w
1. ThewcommonlywacceptedwgoalwofwanwMNCwiswto:
a. maximizewshort-termwearnings.
b. maximizewshareholderwwealth.
c. minimizewrisk.
d. AwandwC.
e. maximizewinternationalwsales.
ANSWER: b
DIFFICULTY: Easy
LEARNINGwOBJECTIVES:w INFM.MADU.15.01.01
NATIONALwSTANDARDS:w UnitedwStatesw-wBUSPROG.INFMw.MADU.15.03
STATEwSTANDARDS: UnitedwStatesw-wOHw-wDISC.INFM.MADU.15.02
KEYWORDS: Bloom's:wKnowledge
2. Withwregardwtowcorporatewgoals,wanwMNCwiswmostlywconcernedwwithwmaximizingw
,wandwawpurelywdomesticwfirmwiswmostlywconcernedwwithwmaximizingw .
a. shareholderwwealth;wshort-
termwearnings
b. shareholderwwealth;wshareholderwwealth
c. short-termwearnings;wsaleswvolume
d. short-
termwearnings;wshareholderwweal
th
ANSWER: b
DIFFICULTY: Easy
LEARNINGwOBJECTIVES:w INFM.MADU.15.01.01
NATIONALwSTANDARDS:w UnitedwStatesw-wBUSPROG.INFMw.MADU.15.03
STATEwSTANDARDS: UnitedwStatesw-wOHw-wDISC.INFM.MADU.15.02
KEYWORDS: Bloom's:wKnowledge
3. ForwanwMNC,wagencywcostswarewtypically:
a. nonexistent
b. largerwthanwagencywcostswofwawsmallwpurelywdomesticwfirm.
c. smallerwthanwagencywcostswofwawsmallwpurelywdomesti
cwfirm.
d. thewsamewaswagencywcostswofwawsmallwpurelywdomesticwfirm.
ANSWER: b
DIFFICULTY: Easy
LEARNINGwOBJECTIVES:w INFM.MADU.15.01.01
NATIONALwSTANDARDS:w UnitedwStatesw-wBUSPROG.INFMw.MADU.15.03
STATEwSTANDARDS: UnitedwStatesw-wOHw-wDISC.INFM.MADU.15.02
KEYWORDS: Bloom's:wKnowledge
,Chapterw01:wMultinationalwFinancialwManagement:wAnwOvervie
w
4. WhichwofwthewfollowingwcouldwreducewagencywproblemswforwanwMNC?
a. stockwoptionswaswmanagerialwcompensation
b. hostilewtakeoverwthreat
c. investorwmonitoring
d. allwofwthewabovewarewformswofwcorporatewcontrolwthatwcouldwreducewagencywproblemswfor
wanwMNC.
ANSWER: d
DIFFICULTY: Moderate
LEARNINGwOBJECTIVES:w INFM.MADU.15.01.01
NATIONALwSTANDARDS:w UnitedwStatesw-wBUSPROG.INFMw.MADU.15.03
STATEwSTANDARDS: UnitedwStatesw-wOHw-wDISC.INFM.MADU.15.02
KEYWORDS: Bloom's:wComprehension
5. ThewvaluationwofwanwMNCwshouldwrisewwhenwanweventwcauseswthewexpectedwcashwflowswfromwforeignwsubsidiarieswtow
andwwhenwthewforeignwcurrencieswdenominatingwthesewcashwflowswarewexpect
edwtow .
a. decrease;w
appreciate
b. increase;wappreciate
c. decrease;w
depreciate
d. increase;wdepreciate
ANSWER: b
DIFFICULTY: Easy
LEARNINGwOBJECTIVES:w INFM.MADU.15.01.04
NATIONALwSTANDARDS:w UnitedwStatesw-wBUSPROG.INFMw.MADU.15.03
STATEwSTANDARDS: UnitedwStatesw-wOHw-wDISC.INFM.MADU.15.02
KEYWORDS: Bloom's:wComprehension
6. Whichwofwthewfollowingwtheorieswidentifieswspecializationwaswawreasonwforwinternationalwbusiness?
a. theorywofwcomparativewadvantage
b. imperfectwmarketswtheory
c. productwcyclewtheory
d. nonewofwthewabove
ANSWER: a
DIFFICULTY: Easy
LEARNINGwOBJECTIVES:w INFM.MADU.15.01.02
NATIONALwSTANDARDS:w UnitedwStatesw-wBUSPROG.INFMw.MADU.15.03
STATEwSTANDARDS: UnitedwStatesw-wOHw-wDISC.INFM.MADU.15.02
KEYWORDS: Bloom's:wKnowledge
, Chapterw01:wMultinationalwFinancialwManagement:wAnwOvervie
w
7. Whichwofwthewfollowingwtheorieswidentifieswthewnontransferabilitywofwresourceswaswawreasonwforwinternationalwbusiness?
a. theorywofwcomparativewadvantage
b. imperfectwmarketswtheory
c. productwcyclewtheory
d. nonewofwthewabove
ANSWER: b
DIFFICULTY: Easy
LEARNINGwOBJECTIVES:w INFM.MADU.15.01.02
NATIONALwSTANDARDS:w UnitedwStatesw-wBUSPROG.INFMw.MADU.15.03
STATEwSTANDARDS: UnitedwStatesw-wOHw-wDISC.INFM.MADU.15.02
KEYWORDS: Bloom's:wKnowledge
8. Whichwofwthewfollowingwtheorieswsuggestswthatwfirmswseekwtowpenetratewnewwmarketswoverwtime?
a. theorywofwcomparativewadvantage
b. imperfectwmarketswtheory
c. productwcyclewtheory
d. nonewofwthewabove
ANSWER: c
DIFFICULTY: Easy
LEARNINGwOBJECTIVES:w INFM.MADU.15.01.02
NATIONALwSTANDARDS:w UnitedwStatesw-wBUSPROG.INFMw.MADU.15.03
STATEwSTANDARDS: UnitedwStatesw-wOHw-wDISC.INFM.MADU.15.02
KEYWORDS: Bloom's:wKnowledge
9. Anwindustrywbasedwonwwhichwofwthewfollowingwwouldwmostwlikelywtakewadvantagewofwlowerwcostswinwsomewlesswdevelo
pedwforeignwcountries?
a. assemblywlinewproduction
b. specializedwprofessionalwservices
c. nuclearwmissilewprograms
d. developmentwofwmorewsophisticatedwcompute
rwtechnology
ANSWER: a
DIFFICULTY: Moderate
LEARNINGwOBJECTIVES:w INFM.MADU.15.01.02
NATIONALwSTANDARDS:w UnitedwStatesw-wBUSPROG.INFMw.MADU.15.03
STATEwSTANDARDS: UnitedwStatesw-wOHw-wDISC.INFM.MADU.15.02
KEYWORDS: Bloom's:wApplication