1
, Chapter 1 Globalization and the Multinational Firm
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1) What major dimension sets apart international finance from domestic finance?
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A) Foreign exchange and political risks
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B) Market imperfections hj
C) Expanded opportunity set hj hj
D) all of the
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h j options
hj Answer:
D
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
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2) An example of a political risk is
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A) expropriation of assets. hj hj
B) adverse change in tax rules. hj hj hj hj
C) the opposition party being elected.
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D) both the expropriation of assets and adverse changes in tax
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hj rules h j are correct. hj h j Answer: h j D
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
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3) Production of goods and services has become globalized to a large extent as a result of
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A) natural resources being depleted in one country after another.
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B) skilled labor being highly mobile.
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C) multinational corporations' efforts to source inputs and locate production anywhere where
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costs are lower and profits higher.
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D) common tastes worldwide for the same goods
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hj and h j services. h j Answer: h j C
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
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4) Recently, financial markets have become highly integrated. This development
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A) allows investors to diversify their portfolios internationally.
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2
,B) allows minority investors to buy and sell stocks.
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3
, C) has increased the cost of capital for firms.
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4
, Chapter 1 Globalization and the Multinational Firm
hj hj hj hj hj hj
1) What major dimension sets apart international finance from domestic finance?
hj hj hj hj hj hj hj hj hj
A) Foreign exchange and political risks
hj hj hj hj
B) Market imperfections hj
C) Expanded opportunity set hj hj
D) all of the
hj hj
h j options
hj Answer:
D
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
hj hj hj hj hj hj hj hj
2) An example of a political risk is
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A) expropriation of assets. hj hj
B) adverse change in tax rules. hj hj hj hj
C) the opposition party being elected.
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D) both the expropriation of assets and adverse changes in tax
hj hj hj hj hj hj hj hj hj
hj rules h j are correct. hj h j Answer: h j D
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
hj hj hj hj hj hj hj hj
3) Production of goods and services has become globalized to a large extent as a result of
hj hj hj hj hj hj hj hj hj hj hj hj hj hj hj
A) natural resources being depleted in one country after another.
hj hj hj hj hj hj hj hj
B) skilled labor being highly mobile.
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C) multinational corporations' efforts to source inputs and locate production anywhere where
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costs are lower and profits higher.
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D) common tastes worldwide for the same goods
hj hj hj hj hj hj
hj and h j services. h j Answer: h j C
Topic: What's Special about "International" Finance? Accessibility: Keyboard Navigation
hj hj hj hj hj hj hj hj
4) Recently, financial markets have become highly integrated. This development
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A) allows investors to diversify their portfolios internationally.
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2
,B) allows minority investors to buy and sell stocks.
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3
, C) has increased the cost of capital for firms.
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4
