1
Copyright © 2023 Pearson Education, In
+z +z +z +z +z
c.
,Multinational Business Finance, 16e (Eiteman/Stonehill/Moffett)
+z +z +z +z
Chapter 1 Multinational Financial Management: Opportunities and Challenges
+z +z +z +z +z +z
1.1 The Global Financial Marketplace
+z +z +z
1) Financial globalization has NOT resulted in:
+z +z +z +z +z
A) continuing imbalances of balance of payments.
+z +z +z +z +z
B) an increase in quantity and speed in the flow of capital across the world.
+z +z +z +z +z +z +z +z +z +z +z +z +z
C) capital markets less open and a decrease in the availability of capital for many organizations.
+z +z +z +z +z +z +z +z +z +z +z +z +z +z
D) uniform ways of ownership, control, and governance across the worl
+z +z +z +z +z +z +z +z +z
d.Answer: D
+
z +z
Diff: 1 +z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge
+ z +z +z
2) Financial globalization has NOT resulted in:
+z +z +z +z +z
A) continuing imbalances of balance of payments.
+z +z +z +z +z
B) an increase in quantity and speed in the flow of capital across the world.
+z +z +z +z +z +z +z +z +z +z +z +z +z
C) capital markets more open and an increase in the availability of capital for ma
+z +z +z +z +z +z +z +z +z +z +z +z +z
nyorganizations.
+
z
D) an increase in the flow of capital into and out of industrialized mark
+z +z +z +z +z +z +z +z +z +z +z +z
ets.Answer: C
+
z +z
Diff: 1 +z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge
+ z +z +z
3) The institutions of global finance are:
+z +z +z +z +z
A) central banks. +z
B) commercial banks. +z
C) investment banks. +z
D) All of the above are institutions of global financ
+z +z +z +z +z +z +z +z
e.Answer: D
+
z +z
Diff: 1 +z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge
+ z +z +z
2
Copyright © 2023 Pearson Education, In +z +z +z +z +z
c.
,4) A major cost avoided in the eurocurrency markets is the payment of deposit insurance f
+z +z +z +z +z +z +z +z +z +z +z +z +z +z
ees,such as: +
z +z
A) Federal Deposit Insurance Corporation — FDIC.+z +z +z +z +z
B) Office of the Comptroller of the Currency — OCC.
+z +z +z +z +z +z +z +z
C) International Monetary Fund — IMF. +z +z +z +z
D) World Bank — +z +z
WB.Answer: A
+z +
z +z
Diff: 2 +z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge + z +z +z
5) The modern eurocurrency market was born shortly after:
+z +z +z +z +z +z +z
A) World War II. +z +z
B) World War I. +z +z
C) Korean War. +z
D) Bosnian War. +z +
z
Answer: A Di +z+z+ z +z
ff: 1 +z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge + z +z +z
6) The reference rate of interest in the eurocurrency market is the:
+z +z +z +z +z +z +z +z +z +z
A) London Interbank Offered Rate. +z +z +z
B) Prima rate. +z
C) Federal funds rate. +z +z
D) Treasury rate +z
.Answer: A Di
+
z +z+z+ z +z
ff: 1 +z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge + z +z +z
7) Interest spreads in the eurocurrency market are small for many reasons EXCEPT:
+z +z +z +z +z +z +z +z +z +z +z
A) Eurocurrency loans are secured loans. +z +z +z +z
B) Eurocurrency deposits and loans are made in amounts of $500,000 or more on an unsecu
+z +z +z +z +z +z +z +z +z +z +z +z +z +z
redbasis. +
z
C) The eurocurrency is a wholesale market.
+z +z +z +z +z
D) Borrowers are usually large corporations or government entitie
+z +z +z +z +z +z +z
s.Answer: A
+
z +z
Diff: 2 +z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge + z +z +z
3
Copyright © 2023 Pearson Education, In
+z +z +z +z +z
c.
, 8) Multinational enterprises (MNEs) are firms, both for-profit companies and not-for-
+z +z +z +z +z +z +z +z +z
profit organizations, that have operations in more than one country, and conduct their busines
+z +z +z +z +z +z +z +z +z +z +z +z +z
s throughforeign subsidiaries, branches, or joint ventures with host country firms.
