,Table of contents
1. Introduction
2. Motives of the world and foreign investments
3. The balance of payments
4. The international monetary system
5. The foreign exchange market and parity conditions
6. Currency futures and options
7. Financial swap
8. Exchange rate forecasting
9. Managing economic exposure and transaction
exposure
10. Translation exposure
11. International financial market
12. International banking issues and country risk
analysis
13. Financing foreign trade
14. Financing foreign investments
15. International working capital management
16. International Portfolio Investments
17. Corporate strategy and foreign direct investments
18. International capital budgeting decision
19. The cost of capital for foreign investments
20. Corporate performance for foreign operation
, Chapter 1
Introduction
ANSWE
R IDENTIFIED
WITH (*)
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
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
1. Introduction
2. Motives of the world and foreign investments
3. The balance of payments
4. The international monetary system
5. The foreign exchange market and parity conditions
6. Currency futures and options
7. Financial swap
8. Exchange rate forecasting
9. Managing economic exposure and transaction
exposure
10. Translation exposure
11. International financial market
12. International banking issues and country risk
analysis
13. Financing foreign trade
14. Financing foreign investments
15. International working capital management
16. International Portfolio Investments
17. Corporate strategy and foreign direct investments
18. International capital budgeting decision
19. The cost of capital for foreign investments
20. Corporate performance for foreign operation
, Chapter 1
Introduction
ANSWE
R IDENTIFIED
WITH (*)
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
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
