groups. These principles often help people determine what is "right" or "wrong" in different situations.
Law, on the other hand, is a system of rules that are created and enforced by institutions to regulate
behavior, ensure order, and resolve disputes.Ethical dilemmas often arise when an individual or
organization faces a situation in which different moral principles conflict, or where there is no clear
"right" answer. Legal issues, meanwhile, come into play when actions conflict with established laws or
legal norms. The challenge arises in balancing both ethical and legal considerations when making
decisions.### 2. **Ethical Issues in
Exam Questions
Global Finance & International Business
Chapter 1-20
Chapter 1
Introduction
1. Which of the following is the primary objective of a firm?
A. employees' benefits
B. satisfaction of customers
C. satisfaction of suppliers
D. prompt payment to creditors
* E. maximize stockholder wealth
2. Financial risk involves .
A. fluctuation in exchange rates
B. different interest and inflation rates
C. balance of payments position
D. A and B
* E. A, B, and C
3. Three sweeping changes include .
A. the end of Cold War
B. industrialization and growth of the developing world
C. the creation of the North American Trade Agreement
D. increased globalization
* E. A, B, and D
4. Managers are generally defined as .
A. stockholders
* B. agents
C. creditors
D. suppliers
1
, E. customers
5. Which of the following is not one of seven principles of global finance?
A. market imperfection
B. risk-return tradeoff
C. portfolio effect
D. comparative advantage
* E. company advantage
6. Incentives for multinational company managers include the following except .
A. stock options
B. bonuses
C. perquisites
D. salary increases
* E. vacation
groups. These principles often help people determine what is "right" or "wrong" in different
situations. Law, on the other hand, is a system of rules that are created and enforced by institutions
to regulate behavior, ensure order, and resolve disputes.Ethical dilemmas often arise when an
individual or organization faces a situation in which different moral principles conflict, or where
there is no clear "right" answer. Legal issues, meanwhile, come into play when actions conflict with
established laws or legal norms. The challenge arises in balancing both ethical and legal
considerations when making decisions.### 2. **Ethical Issues in
7. Environmental factors affecting international operations are as follows except .
A. foreign customs
B. foreign economic factors
C. foreign political situations
D. foreign legal aspect
* E. international distance
8. Three major risks in international business are .
A. political, financial and weather
B. economic, political and people
* C. political, financial and regulatory
D. accounting, management and information
E. marketing, ethics and political
9. Conflicts of interest for multinational corporations do not include .
A. the interests of sovereign governments may be different
B. the goals of multinationals are divergent from host countries
C. some conflicts may exist within multinational subsidiaries
D. multinational companies may conflict with local laws
* E. multinational managers live in different time zones
10. The conflict between owners, employees, suppliers, and customers of a company is
2
, known as .
A. regulatory risk
B. problem of agency
C. conflict of multiple environments
* D. conflict of interests
E. none of the above
11. The main differences between domestic and international companies from a financial
manager's point of view are largely due to differences in .
A. risks
B. national laws
C. economic factors
D. political factors
* E. all of the above
12. A global company is an organization that attempts to .
A. have a worldwide presence in its market
B. integrate its operations worldwide
C. standardize operations in one or more of the company's functional areas
D. A and B
* E. A, B, and C
13. Corporate governance is often narrowly defined as the prudent exercise of ownership
rights toward the goal of increased .
* A. shareholder value
B. profit
C. profit margin on sales
D. asset turnover
E. sales volume
groups. These principles often help people determine what is "right" or "wrong" in different situations.
