国际金融International Finance Test Bank_01

ANS: B PTS: 1

2. With regard to corporate goals, an MNC is mostly concerned with maximizing

ANS: B PTS: 1

ANS: B PTS: 1

ANS: D PTS: 1

5. The valuation of an MNC should rise when an event causes the expected cash

flows from foreign to ____ and when foreign currencies denominating these cash

ANS: B PTS: 1

6. Which of the following theories identifies specialization as a reason for interna-

ANS: A PTS: 1

7. Which of the following theories identifies the non-transferability of resources as a

ANS: B PTS: 1

8. Which of the following theories suggests that firms seek to penetrate new markets

ANS: C PTS: 1

9. Which of the following industries would most likely take advantage of lower costs

ANS: A PTS: 1

ANS: D PTS: 1

ANS: C PTS: 1

14. An MNC may be more exposed to agency problems if most of its shares are held

ANS: A PTS: 1

ANS: C PTS: 1

21. In comparing exporting to direct foreign investment (DFI), an exporting operation

will likely incur ____ fixed production costs and ____ transportation costs than

ANS: C PTS: 1

ANS: B PTS: 1

ANS: A PTS: 1

29. Which of the following is not mentioned in the text as an additional risk resulting

ANS: C PTS: 1

30. Licensing obligates a firm to provide ____, while franchising obligates a firm to

ANS: B PTS: 1

31. Which of the following is not a way in which agency problems can be reduced

ANS: C PTS: 1

ANS: D PTS: 1

44. Assume that an American firm wants to engage in international business without

major investment in the foreign country. Which method is least appropriate in this

ANS: D PTS: 1

45. The valuation of MNC accounts for all the cash flows received by the foreign

subsidiaries plus all the cash flows remitted by the subsidiaries.

a. True

b. False

ANS: F PTS: 1

ANS: D PTS: 1

ANS: D PTS: 1

50. International trade generally results in ____ exposure to international political risk

and ____ exposure to international economic conditions, when compared to other

ANS: D PTS: 1

51. Assume that Boca Co. wants to expand its business to Japan, and wants complete

control over the operations in Japan. Which method of international business is

ANS: B PTS: 1

54. Assume that Live Co. has expected cash flows of $200,000 from domestic

operations, SF200,000 from Swiss operations, and 150,000 euros from Italian op-erations at the end of the year. The Swiss franc's value and euro's value are ex-

pected to be $.83 and $1.29 respectively, at the end this year. What are the ex-

ANS: B PTS: 1

55. Saller Co. has a subsidiary in Mexico. The expected cash flows in pesos to be

received in the future from this subsidiary have not changed since last month, but the valuation of Saller Co. has declined since last month. What could've caused this

ANS: C PTS: 1

56. Jensen Co. wants to establish a new subsidiary in Mexico that will sell computers

to Mexican customers and remit earnings back to the U.S. parent. The value of this project will be favorably affected if the value of the peso ____ while it establishes

ANS: A PTS: 1

59. Livingston Co. has a subsidiary in Korea. The subsidiary reinvests half of its net

cash flows into operations and remits half to the parent. Livingston's expected cash flows from domestic business are $100,000 and the Korean subsidiary is expected to generate 100 million Korean won at the end of the year. The expected value of

ANS: C PTS: 1

ANS: C PTS: 1

74. Agency costs faced by multinational corporations (MNCs) may be larger than

ANS: D PTS: 1

75. Which of the following is not one of the more common methods used by MNCs to

ANS: E PTS: 1

76. Which of the following is not mentioned in the text as a theory of international

ANS: D PTS: 1

ANS: E PTS: 1

ANS: C PTS: 1

ANS: B PTS: 1