TESTNBANKNforNInternationalNFinancialNManagementN9thNEditionNbyNCheolNEun,NBruceNResnickNandNTu
ugi
Chuluun.
TEST BANK for International Financial Management
N N N N N N
9th Edition by Cheol Eun, Bruce Resnick and Tuugi Ch
N N N N N N N N N
uluun. ISBN-13: 9781260013870
N N
TestNBank PageN1
, TESTNBANKNforNInternationalNFinancialNManagementN9thNEditionNbyNCheolNEun,NBruceNResnickNandNTu
ugi
Chuluun.
MULTIPLENCHOICEN-
ChooseNtheNoneNalternativeNthatNbestNcompletesNtheNstatementNorNanswersNtheNquestion.
N
1) WhatNmajorNdimensionNsetsNapartNinternationalNfinanceNfromNdomesticNfinance?
A) ForeignNexchangeNandNpoliticalNrisks
B) MarketNimperfections
C) ExpandedNopportunityNset
D) allNofNtheNoptions
2) AnNexample(s)NofNaNpoliticalNriskNis
A) expropriationNofNassets.
B) adverseNchangeNinNtaxNrules.
C) theNoppositionNpartyNbeingNelected.
D) bothNtheNexpropriationNofNassetsNandNadverseNchangesNinNtaxNrulesNareNcorrect.
3) ProductionNofNgoodsNandNservicesNhasNbecomeNglobalizedNtoNaNlargeNextentNasNaNresultNof
A) naturalNresourcesNbeingNdepletedNinNoneNcountryNafterNanother.
B) skilledNlaborNbeingNhighlyNmobile.
C) multinationalNcorporations'NeffortsNtoNsourceNinputsNandNlocateNproductionNanywher
eNwhereNcostsNareNlowerNandNprofitsNhigher.
D) commonNtastesNworldwideNforNtheNsameNgoodsNandNservices.
4) Recently,NfinancialNmarketsNhaveNbecomeNhighlyNintegrated.NThisNdevelopment
TestNBank PageN2
, TESTNBANKNforNInternationalNFinancialNManagementN9thNEditionNbyNCheolNEun,NBruceNResnickNandNTu
ugi
Chuluun.
A) allowsNinvestorsNtoNdiversifyNtheirNportfoliosNinternationally.
B) allowsNminorityNinvestorsNtoNbuyNandNsellNstocks.
C) hasNincreasedNtheNcostNofNcapitalNforNfirms.
D) noneNofNtheNoptions
5) JapanNhasNexperiencedNlargeNtradeNsurpluses.NJapaneseNinvestorsNhaveNrespondedNtoNthisNby
A) liquidatingNtheirNpositionsNinNstocksNtoNbuyNdollar-denominatedNbonds.
B) investingNheavilyNinNU.S.NandNotherNforeignNfinancialNmarkets.
C) lobbyingNtheNU.S.NgovernmentNtoNdepreciateNitsNcurrency.
D) lobbyingNtheNJapaneseNgovernmentNtoNallowNtheNyenNtoNappreciate.
6) SupposeNyourNfirmNinvestsN$100,000NinNaNprojectNinNItaly.NAtNtheNtimeNtheNexchangeNrateNis
$1.25N=N€1.00.NOneNyearNlaterNtheNexchangeNrateNisNtheNsame,NbutNtheNItalianNgovernmentNh
asNexpropriatedNyourNfirm'sNassetsNpayingNonlyN€80,000NinNcompensation.NThisNisNanNexamp
leNof
A) exchangeNrateNrisk.
B) politicalNrisk.
C) marketNimperfections.
D)NnoneNofNtheNoptions,NsinceN$100,000N=N€80,000N×N$1.25/€1.00.
TestNBank PageN3
, TESTNBANKNforNInternationalNFinancialNManagementN9thNEditionNbyNCheolNEun,NBruceNResnickNandNTu
ugi
Chuluun.
7) SupposeNyouNstartNwithN$100NandNbuyNstockNforN£50NwhenNtheNexchangeNrateNisN£1N=N$2.