+z +
z +z +z +z +z +z +z +z +z +z
Answer: TRUEDif +z +
z
f: 1
+z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge+ z +z +z
9) Ownership, control, and governance changes radically across the world. The publicly trad
+z +z +z +z +z +z +z +z +z +z +z
edcompany is not the dominant global business organization—the privately held or family-
+
z +z +z +z +z +z +z +z +z +z +z +z
ownedbusiness is the prevalent structure—
+
z +z +z +z +z
and their goals and measures of performance differ dramatically.
+z +z +z +z +z +z +z +z
Answer: TRUEDif +z +
z
f: 1
+z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge+ z +z +z
10) The securities at the heart of the global capital markets are the Mortgage Backed Securit
+z +z +z +z +z +z +z +z +z +z +z +z +z +z
ies(MBS). The health and security of the global financial system rely on the quality of thes
+
z +z +z +z +z +z +z +z +z +z +z +z +z +z +z +z
e securities.
+z
Answer: FALSEDi +z +
z
ff: 1 +z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge+ z +z +z
11) The U.S. dollar has been the focal point of currency trading since the 1940s. As a res
+z +z +z +z +z +z +z +z +z +z +z +z +z +z +z +z
ult,most of the world's currencies are quoted against the dollar.
+
z +z +z +z +z +z +z +z +z +z
Answer: TRUEDif +z +
z
f: 1
+z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge+ z +z +z
12) Several of the world's major currency exchange rates follow a specific quotation conventi
+z +z +z +z +z +z +z +z +z +z +z +z
onthat is the result of tradition and history. The exchange rate between the U.S. dollar and th
+
z +z +z +z +z +z +z +z +z +z +z +z +z +z +z +z +z
e eurois always quoted as "dollars per euro."
+z +
z +z +z +z +z +z +z
Answer: TRUEDif +z +
z
f: 1
+z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge+ z +z +z
4
Copyright © 2023 Pearson Education, In
+z +z +z +z +z
c.
Copyright © 2023 Pearson Education, In
+z +z +z +z +z
c.
,Multinational Business Finance, 16e (Eiteman/Stonehill/Moffett)
+z +z +z +z
Chapter 1 Multinational Financial Management: Opportunities and Challenges
+z +z +z +z +z +z
1.1 The Global Financial Marketplace
+z +z +z
1) Financial globalization has NOT resulted in:
+z +z +z +z +z
A) continuing imbalances of balance of payments.
+z +z +z +z +z
B) an increase in quantity and speed in the flow of capital across the world.
+z +z +z +z +z +z +z +z +z +z +z +z +z
C) capital markets less open and a decrease in the availability of capital for many organizations.
+z +z +z +z +z +z +z +z +z +z +z +z +z +z
D) uniform ways of ownership, control, and governance across the worl
+z +z +z +z +z +z +z +z +z
d.Answer: D
+
z +z
Diff: 1 +z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge
+ z +z +z
2) Financial globalization has NOT resulted in:
+z +z +z +z +z
A) continuing imbalances of balance of payments.
+z +z +z +z +z
B) an increase in quantity and speed in the flow of capital across the world.
+z +z +z +z +z +z +z +z +z +z +z +z +z
C) capital markets more open and an increase in the availability of capital for ma
+z +z +z +z +z +z +z +z +z +z +z +z +z
nyorganizations.
+
z
D) an increase in the flow of capital into and out of industrialized mark
+z +z +z +z +z +z +z +z +z +z +z +z
ets.Answer: C
+
z +z
Diff: 1 +z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge
+ z +z +z
3) The institutions of global finance are:
+z +z +z +z +z
A) central banks. +z
B) commercial banks. +z
C) investment banks. +z
D) All of the above are institutions of global financ
+z +z +z +z +z +z +z +z
e.Answer: D
+
z +z
Diff: 1 +z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge
+ z +z +z
2
Copyright © 2023 Pearson Education, In +z +z +z +z +z
c.
,4) A major cost avoided in the eurocurrency markets is the payment of deposit insurance f
+z +z +z +z +z +z +z +z +z +z +z +z +z +z
ees,such as: +
z +z
A) Federal Deposit Insurance Corporation — FDIC.+z +z +z +z +z
B) Office of the Comptroller of the Currency — OCC.
