Test Bank for Multinational Business Finance 15

Created By: Solutions Stuvia

1

Test Bank for Multinational Business Finance 15 th Edition by Eiteman, Stonehill and Moffett

Chapter 1 Multinational Financial Management: Opportunities and Challenges

1.1 The Global Financial Marketplace

1) Financial globalization has NOT resulted in:

• continuing imbalances of balance of payments.
• an increase in quantity and speed in the flow of capital across the world.
• capital markets less open and a decrease in the availability of capital for many

organizations.

• 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:

• continuing imbalances of balance of payments.
• an increase in quantity and speed in the flow of capital across the world.
• capital markets more open and an increase in the availability of capital for many

organizations.

• an increase in the flow of capital into and out of industrialized markets. Answer: C 1 / 4

Created By: Solutions Stuvia

2

Diff: 1

L.O.: 1.1 The Global Financial Marketplace Skill: Recognition

AACSB: Application of knowledge

3) The institutions of global finance are:

• central banks.
• commercial banks.
• 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 well-established, large U.S.-based MNE will probably NOT be able to overcome which of the following obstacles to maximizing firm value?

• an open marketplace
• high-quality strategic management
• access to capital

D) none of the above Answer: D

Diff: 1

L.O.: 1.1 The Global Financial Marketplace Skill: Conceptual

AACSB: Application of knowledge

• / 4

Created By: Solutions Stuvia

3

5) A well-established, large, China-based MNE will probably be most adversely affected by which of the following elements of firm value?

• an open marketplace
• high-quality strategic management
• access to capital

D) access to qualified labor pool Answer: A

Diff: 2

L.O.: 1.1 The Global Financial Marketplace Skill: Conceptual

AACSB: Application of knowledge

6) A well-established, large, Brazil-based MNE will probably be most adversely affected by which of the following elements of firm value?

• an open marketplace
• high-quality strategic management
• access to capital

D) access to qualified labor pool Answer: C

Diff: 2

L.O.: 1.1 The Global Financial Marketplace Skill: Conceptual

AACSB: Application of knowledge

7) A major cost avoided in the eurocurrency markets is the payment of deposit insurance

fees, such as:

• Federal Deposit Insurance Corporation — FDIC.
• Office of the Comptroller of the Currency — OCC. 3 / 4

Created By: Solutions Stuvia

4

• International Monetary Fund — IMF.
• World Bank — WB.

Answer: A

Diff: 2

L.O.: 1.1 The Global Financial Marketplace Skill: Recognition

AACSB: Application of knowledge

8) The modern eurocurrency market was born shortly after:

• World War II.
• World War I.
• Korean War.
• Bosnian War. Answer: A Diff: 1

L.O.: 1.1 The Global Financial Marketplace Skill: Recognition

AACSB: Application of knowledge

9) The reference rate of interest in the eurocurrency market is the:

• London Interbank Offered Rate.
• Prima rate.
• Federal funds rate.
• Treasury rate.

Answer: A

Diff: 1

L.O.: 1.1 The Global Financial Marketplace Skill: Recognition

• / 4