OneNyearNlater,NtheNstockNrisesNtoN£60.NYouNareNhappyNwithNyourN20NpercentNreturnNonNtheNstock
N
,NbutNwhenNyouNsellNtheNstockNandNexchangeNyourN£60NforNdollars,NyouNonlyNgetN$45NsinceNtheNpo
undNhasNfallenNtoN£1N=N$0.75.NThisNlossNofNvalueNisNanNexampleNof
A) exchangeNrateNrisk.
B) politicalNrisk.
C) marketNimperfections.
D) weaknessNinNtheNdollar.
8) SupposeNthatNGreatNBritainNisNaNmajorNexportNmarketNforNyourNfirm,NaNU.S.-
basedNMNC.NIfNtheNBritishNpoundNdepreciatesNagainstNtheNU.S.Ndollar,
A) yourNfirmNwillNbeNableNtoNchargeNmoreNinNdollarNtermsNwhileNkeepingNpoundNprices
stable.
B) yourNfirmNmayNbeNpricedNoutNofNtheNU.K.Nmarket,NtoNtheNextentNthatNyourNdollarNcosts
stayNconstantNandNyourNpoundNpricesNwillNrise.
C) toNprotectNU.K.NmarketNshare,NyourNfirmNmayNhaveNtoNcutNtheNdollarNpriceNofNyourNgoo
dsNtoNkeepNtheNpoundNpriceNtheNsame.
D) yourNfirmNmayNbeNpricedNoutNofNtheNU.K.Nmarket,NtoNtheNextentNthatNyourNdollarNcos
tsNstayNconstantNandNyourNpoundNpricesNwillNrise,NandNtoNprotectNU.K.NmarketNshare,NyourNfirm
mayNhaveNtoNcutNtheNdollarNpriceNofNyourNgoodsNtoNkeepNtheNpoundNpriceNtheNsame.
N
9) SupposeNMexicoNisNaNmajorNexportNmarketNforNyourNU.S.-
basedNcompanyNandNtheNMexicanNpesoNappreciatesNdrasticallyNagainstNtheNU.S.Ndollar.NThisNmean
s
TestNBank PageN4
ugi
Chuluun.
TEST BANK for International Financial Management
N N N N N N
9th Edition by Cheol Eun, Bruce Resnick and Tuugi Ch
N N N N N N N N N
uluun. ISBN-13: 9781260013870
N N
TestNBank PageN1
, TESTNBANKNforNInternationalNFinancialNManagementN9thNEditionNbyNCheolNEun,NBruceNResnickNandNTu
ugi
Chuluun.
MULTIPLENCHOICEN-
ChooseNtheNoneNalternativeNthatNbestNcompletesNtheNstatementNorNanswersNtheNquestion.
N
1) WhatNmajorNdimensionNsetsNapartNinternationalNfinanceNfromNdomesticNfinance?
A) ForeignNexchangeNandNpoliticalNrisks
B) MarketNimperfections
C) ExpandedNopportunityNset
D) allNofNtheNoptions
2) AnNexample(s)NofNaNpoliticalNriskNis
A) expropriationNofNassets.
B) adverseNchangeNinNtaxNrules.
C) theNoppositionNpartyNbeingNelected.
D) bothNtheNexpropriationNofNassetsNandNadverseNchangesNinNtaxNrulesNareNcorrect.
3) ProductionNofNgoodsNandNservicesNhasNbecomeNglobalizedNtoNaNlargeNextentNasNaNresultNof
A) naturalNresourcesNbeingNdepletedNinNoneNcountryNafterNanother.
B) skilledNlaborNbeingNhighlyNmobile.
C) multinationalNcorporations'NeffortsNtoNsourceNinputsNandNlocateNproductionNanywher
eNwhereNcostsNareNlowerNandNprofitsNhigher.
D) commonNtastesNworldwideNforNtheNsameNgoodsNandNservices.
4) Recently,NfinancialNmarketsNhaveNbecomeNhighlyNintegrated.NThisNdevelopment
TestNBank PageN2
, TESTNBANKNforNInternationalNFinancialNManagementN9thNEditionNbyNCheolNEun,NBruceNResnickNandNTu
ugi
Chuluun.