Law, on the other hand, is a system of rules that are created and enforced by institutions to regulate
behavior, ensure order, and resolve disputes.Ethical dilemmas often arise when an individual or
organization faces a situation in which different moral principles conflict, or where there is no clear
"right" answer. Legal issues, meanwhile, come into play when actions conflict with established laws or
legal norms. The challenge arises in balancing both ethical and legal considerations when making
decisions.### 2. **Ethical Issues in
14. The most common form of shareholder activism includes .
A. a shareholder proposal for proxy fight
B. direct negotiation with management
C. public targeting of a corporation
* D A, B, and C
E. A and C only
15. The OECD Principles of Corporate Governance covers .
A. the rights of shareholders
3
, B. the equitable treatment of shareholders
C. the responsibilities of the board
D. disclosure and transparency
* E. all of the above
16. The political, regulatory, technological, and economic forces radically changing the
global competitive environment include .
A. the collapse of communism
B. the privatization of state-owned enterprises around the world
C. the revolution in information technologies
D. a wave of mergers, leveraged buyouts, and takeovers
* E. all of the above
groups. These principles often help people determine what is "right" or "wrong" in different situations.
Law, on the other hand, is a system of rules that are created and enforced by institutions to regulate
behavior, ensure order, and resolve disputes.Ethical dilemmas often arise when an individual or
organization faces a situation in which different moral principles conflict, or where there is no clear
"right" answer. Legal issues, meanwhile, come into play when actions conflict with established laws or
legal norms. The challenge arises in balancing both ethical and legal considerations when making
decisions.### 2. **Ethical Issues in
17. All of the following have played an important role in the globalization process of the
world economy except .
A. advances in information technologies
* B. increased tariffs
C. reductions in trade barriers
D. reduced transportation and communication costs
E. reductions in technological barriers
18. Reductions in transportation and communication costs have .
A. facilitated international production activities
B. enlarged trading areas
C. enabled companies to exploit international cost differentials
D. reduced technological barriers
* E. all of the above
19. Reasons for management to focus on stockholder wealth maximization include .
A. stockholders are the owners of the company
B. stockholders provide the risk capital that protects the welfare of other constituents
C. a high stock price provides the best defense against a hostile takeover
D. enhanced shareholder value makes it easier for the company to attract additional equity
capital
* E. all of the above
20. Which of the following statements about financial planning and control is not true?
A. financial planning and control must be considered simultaneously
4
Law, on the other hand, is a system of rules that are created and enforced by institutions to regulate
behavior, ensure order, and resolve disputes.Ethical dilemmas often arise when an individual or
organization faces a situation in which different moral principles conflict, or where there is no clear
"right" answer. Legal issues, meanwhile, come into play when actions conflict with established laws or
legal norms. The challenge arises in balancing both ethical and legal considerations when making
decisions.### 2. **Ethical Issues in
Exam Questions
Global Finance & International Business
Chapter 1-20
Chapter 1
Introduction
1. Which of the following is the primary objective of a firm?
A. employees' benefits
B. satisfaction of customers
C. satisfaction of suppliers
D. prompt payment to creditors
* E. maximize stockholder wealth
2. Financial risk involves .
A. fluctuation in exchange rates
B. different interest and inflation rates
C. balance of payments position
D. A and B
* E. A, B, and C
3. Three sweeping changes include .
A. the end of Cold War
B. industrialization and growth of the developing world
C. the creation of the North American Trade Agreement
D. increased globalization
* E. A, B, and D
4. Managers are generally defined as .
A. stockholders
* B. agents
C. creditors
D. suppliers
1
, E. customers
5. Which of the following is not one of seven principles of global finance?
A. market imperfection
B. risk-return tradeoff
C. portfolio effect
D. comparative advantage
* E. company advantage
6. Incentives for multinational company managers include the following except .
A. stock options
B. bonuses
C. perquisites
D. salary increases
* E. vacation
groups. These principles often help people determine what is "right" or "wrong" in different
situations. Law, on the other hand, is a system of rules that are created and enforced by institutions
to regulate behavior, ensure order, and resolve disputes.Ethical dilemmas often arise when an
individual or organization faces a situation in which different moral principles conflict, or where
there is no clear "right" answer. Legal issues, meanwhile, come into play when actions conflict with
established laws or legal norms. The challenge arises in balancing both ethical and legal
