IBUS 401 TEST 1
Current account _______ if currency *appreciates* relative to other
curriencies - ANSWERS-decreases
Factors affecting direct foreign investment (DFI) - ANSWERS--
changes in restrictions
-privatization
-potential economic growth
-tax rates
-exchange rates
for the MNC, agency costs are typically - ANSWERS-larger than
agency costs of a small purely domestic firm
which of the following industries would most likely take advantage of
lower costs in some less developed foreign countries
assembly line production
specialized professional services
nuclear missile planning
planning for more sophisticated computer technology - ANSWERS-
assembly line production
seller co has subsidiary in Mexico. the expected cash flows in pesos to
be received in the future from this subsidiary have not changed since
,last month, but the valuation of smaller co has declined since last
month. what could've caused this decline in value - ANSWERS-
depreciation of the mexican peso
a weak home currency may not be a perfect solution to correct a
balance of trade deficit because - ANSWERS-foreign companies may
reduce the prices of their products to stay competitive
without the international capital flows there would be ________
funding available in the US across all risk levels; and the cost of
funding would be _________ - ANSWERS-less; higher
an accord among 117 nations, called for lower tariffs around the
world - ANSWERS-General Agreement on tariffs and trade (GATT)
weakening of the US dollar with respect to the British pound would
likely reduce US exports to the UK and increase US imports from the
UK - ANSWERS-false
assume that a banks bid rate on Japanese yen is .0041 and its ask rate
is .0043 its bid-ask spread is - ANSWERS-about 4.65%
from 1944 to 1971 the exchange rate between any two currencies was
typically - ANSWERS-fixed within narrow boundaries
, a currency put option provides the right, but not the obligation to buy
a specific currency at a specific price within a specific period of time -
ANSWERS-false
futures contracts are sold on exchanges and are consequently _______
than forward contracts, which can be _______ to satisfy an MNCs
needs - ANSWERS-more standardized; custom-tailored
an MNCs short-term financing decisions are satisfied in the ________
market, while its medium debt financing decisions are satisfied in the
______ market - ANSWERS-international money; international credit
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) non of the above - ANSWERS-imperfect markets theory
TRUE/FALSE: Licensing is the process by which a firm provides its
technology (copyrights, patents, trademarks, or trade names) in
exchange for fees or some other specified benefits. - ANSWERS-True
TRUE/FALSE: The Sarbanes-Oxley Act (SOX) was enacted in 2002
required MNCs and other firms to implement an internal reporting
process that could be easily monitored by executives and the board of
directors. - ANSWERS-TRUE
Current account _______ if currency *appreciates* relative to other
curriencies - ANSWERS-decreases
Factors affecting direct foreign investment (DFI) - ANSWERS--
changes in restrictions
-privatization
-potential economic growth
-tax rates
-exchange rates
for the MNC, agency costs are typically - ANSWERS-larger than
agency costs of a small purely domestic firm
which of the following industries would most likely take advantage of
lower costs in some less developed foreign countries
assembly line production
specialized professional services
nuclear missile planning
planning for more sophisticated computer technology - ANSWERS-
assembly line production
seller co has subsidiary in Mexico. the expected cash flows in pesos to
be received in the future from this subsidiary have not changed since
,last month, but the valuation of smaller co has declined since last
month. what could've caused this decline in value - ANSWERS-
depreciation of the mexican peso
a weak home currency may not be a perfect solution to correct a
balance of trade deficit because - ANSWERS-foreign companies may
reduce the prices of their products to stay competitive
without the international capital flows there would be ________
funding available in the US across all risk levels; and the cost of
funding would be _________ - ANSWERS-less; higher
an accord among 117 nations, called for lower tariffs around the
world - ANSWERS-General Agreement on tariffs and trade (GATT)
weakening of the US dollar with respect to the British pound would
likely reduce US exports to the UK and increase US imports from the
UK - ANSWERS-false
assume that a banks bid rate on Japanese yen is .0041 and its ask rate
is .0043 its bid-ask spread is - ANSWERS-about 4.65%
from 1944 to 1971 the exchange rate between any two currencies was
typically - ANSWERS-fixed within narrow boundaries
, a currency put option provides the right, but not the obligation to buy
a specific currency at a specific price within a specific period of time -
ANSWERS-false
futures contracts are sold on exchanges and are consequently _______
than forward contracts, which can be _______ to satisfy an MNCs
needs - ANSWERS-more standardized; custom-tailored
an MNCs short-term financing decisions are satisfied in the ________
market, while its medium debt financing decisions are satisfied in the
______ market - ANSWERS-international money; international credit
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) non of the above - ANSWERS-imperfect markets theory
TRUE/FALSE: Licensing is the process by which a firm provides its
technology (copyrights, patents, trademarks, or trade names) in
exchange for fees or some other specified benefits. - ANSWERS-True
TRUE/FALSE: The Sarbanes-Oxley Act (SOX) was enacted in 2002
required MNCs and other firms to implement an internal reporting
process that could be easily monitored by executives and the board of
directors. - ANSWERS-TRUE
