TEST BANK FOR
International Financial Management
By: Jeff Madura
14th Edition
, TABLE OF CONTENT
Part I: THE INTERNATIONAL FINANCIAL ENVIRONMENT.
1. Multinational Financial Management: An Overview.
2. International Flow of Funds.
3. International Financial Markets.
4. Exchange Rate Determination.
5. Currency Derivatives.
Part II: EXCHANGE RATE BEHAVIOR.
6. Government Influence on Exchange Rates.
7. International Arbitrage and Interest Rate Parity.
8. Relationships among Inflation, Interest Rates, and Exchange Rates.
Part III: EXCHANGE RATE RISK MANAGEMENT.
9. Forecasting Exchange Rates.
10. Measuring Exposure to Exchange Rate Fluctuations.
11. Managing Transaction Exposure.
12. Managing Economic Exposure and Translation Exposure.
Part IV: LONG-TERM ASSET AND LIABILITY MANAGEMENT.
13. Direct Foreign Investment.
14. Multinational Capital Budgeting.
15. International Corporate Governance and Control.
16. Country Risk Analysis.
17. Multinational Capital Structure and Cost of Capital.
18. Long-Term Debt Financing.
Part V: SHORT-TERM ASSET AND LIABILITY MANAGEMENT.
19. Financing International Trade.
20. Short-Term Financing.
21. International Cash Management.
,Chapter 1—Multinational Financial Management
1. The Commonly Accepted Goal Of The MNC Is To:
A. Maximize Short-Term
Earnings.
B. Maximize Shareholder Wealth.
C. Minimize Risk.
D. A And C.
E. Maximize International Sales.
ANS: B PTS: 1
2. With Regard To Corporate Goals, An MNC Is Mostly Concerned With Maximizing , And A Purely Domestic Firm Is
Mostly Concerned With Maximizing .
A. Shareholder Wealth; Short-Term
Earnings
B. Shareholder Wealth; Shareholder
Wealth
C. Short-Term Earnings; Sales Volume
D. Short-Term Earnings; Shareholder
Wealth
ANS: B PTS: 1
3. For The MNC, Agency Costs Are Typically:
A. Non-Existent.
B. Larger Than Agency Costs Of A Small Purely Domestic
Firm.
C. Smaller Than Agency Costs Of A Small Purely Domestic
Firm.
D. The Same As Agency Costs Of A Small Purely Domestic
Firm.
ANS: B PTS: 1
4. Which Of The Following Could Reduce Agency Problems For An MNC?
A. Stock Options As Managerial Compensation.
B. Hostile Takeover Threat.
C. Investor Monitoring.
D. All Of The Above Are Forms Of Corporate Control That Could Reduce Agency Problems
For An
MNC.
ANS: D PTS: 1
5. The Valuation Of An MNC Should Rise When An Event Causes The Expected Cash Flows From Foreign To And When
Foreign Currencies Denominating These Cash Flows Are Expected To .
A. Decrease;
Appreciate
B. Increase; Appreciate
C. Decrease;
Depreciate
D. Increase; Depreciate
ANS: B PTS: 1
, 6. Which Of The Following Theories Identifies Specialization As A Reason For International Business?
A. Theory Of Comparative
Advantage.
B. Imperfect Markets Theory.
C. Product Cycle Theory.
D. None Of The Above
ANS: A PTS: 1
7. Which Of The Following Theories Identifies The Non-Transferability Of Resources As A Reason For International Business?
A. Theory Of Comparative
Advantage.
B. Imperfect Markets Theory.
C. Product Cycle Theory.
D. None Of The Above
ANS: B PTS: 1
8. Which Of The Following Theories Suggests That Firms Seek To Penetrate New Markets Over Time?
A. Theory Of Comparative
Advantage.
B. Imperfect Markets Theory.
C. Product Cycle Theory.
D. None Of The Above
ANS: C PTS: 1
9. Which Of The Following Industries Would Most Likely Take Advantage Of Lower Costs In Some Less Developed Foreign
Countries?
A. Assembly Line Production.
B. Specialized Professional Services.
C. Nuclear Missile Planning.
D. Planning For More Sophisticated Computer
Technology.
ANS: A PTS: 1
10. Due To The Risks Involved In International Business, Firms Should:
A. Only Consider International Business In Major Countries.
B. Maintain International Business To No More Than 20% Of Total
Business.
C. Maintain International Business To No More Than 35% Of Total
Business.
D. None Of The Above
ANS: D PTS: 1
11. A Product Cycle Is The Process By Which A Firm Provides A Specialized Sales Or Service Strategy, Support Assistance,
And Possibly An Initial Investment In The Franchise In Exchange For Periodic Fees.
a. True
b. False
ANS: F PTS: 1
International Financial Management
By: Jeff Madura
14th Edition
, TABLE OF CONTENT
Part I: THE INTERNATIONAL FINANCIAL ENVIRONMENT.
