Exam (elaborations)
BUS 280 Final MOD 15 (1)
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- Bible 10/12
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- Bible 10/12
BUS 280 Final MOD 15 (1)
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BUS 280 Final MOD 15American depository receipts (ADRs) function to - CORRECT ANSWER-eliminate a
foreign firm's need to have a broker in the United States and to make currency
exchanges.
Collecting receivables late when a currency is expected to strengthen is an example
of ________. - CORRECT ANSWER-Strategic Delay/ Lagging Swap
Rather than loan funds directly to its subsidiary, Heritage Mfg. deposited the funds in
an international bank and the bank then loaned that money to the subsidiary. What is
this an example of? - CORRECT ANSWER-fronting loan
Tax havens are financial centers in which - CORRECT ANSWER-banking
regulations are loose.
When a British-based firm issues stock in a foreign market, what is its primary
purpose? - CORRECT ANSWER-to raise capital
What occurs when a company relies on external equity to raise capital? - CORRECT
ANSWER-part of the firm's ownership is being sold
When assessing debt markets as a source of capital, there is an increasing tendency
among companies to - CORRECT ANSWER-tap local markets first
What is a source for debt financing used by some companies? - CORRECT
ANSWER-other businesses
What cash management technique is often used by international companies when
local government blocks incoming funds? - CORRECT ANSWER-a fronting loan
________ is taking a position in one market to offset exposure to price changes in
another market. - CORRECT ANSWER-Hedging
________ pricing establishes the price for transactions between members of the
enterprise. - CORRECT ANSWER-Transfer
_________exposure occurs when there is a time lag between when a transaction
takes place in a foreign currency and when payment is made - CORRECT
ANSWER-Transaction
____________market hedges are the most widely used of the hedging approaches,
but it eliminates the possibility of a gain if the currency moves in the company's favor.
- CORRECT ANSWER-Hedging Forward
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