International Financial Management Cheol Eun 8th Editionth Edition

Test Bank For International Financial Management Cheol Eun 8th Edition

ISBN-10:125971778X , ISBN-13:978-1259717789

Chapter 1 Globalization and the Multinational Agency

1) What main dimension units aside worldwide finance from home finance?

A) International alternate and political dangers

B) Market imperfections

C) Expanded alternative set

D) all the choices

2) An instance of political threat is

A) expropriation of property.

B) antagonistic change in tax guidelines.

C) the opposition social gathering being elected.

D) each the expropriation of property and antagonistic adjustments in tax guidelines are appropriate.

3) Manufacturing of products and companies has turn into globalized to a big extent on account of

A) pure sources being depleted in a single nation after one other.

B) expert labor being extremely cellular.

C) multinational companies’ efforts to supply inputs and find manufacturing wherever the place prices are decrease and income greater.

D) frequent tastes worldwide for a similar items and companies.

4) Just lately, monetary markets have turn into extremely built-in. This improvement

A) permits traders to diversify their portfolios internationally.

B) permits minority traders to purchase and promote shares.

C) has elevated the price of capital for corporations.

D) not one of the choices

5) Japan has skilled massive commerce surpluses. Japanese traders have responded to this by

A) liquidating their positions in shares to purchase dollar-denominated bonds.

B) investing closely in U.S. and different overseas monetary markets.

C) lobbying the U.S. authorities to depreciate its forex.

D) lobbying the Japanese authorities to permit the yen to understand.

6) Suppose your agency invests $100,000 in a challenge in Italy. On the time the alternate fee is $1.25 = €1.00. One 12 months later the alternate fee is similar, however the Italian authorities has expropriated your agency’s property paying solely €80,000 in compensation. That is an instance of

A) alternate fee threat.

B) political threat.

C) market imperfections.

D) not one of the choices, since $100,000 = €80,000 × $1.25/€1.00.

7) Suppose you begin with $100 and purchase inventory for £50 when the alternate fee is £1 = $2. One 12 months later, the inventory rises to £60. You’re blissful along with your 20 % return on the inventory, however while you promote the inventory and alternate your £60 for {dollars}, you solely get $45 for the reason that pound has fallen to £1 = $0.75. This lack of worth is an instance of

A) alternate fee threat.

B) political threat.

C) market imperfections.

D) weak point within the greenback.

8) Suppose that Nice Britain is a serious export market to your agency, a U.S.-based MNC. If the British pound depreciates towards the U.S. greenback,

A) your agency will be capable of cost extra in greenback phrases whereas protecting pound costs secure.

B) your agency could also be priced out of the U.Ok. market, to the extent that your greenback prices keep fixed and your pound costs will rise.

C) to guard U.Ok. market share, your agency might have to chop the greenback worth of your items to maintain the pound worth the identical.

D) your agency could also be priced out of the U.Ok. market, to the extent that your greenback prices keep fixed and your pound costs will rise, and to guard U.Ok. market share, your agency might have to chop the greenback worth of your items to maintain the pound worth the identical.

9) Suppose Mexico is a serious export market to your U.S.-based firm and the Mexican peso appreciates drastically towards the U.S. greenback. This implies

A) your organization’s merchandise might be priced out of the Mexican market, because the peso worth of American imports will rise following the peso’s fall.

B) your agency will be capable of cost extra in greenback phrases whereas protecting peso costs secure.

C) your home opponents will get pleasure from a interval of dealing with lessened worth competitors from Mexican imports.

D) your agency will be capable of cost extra in greenback phrases whereas protecting peso costs secure and your home opponents will get pleasure from a interval of dealing with lessened worth competitors from Mexican imports.

10) Suppose Mexico is a serious export market to your U.S.-based firm and the Mexican peso depreciates drastically towards the U.S. greenback, because it did in December 1994. Because of this

A) your organization’s merchandise might be priced out of the Mexican market, because the peso worth of American imports will rise following the peso’s fall.

B) your agency will be capable of cost extra in greenback phrases whereas protecting peso costs secure.

C) your home opponents will get pleasure from a interval of dealing with little worth competitors from Mexican imports.

D) not one of the choices

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