1. Multinational Financial Management: An Overview.
2. International Flow of Funds.
3. International Financial Markets.
4. Exchange Rate Determination.
5. Currency Derivatives.
Part II: EXCHANGE RATE BEHAVIOR.
6. Government Influence on Exchange Rates.
7. International Arbitrage and Interest Rate Parity.
8. Relationships among Inflation, Interest Rates, and Exchange Rates.
Part III: EXCHANGE RATE RISK MANAGEMENT.
9. Forecasting Exchange Rates.
10. Measuring Exposure to Exchange Rate Fluctuations.
11. Managing Transaction Exposure.
12. Managing Economic Exposure and Translation Exposure.
Part IV: LONG-TERM ASSET AND LIABILITY MANAGEMENT.
13. Direct Foreign Investment.
14. Multinational Capital Budgeting.
15. International Corporate Governance and Control.
16. Country Risk Analysis.
17. Multinational Capital Structure and Cost of Capital.
18. Long-Term Debt Financing.
Part V: SHORT-TERM ASSET AND LIABILITY MANAGEMENT.
19. Financing International Trade.
20. Short-Term Financing.
21. International Cash Management.
,Chapter 1—Multinational Financial Management
1. The Commonly Accepted Goal Of The MNC Is To:
A. Maximize Short-Term
Earnings.
B. Maximize Shareholder Wealth.
C. Minimize Risk.
D. A And C.
E. Maximize International Sales.
ANS: B PTS: 1
2. With Regard To Corporate Goals, An MNC Is Mostly Concerned With Maximizing , And A Purely Domestic Firm Is
Mostly Concerned With Maximizing .
A. Shareholder Wealth; Short-Term
Earnings
B. Shareholder Wealth; Shareholder
Wealth
C. Short-Term Earnings; Sales Volume
D. Short-Term Earnings; Shareholder
Wealth
ANS: B PTS: 1
3. For The MNC, Agency Costs Are Typically:
A. Non-Existent.
B. Larger Than Agency Costs Of A Small Purely Domestic
Firm.
C. Smaller Than Agency Costs Of A Small Purely Domestic
Firm.
D. The Same As Agency Costs Of A Small Purely Domestic
Firm.
ANS: B PTS: 1
4. Which Of The Following Could Reduce Agency Problems For An MNC?
A. Stock Options As Managerial Compensation.
B. Hostile Takeover Threat.
C. Investor Monitoring.
D. All Of The Above Are Forms Of Corporate Control That Could Reduce Agency Problems
For An
MNC.
ANS: D PTS: 1
5. The Valuation Of An MNC Should Rise When An Event Causes The Expected Cash Flows From Foreign To And When
Foreign Currencies Denominating These Cash Flows Are Expected To .
A. Decrease;
Appreciate
B. Increase; Appreciate
C. Decrease;
Depreciate
D. Increase; Depreciate
ANS: B PTS: 1
, 6. Which Of The Following Theories Identifies Specialization As A Reason For International Business?
A. Theory Of Comparative
Advantage.
B. Imperfect Markets Theory.
C. Product Cycle Theory.
D. None Of The Above
ANS: A PTS: 1
7. Which Of The Following Theories Identifies The Non-Transferability Of Resources As A Reason For International Business?
A. Theory Of Comparative
Advantage.
B. Imperfect Markets Theory.
C. Product Cycle Theory.
D. None Of The Above
ANS: B PTS: 1
8. Which Of The Following Theories Suggests That Firms Seek To Penetrate New Markets Over Time?
A. Theory Of Comparative
Advantage.
B. Imperfect Markets Theory.
C. Product Cycle Theory.
D. None Of The Above
ANS: C PTS: 1
9. Which Of The Following Industries Would Most Likely Take Advantage Of Lower Costs In Some Less Developed Foreign
Countries?
A. Assembly Line Production.
B. Specialized Professional Services.
C. Nuclear Missile Planning.
D. Planning For More Sophisticated Computer
Technology.
ANS: A PTS: 1
10. Due To The Risks Involved In International Business, Firms Should:
A. Only Consider International Business In Major Countries.
B. Maintain International Business To No More Than 20% Of Total
Business.
C. Maintain International Business To No More Than 35% Of Total
Business.
D. None Of The Above
ANS: D PTS: 1
11. A Product Cycle Is The Process By Which A Firm Provides A Specialized Sales Or Service Strategy, Support Assistance,
And Possibly An Initial Investment In The Franchise In Exchange For Periodic Fees.
a. True
b. False
ANS: F PTS: 1
