Test Bank for Multinational Business Finance 16th Edition By (Eiteman-Stonehill-Moffett).

,Multinational kBusiness kFinance, k16e k(Eiteman/Stonehill/Moffett)
Chapter k1 Multinational kFinancial kManagement: kOpportunities kand kChallenges

1.1 The kGlobal kFinancial kMarketplace

1) Financial kglobalization khas kNOT kresulted kin:
A) continuing kimbalances kof kbalance kof kpayments.
B) an kincrease kin kquantity kand kspeed kin kthe kflow kof kcapital kacross kthe kworld.
C) capital kmarkets kless kopen kand ka kdecrease kin kthe kavailability kof kcapital kfor kmany
korganizations.
D) uniform kways kof kownership, kcontrol, kand kgovernance kacross kthe
kworld.kAnswer: k D
Diff: k1
L.O.: k1.1 kThe kGlobal kFinancial kMarketplace
kSkill: k Recognition
AACSB: k Application kof kknowledge

2) Financial kglobalization khas kNOT kresulted kin:
A) continuing kimbalances kof kbalance kof kpayments.
B) an kincrease kin kquantity kand kspeed kin kthe kflow kof kcapital kacross kthe kworld.
C) capital kmarkets kmore kopen kand kan kincrease kin kthe kavailability kof kcapital
kfor kmanykorganizations.
D) an kincrease kin kthe kflow kof kcapital kinto kand kout kof kindustrialized
kmarkets.kAnswer: k C
Diff: k1
L.O.: k1.1 kThe kGlobal kFinancial kMarketplace
kSkill: k Recognition
AACSB: k Application kof kknowledge

3) The kinstitutions kof kglobal kfinance kare:
A) central kbanks.
B) commercial kbanks.
C) investment kbanks.
D) All kof kthe kabove kare kinstitutions kof kglobal
kfinance.kAnswer: k D
Diff: k1
L.O.: k1.1 kThe kGlobal kFinancial kMarketplace
kSkill: k Recognition
AACSB: k Application kof kknowledge




1
Copyright k© k2023 kPearson kEducation,
kInc.

,4) A kmajor kcost kavoided kin kthe keurocurrency kmarkets kis kthe kpayment kof kdeposit
kinsurance kfees,ksuch kas:
A) Federal kDeposit kInsurance kCorporation k— kFDIC.
B) Office kof kthe kComptroller kof kthe kCurrency k— kOCC.
C) International kMonetary kFund k— kIMF.
D) World kBank k—
kWB.kAnswer: k A
Diff: k2
L.O.: k1.1 kThe kGlobal kFinancial kMarketplace
kSkill: k Recognition
AACSB: k Application kof kknowledge

5) The kmodern keurocurrency kmarket kwas kborn kshortly kafter:
A) World kWar kII.
B) World kWar kI.
C) Korean kWar.
D) Bosnian
kWar.kAnswer: k k
k A kDiff: k1
L.O.: k1.1 kThe kGlobal kFinancial kMarketplace
kSkill: k Recognition
AACSB: k Application kof kknowledge

6) The kreference krate kof kinterest kin kthe keurocurrency kmarket kis kthe:
A) London kInterbank kOffered kRate.
B) Prima krate.
C) Federal kfunds krate.
D) Treasury
krate.kAnswer: k k
k A kDiff: k1
L.O.: k1.1 kThe kGlobal kFinancial kMarketplace
kSkill: k Recognition
AACSB: k Application kof kknowledge

7) Interest kspreads kin kthe keurocurrency kmarket kare ksmall kfor kmany kreasons kEXCEPT:
A) Eurocurrency kloans kare ksecured kloans.
B) Eurocurrency kdeposits kand kloans kare kmade kin kamounts kof k$500,000 kor kmore kon kan
kunsecuredkbasis.
C) The keurocurrency kis ka kwholesale kmarket.
D) Borrowers kare kusually klarge kcorporations kor kgovernment
kentities.kAnswer: k A
Diff: k2
L.O.: k1.1 kThe kGlobal kFinancial kMarketplace
kSkill: k Recognition
AACSB: k Application kof kknowledge



2
Copyright k© k2023 kPearson kEducation,
kInc.

, 8) Multinational kenterprises k(MNEs) kare kfirms, kboth kfor-profit kcompanies kand knot-for-
profit korganizations, kthat khave koperations kin kmore kthan kone kcountry, kand kconduct ktheir
kbusiness kthroughkforeign ksubsidiaries, kbranches, kor kjoint kventures kwith khost kcountry kfirms.
Answer: kTRUE
kDiff: k1
L.O.: k1.1 kThe kGlobal kFinancial kMarketplace
kSkill: k Recognition
AACSB: k Application kof kknowledge

9) Ownership, kcontrol, kand kgovernance kchanges kradically kacross kthe kworld. kThe kpublicly
ktradedkcompany kis knot kthe kdominant kglobal kbusiness korganization—the kprivately kheld kor
kfamily-ownedkbusiness kis kthe kprevalent kstructure—and ktheir kgoals kand kmeasures kof
kperformance kdiffer kdramatically.
Answer: kTRUE
kDiff: k1
L.O.: k1.1 kThe kGlobal kFinancial kMarketplace
kSkill: k Recognition
AACSB: k Application kof kknowledge

10) The ksecurities kat kthe kheart kof kthe kglobal kcapital kmarkets kare kthe kMortgage kBacked
kSecuritiesk(MBS). kThe khealth kand ksecurity kof kthe kglobal kfinancial ksystem krely kon kthe
kquality kof kthese ksecurities.
Answer: kFALSE
kDiff: k1
L.O.: k1.1 kThe kGlobal kFinancial kMarketplace
kSkill: k Recognition
AACSB: k Application kof kknowledge

11) The kU.S. kdollar khas kbeen kthe kfocal kpoint kof kcurrency ktrading ksince kthe k1940s. kAs
ka kresult,kmost kof kthe kworld's kcurrencies kare kquoted kagainst kthe kdollar.
Answer: kTRUE
kDiff: k1
L.O.: k1.1 kThe kGlobal kFinancial kMarketplace
kSkill: k Recognition
AACSB: k Application kof kknowledge

12) Several kof kthe kworld's kmajor kcurrency kexchange krates kfollow ka kspecific kquotation
kconvention kthat kis kthe kresult kof ktradition kand khistory. kThe kexchange krate kbetween kthe
kU.S. kdollar kand kthe keurokis kalways kquoted kas k"dollars kper keuro."
Answer: kTRUE
kDiff: k1
L.O.: k1.1 kThe kGlobal kFinancial kMarketplace
kSkill: k Recognition
AACSB: k Application kof kknowledge




3
Copyright k© k2023 kPearson kEducation,
kInc.