Test bank for international financial management 9th edition by cheol eun bruce resnick.pdf
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Course
Financial management
Institution
Financial Management
Test bank for international financial management 9th edition by cheol eun bruce Test bank for international financial management 9th edition by cheol eun bruce
A) Foreign0exchange0and0political0risks
B) Market0imperfections
C) Expanded0opportunity0set
D) all0of0the0options
2) An0example(s)0of0a0political0risk0is
A) expropriation0of0assets.
B) adverse0change0in0tax0rules.
C) the0opposition0party0being0elected.
D) both0the0expropriation0of0assets0and0adverse0changes0in0tax0rules0are0correct.
A) natural0resources0being0depleted0in0one0country0after0another.
B) skilled0labor0being0highly0mobile.
C) multinational0corporations'0efforts0to0source0inputs0and0locate0production0any
where0where0costs0are0lower0and0profits0higher.
D) common0tastes0worldwide0for0the0same0goods0and0services.
International Financial Management 9th Edition
0 0 0 0
International Financial Management 9th Edition
0 0 0 0
, A) allows0investors0to0diversify0their0portfolios0internationally.
B) allows0minority0investors0to0buy0and0sell0stocks.
C) has0increased0the0cost0of0capital0for0firms.
D) none0of0the0options
A) liquidating0their0positions0in0stocks0to0buy0dollar-denominated0bonds.
B) investing0heavily0in0U.S.0and0other0foreign0financial0markets.
C) lobbying0the0U.S.0government0to0depreciate0its0currency.
D) lobbying0the0Japanese0government0to0allow0the0yen0to0appreciate.
6) Suppose0your0firm0invests0$100,0000in0a0project0in0Italy.0At0the0time0the0exchange0rate0
is
$1.250=0€1.00.0One0year0later0the0exchange0rate0is0the0same,0but0the0Italian0government
0has0expropriated0your0firm's0assets0paying0only0€80,0000in0compensation.0This0is0an0ex
ample0of
A) exchange0rate0risk.
B) political0risk.
C) market0imperfections.
D)0none0of0the0options,0since0$100,0000=0€80,0000×0$1.25/€1.00.
International Financial Management 9th Edition
0 0 0 0
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