+z +z +z +z +z +z +z +z
C) International Monetary Fund — IMF. +z +z +z +z
D) World Bank — +z +z
WB.Answer: A
+z +
z +z
Diff: 2 +z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge + z +z +z
5) The modern eurocurrency market was born shortly after:
+z +z +z +z +z +z +z
A) World War II. +z +z
B) World War I. +z +z
C) Korean War. +z
D) Bosnian War. +z +
z
Answer: A Di +z+z+ z +z
ff: 1 +z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge + z +z +z
6) The reference rate of interest in the eurocurrency market is the:
+z +z +z +z +z +z +z +z +z +z
A) London Interbank Offered Rate. +z +z +z
B) Prima rate. +z
C) Federal funds rate. +z +z
D) Treasury rate +z
.Answer: A Di
+
z +z+z+ z +z
ff: 1 +z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge + z +z +z
7) Interest spreads in the eurocurrency market are small for many reasons EXCEPT:
+z +z +z +z +z +z +z +z +z +z +z
A) Eurocurrency loans are secured loans. +z +z +z +z
B) Eurocurrency deposits and loans are made in amounts of $500,000 or more on an unsecu
+z +z +z +z +z +z +z +z +z +z +z +z +z +z
redbasis. +
z
C) The eurocurrency is a wholesale market.
+z +z +z +z +z
D) Borrowers are usually large corporations or government entitie
+z +z +z +z +z +z +z
s.Answer: A
+
z +z
Diff: 2 +z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge + z +z +z
3
Copyright © 2023 Pearson Education, In
+z +z +z +z +z
c.
, 8) Multinational enterprises (MNEs) are firms, both for-profit companies and not-for-
+z +z +z +z +z +z +z +z +z
profit organizations, that have operations in more than one country, and conduct their busines
+z +z +z +z +z +z +z +z +z +z +z +z +z
s throughforeign subsidiaries, branches, or joint ventures with host country firms.
+z +
z +z +z +z +z +z +z +z +z +z
Answer: TRUEDif +z +
z
f: 1
+z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge+ z +z +z
9) Ownership, control, and governance changes radically across the world. The publicly trad
+z +z +z +z +z +z +z +z +z +z +z
edcompany is not the dominant global business organization—the privately held or family-
+
z +z +z +z +z +z +z +z +z +z +z +z
ownedbusiness is the prevalent structure—
+
z +z +z +z +z
and their goals and measures of performance differ dramatically.
+z +z +z +z +z +z +z +z
Answer: TRUEDif +z +
z
f: 1
+z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge+ z +z +z
10) The securities at the heart of the global capital markets are the Mortgage Backed Securit
+z +z +z +z +z +z +z +z +z +z +z +z +z +z
ies(MBS). The health and security of the global financial system rely on the quality of thes
+
z +z +z +z +z +z +z +z +z +z +z +z +z +z +z +z
e securities.
+z
Answer: FALSEDi +z +
z
ff: 1 +z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge+ z +z +z
11) The U.S. dollar has been the focal point of currency trading since the 1940s. As a res
+z +z +z +z +z +z +z +z +z +z +z +z +z +z +z +z
ult,most of the world's currencies are quoted against the dollar.
+
z +z +z +z +z +z +z +z +z +z
Answer: TRUEDif +z +
z
f: 1
+z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge+ z +z +z
12) Several of the world's major currency exchange rates follow a specific quotation conventi
+z +z +z +z +z +z +z +z +z +z +z +z
onthat is the result of tradition and history. The exchange rate between the U.S. dollar and th
+
z +z +z +z +z +z +z +z +z +z +z +z +z +z +z +z +z
e eurois always quoted as "dollars per euro."
+z +
z +z +z +z +z +z +z
Answer: TRUEDif +z +
z
f: 1
+z
L.O.: 1.1 The Global Financial MarketplaceSki
+z +z +z +z +z +
z
ll: Recognition
+z
AACSB: Application of knowledge+ z +z +z
4
Copyright © 2023 Pearson Education, In
+z +z +z +z +z
c.
