n9
c.
, 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-
n9 n9 n9 n9 n9 n9 n9 n9 n9
profit organizations, that have operations in more than one country, and conduct their business
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
through foreign subsidiaries, branches, or joint ventures with host country firms.
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
Answer: TRUE n 9 n9
Diff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge n 9 n 9 n9 n9
9) Ownership, control, and governance changes radically across the world. The publicly trad
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
ed company is not the dominant global business organization—the privately held or family-
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
owned business is the prevalent structure—
n9 n9 n9 n9 n9
and their goals and measures of performance differ dramatically.
n9 n9 n9 n9 n9 n9 n9 n9
Answer: TRUE n 9 n9
Diff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge n 9 n 9 n9 n9
10) The securities at the heart of the global capital markets are the Mortgage Backed Securiti
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
es (MBS). The health and security of the global financial system rely on the quality of thes
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
e securities.
n9
Answer: FALSE n 9 n9
Diff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge n 9 n 9 n9 n9
11) The U.S. dollar has been the focal point of currency trading since the 1940s. As a res
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
ult, most of the world's currencies are quoted against the dollar.
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
Answer: TRUE n 9 n9
Diff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge n 9 n 9 n9 n9
12) Several of the world's major currency exchange rates follow a specific quotation conventi
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
on that is the result of tradition and history. The exchange rate between the U.S. dollar and th
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
e euro is always quoted as "dollars per euro."
n9 n9 n9 n9 n9 n9 n9 n9
Answer: TRUE n 9 n9
Diff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge n 9 n 9 n9 n9
3
Copyright © 2023 Pearson Education, In
n9 n9 n9 n9 n9
c.
,https://browsegrades.net/singlePaper/416756/testbank-and-solution-manua-for-multinational-bu
Multinational Business Finance, 16e (Eiteman/Stonehill/Moffett)
n9 n9 n9 n9
Chapter 1 Multinational Financial Management: Opportunities and Challenges
n9 n9 n9 n9 n9 n9
1.1 The Global Financial Marketplace
n9 n9 n9
1) Financial globalization has NOT resulted in:
n9 n9 n9 n9 n9
A) continuing imbalances of balance of payments.n9 n9 n9 n9 n9
B) an increase in quantity and speed in the flow of capital across the world.
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
C) capital markets less open and a decrease in the availability of capital for many organizations.
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
D) uniform ways of ownership, control, and governance across the worl
n9 n9 n9 n9 n9 n9 n9 n9 n9
d. Answer: D
n9 n 9
Diff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge
n 9 n 9 n9 n9
2) Financial globalization has NOT resulted in:
n9 n9 n9 n9 n9
A) continuing imbalances of balance of payments.n9 n9 n9 n9 n9
B) an increase in quantity and speed in the flow of capital across the world.
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
C) capital markets more open and an increase in the availability of capital for ma
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
ny organizations.
n9
D) an increase in the flow of capital into and out of industrialized market
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
s. Answer: C
n9 n 9
Diff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge
n 9 n 9 n9 n9
3) The institutions of global finance are:
n9 n9 n9 n9 n9
A) central banks. n9
B) commercial banks. n9
C) investment banks. n9
D) All of the above are institutions of global financ
n9 n9 n9 n9 n9 n9 n9 n9
e. Answer: D
n9 n 9
Diff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge
n 9 n 9 n9 n9
1
Copyright © 2023 Pearson Education, In
n9 n9 n9 n9 n9
c.
,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 fe
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
es, such as:
n9 n9
A) Federal Deposit Insurance Corporation — FDIC.
n9 n9 n9 n9 n9
B) Office of the Comptroller of the Currency — OCC.
n9 n9 n9 n9 n9 n9 n9 n9
C) International Monetary Fund — IMF. n9 n9 n9 n9
D) World Bank — n9 n9
WB. Answer: A
n9 n9 n 9
Diff: 2 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge n 9 n 9 n9 n9
5) The modern eurocurrency market was born shortly after:
n9 n9 n9 n9 n9 n9 n9
A) World War II. n9 n9
B) World War I. n9 n9
C) Korean War. n9
D) Bosnian War. n9
Answer: A
n9 n 9 n 9
Diff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge n 9 n 9 n9 n9
6) The reference rate of interest in the eurocurrency market is the:
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
A) London Interbank Offered Rate. n9 n9 n9
B) Prima rate. n9
C) Federal funds rate. n9 n9
D) Treasury rate. n9
Answer: A D
n9 n 9 n 9
iff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge n 9 n 9 n9 n9
7) Interest spreads in the eurocurrency market are small for many reasons EXCEPT:
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
A) Eurocurrency loans are secured loans. n9 n9 n9 n9
B) Eurocurrency deposits and loans are made in amounts of $500,000 or more on an unsecur
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
ed basis.
n9
C) The eurocurrency is a wholesale market.
n9 n9 n9 n9 n9
D) Borrowers are usually large corporations or government entities
n9 n9 n9 n9 n9 n9 n9
. Answer: A
n9 n 9
Diff: 2 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge n 9 n 9 n9 n9
2
Copyright © 2023 Pearson Education, In
n9 n9 n9 n9 n9
c.
, 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-
n9 n9 n9 n9 n9 n9 n9 n9 n9
profit organizations, that have operations in more than one country, and conduct their business
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
through foreign subsidiaries, branches, or joint ventures with host country firms.
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
Answer: TRUE n 9 n9
Diff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge n 9 n 9 n9 n9
9) Ownership, control, and governance changes radically across the world. The publicly trad
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
ed company is not the dominant global business organization—the privately held or family-
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
owned business is the prevalent structure—
n9 n9 n9 n9 n9
and their goals and measures of performance differ dramatically.
n9 n9 n9 n9 n9 n9 n9 n9
Answer: TRUE n 9 n9
Diff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge n 9 n 9 n9 n9
10) The securities at the heart of the global capital markets are the Mortgage Backed Securiti
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
es (MBS). The health and security of the global financial system rely on the quality of thes
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
e securities.
n9
Answer: FALSE n 9 n9
Diff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge n 9 n 9 n9 n9
11) The U.S. dollar has been the focal point of currency trading since the 1940s. As a res
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
ult, most of the world's currencies are quoted against the dollar.
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
Answer: TRUE n 9 n9
Diff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge n 9 n 9 n9 n9
12) Several of the world's major currency exchange rates follow a specific quotation conventi
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
on that is the result of tradition and history. The exchange rate between the U.S. dollar and th
n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9 n9
e euro is always quoted as "dollars per euro."
n9 n9 n9 n9 n9 n9 n9 n9
Answer: TRUE n 9 n9
Diff: 1 n9
L.O.: 1.1 The Global Financial Marketplace Sk
n 9 n9 n9 n9 n9 n9
ill: Recognition
n 9
AACSB: Application of knowledge n 9 n 9 n9 n9
3
Copyright © 2023 Pearson Education, In
n9 n9 n9 n9 n9
c.