A) allowsNinvestorsNtoNdiversifyNtheirNportfoliosNinternationally.
B) allowsNminorityNinvestorsNtoNbuyNandNsellNstocks.
C) hasNincreasedNtheNcostNofNcapitalNforNfirms.
D) noneNofNtheNoptions
5) JapanNhasNexperiencedNlargeNtradeNsurpluses.NJapaneseNinvestorsNhaveNrespondedNtoNthisNby
A) liquidatingNtheirNpositionsNinNstocksNtoNbuyNdollar-denominatedNbonds.
B) investingNheavilyNinNU.S.NandNotherNforeignNfinancialNmarkets.
C) lobbyingNtheNU.S.NgovernmentNtoNdepreciateNitsNcurrency.
D) lobbyingNtheNJapaneseNgovernmentNtoNallowNtheNyenNtoNappreciate.
6) SupposeNyourNfirmNinvestsN$100,000NinNaNprojectNinNItaly.NAtNtheNtimeNtheNexchangeNrateNis
$1.25N=N€1.00.NOneNyearNlaterNtheNexchangeNrateNisNtheNsame,NbutNtheNItalianNgovernmentNh
asNexpropriatedNyourNfirm'sNassetsNpayingNonlyN€80,000NinNcompensation.NThisNisNanNexamp
leNof
A) exchangeNrateNrisk.
B) politicalNrisk.
C) marketNimperfections.
D)NnoneNofNtheNoptions,NsinceN$100,000N=N€80,000N×N$1.25/€1.00.
TestNBank PageN3
, TESTNBANKNforNInternationalNFinancialNManagementN9thNEditionNbyNCheolNEun,NBruceNResnickNandNTu
ugi
Chuluun.
7) SupposeNyouNstartNwithN$100NandNbuyNstockNforN£50NwhenNtheNexchangeNrateNisN£1N=N$2.
OneNyearNlater,NtheNstockNrisesNtoN£60.NYouNareNhappyNwithNyourN20NpercentNreturnNonNtheNstock
N
,NbutNwhenNyouNsellNtheNstockNandNexchangeNyourN£60NforNdollars,NyouNonlyNgetN$45NsinceNtheNpo
undNhasNfallenNtoN£1N=N$0.75.NThisNlossNofNvalueNisNanNexampleNof
A) exchangeNrateNrisk.
B) politicalNrisk.
C) marketNimperfections.
D) weaknessNinNtheNdollar.
8) SupposeNthatNGreatNBritainNisNaNmajorNexportNmarketNforNyourNfirm,NaNU.S.-
basedNMNC.NIfNtheNBritishNpoundNdepreciatesNagainstNtheNU.S.Ndollar,
A) yourNfirmNwillNbeNableNtoNchargeNmoreNinNdollarNtermsNwhileNkeepingNpoundNprices
stable.
B) yourNfirmNmayNbeNpricedNoutNofNtheNU.K.Nmarket,NtoNtheNextentNthatNyourNdollarNcosts
stayNconstantNandNyourNpoundNpricesNwillNrise.
C) toNprotectNU.K.NmarketNshare,NyourNfirmNmayNhaveNtoNcutNtheNdollarNpriceNofNyourNgoo
dsNtoNkeepNtheNpoundNpriceNtheNsame.
D) yourNfirmNmayNbeNpricedNoutNofNtheNU.K.Nmarket,NtoNtheNextentNthatNyourNdollarNcos
tsNstayNconstantNandNyourNpoundNpricesNwillNrise,NandNtoNprotectNU.K.NmarketNshare,NyourNfirm
mayNhaveNtoNcutNtheNdollarNpriceNofNyourNgoodsNtoNkeepNtheNpoundNpriceNtheNsame.
N
9) SupposeNMexicoNisNaNmajorNexportNmarketNforNyourNU.S.-
basedNcompanyNandNtheNMexicanNpesoNappreciatesNdrasticallyNagainstNtheNU.S.Ndollar.NThisNmean
s
TestNBank PageN4