considerations when making decisions.### 2. **Ethical Issues in
7. Environmental factors affecting international operations are as follows except .
A. foreign customs
B. foreign economic factors
C. foreign political situations
D. foreign legal aspect
* E. international distance
8. Three major risks in international business are .
A. political, financial and weather
B. economic, political and people
* C. political, financial and regulatory
D. accounting, management and information
E. marketing, ethics and political
9. Conflicts of interest for multinational corporations do not include .
A. the interests of sovereign governments may be different
B. the goals of multinationals are divergent from host countries
C. some conflicts may exist within multinational subsidiaries
D. multinational companies may conflict with local laws
* E. multinational managers live in different time zones
10. The conflict between owners, employees, suppliers, and customers of a company is
2
, known as .
A. regulatory risk
B. problem of agency
C. conflict of multiple environments
* D. conflict of interests
E. none of the above
11. The main differences between domestic and international companies from a financial
manager's point of view are largely due to differences in .
A. risks
B. national laws
C. economic factors
D. political factors
* E. all of the above
12. A global company is an organization that attempts to .
A. have a worldwide presence in its market
B. integrate its operations worldwide
C. standardize operations in one or more of the company's functional areas
D. A and B
* E. A, B, and C
13. Corporate governance is often narrowly defined as the prudent exercise of ownership
rights toward the goal of increased .
* A. shareholder value
B. profit
C. profit margin on sales
D. asset turnover
E. sales volume
groups. These principles often help people determine what is "right" or "wrong" in different situations.
Law, on the other hand, is a system of rules that are created and enforced by institutions to regulate
behavior, ensure order, and resolve disputes.Ethical dilemmas often arise when an individual or
organization faces a situation in which different moral principles conflict, or where there is no clear
"right" answer. Legal issues, meanwhile, come into play when actions conflict with established laws or
legal norms. The challenge arises in balancing both ethical and legal considerations when making
decisions.### 2. **Ethical Issues in
14. The most common form of shareholder activism includes .
A. a shareholder proposal for proxy fight
B. direct negotiation with management
C. public targeting of a corporation
* D A, B, and C
E. A and C only
15. The OECD Principles of Corporate Governance covers .
A. the rights of shareholders
3
, B. the equitable treatment of shareholders
C. the responsibilities of the board
D. disclosure and transparency
* E. all of the above
16. The political, regulatory, technological, and economic forces radically changing the
global competitive environment include .
A. the collapse of communism
B. the privatization of state-owned enterprises around the world
C. the revolution in information technologies
D. a wave of mergers, leveraged buyouts, and takeovers
* E. all of the above
groups. These principles often help people determine what is "right" or "wrong" in different situations.
Law, on the other hand, is a system of rules that are created and enforced by institutions to regulate
behavior, ensure order, and resolve disputes.Ethical dilemmas often arise when an individual or
organization faces a situation in which different moral principles conflict, or where there is no clear
"right" answer. Legal issues, meanwhile, come into play when actions conflict with established laws or
legal norms. The challenge arises in balancing both ethical and legal considerations when making
decisions.### 2. **Ethical Issues in
17. All of the following have played an important role in the globalization process of the
world economy except .
A. advances in information technologies
* B. increased tariffs
C. reductions in trade barriers
D. reduced transportation and communication costs
E. reductions in technological barriers
18. Reductions in transportation and communication costs have .
A. facilitated international production activities
B. enlarged trading areas
C. enabled companies to exploit international cost differentials
D. reduced technological barriers
* E. all of the above
19. Reasons for management to focus on stockholder wealth maximization include .
A. stockholders are the owners of the company
B. stockholders provide the risk capital that protects the welfare of other constituents
C. a high stock price provides the best defense against a hostile takeover
D. enhanced shareholder value makes it easier for the company to attract additional equity
capital
* E. all of the above
20. Which of the following statements about financial planning and control is not true?
A. financial planning and control must be considered simultaneously
4
