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Test Bank for Multinational Business Finance 16th Edition By (Eiteman/Stonehill/Moffett), ISBN: 9780137496013, All 18 Chapters Covered, |Complete Solution |Guide A+.€18,17
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Test Bank for Multinational Business Finance 16th Edition By (Eiteman/Stonehill/Moffett), ISBN: 9780137496013, All 18 Chapters Covered, |Complete Solution |Guide A+.
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Multinational Business Finance 16th Ed. By Eitema
Test Bank for Multinational Business Finance 16th Edition By (Eiteman/Stonehill/Moffett), ISBN: 9780137496013, All 18 Chapters Covered, |Complete Solution |Guide A+.Test Bank for Multinational Business Finance 16th Edition By (Eiteman/Stonehill/Moffett), ISBN: 9780137496013, All 18 Chapters Cover...
1.1 The Global Financial Marketplace i’|i’ i’|i’ i’|i’
1) Financial globalization has NOT resulted in: i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
A) continuing imbalances of balance of payments. i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
B) an increase in quantity and speed in the flow of capital across the world.
i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
C) capital markets less open and a decrease in the availability of capital for many
i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
organizations.
i’|i’
D) uniform ways of ownership, control, and governance across the i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
world.Answer: D
i’|i’ i’| i’ |i’
Diff: 1 i’|i’
L.O.: 1.1 The Global Financial
i’|i’ i’|i’ i’|i’ i’|i’
MarketplaceSkill: Recognition
i’|i’ i’| i’ | i’
AACSB: Application of knowledge i ’ | i ’ i’|i’ i’|i’
2) Financial globalization has NOT resulted in: i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
A) continuing imbalances of balance of payments. i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
B) an increase in quantity and speed in the flow of capital across the world.
i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
C) capital markets more open and an increase in the availability of capital for
i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
manyorganizations.
i’|i’ i’|
D) an increase in the flow of capital into and out of industrialized
i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
markets.Answer: C
i’|i’ i’| i’ |i’
Diff: 1 i’|i’
L.O.: 1.1 The Global Financial
i’|i’ i’|i’ i’|i’ i’|i’
MarketplaceSkill: Recognition
i’|i’ i’| i’ | i’
AACSB: Application of knowledge i ’ | i ’ i’|i’ i’|i’
3) The institutions of global finance are:
i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
A) central banks. i’|i’
B) commercial banks. i’|i’
C) investment banks. i’|i’
D) All of the above are institutions of global
i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
finance.Answer: D
i’|i’ i’| i’ |i’
Diff: 1 i’|i’
L.O.: 1.1 The Global Financial
i’|i’ i’|i’ i’|i’ i’|i’
MarketplaceSkill: Recognition
i’|i’ i’| i’ | i’
AACSB: Application of knowledge i ’ | i ’ i’|i’ i’|i’
2
,4) A major cost avoided in the eurocurrency markets is the payment of deposit insurance
i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
fees,such as:
i’|i’ i’| i’|i’
A) Federal Deposit Insurance Corporation — FDIC. i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
B) Office of the Comptroller of the Currency — OCC. i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
C) International Monetary Fund — IMF. i’|i’ i’|i’ i’|i’ i’|i’
D) World Bank — i’|i’ i’|i’
WB.Answer: A
i’|i’ i’| i’ |i’
Diff: 2 i’|i’
L.O.: 1.1 The Global Financial
i’|i’ i’|i’ i’|i’ i’|i’
MarketplaceSkill: Recognition
i’|i’ i’| i’ | i’
AACSB: Application of knowledge i ’ | i ’ i’|i’ i’|i’
5) The modern eurocurrency market was born shortly after:
i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
A) World War II. i’|i’ i’|i’
B) World War I. i’|i’ i’|i’
C) Korean War. i’|i’
D) Bosnian
War.Answer:
i’|i’ i’| i’|i’ i’|i’
A Diff: 1
i’ | i’ i’|i’ i’|i’
L.O.: 1.1 The Global Financial
i’|i’ i’|i’ i’|i’ i’|i’
MarketplaceSkill: Recognition
i’|i’ i’| i’ | i’
AACSB: Application of knowledge i ’ | i ’ i’|i’ i’|i’
6) The reference rate of interest in the eurocurrency market is the:
i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
A) London Interbank Offered Rate. i’|i’ i’|i’ i’|i’
B) Prima rate. i’|i’
C) Federal funds rate. i’|i’ i’|i’
D) Treasury
rate.Answer:
i’|i’ i’| i’|i’ i’|i’
A Diff: 1
i’ |i’ i’|i’ i’|i’
L.O.: 1.1 The Global Financial
i’|i’ i’|i’ i’|i’ i’|i’
MarketplaceSkill: Recognition
i’|i’ i’| i’ | i’
AACSB: Application of knowledge i ’ | i ’ i’|i’ i’|i’
7) Interest spreads in the eurocurrency market are small for many reasons EXCEPT:
i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
A) Eurocurrency loans are secured loans. i’|i’ i’|i’ i’|i’ i’|i’
B) Eurocurrency deposits and loans are made in amounts of $500,000 or more on an i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
unsecuredbasis.
i’|i’ i’|
C) The eurocurrency is a wholesale market.
i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
D) Borrowers are usually large corporations or government i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
entities.Answer: A
i’|i’ i’| i ’ | i’
Diff: 2 i’|i’
L.O.: 1.1 The Global Financial
i’|i’ i’|i’ i’|i’ i’|i’
MarketplaceSkill: Recognition
i’|i’ i’| i’ | i’
AACSB: Application of knowledge i ’ | i ’ i’|i’ i’|i’
3
, 8) Multinational enterprises (MNEs) are firms, both for-profit companies and not-for-profit i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
organizations, that have operations in more than one country, and conduct their business
i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
throughforeign subsidiaries, branches, or joint ventures with host country firms.
i’|i’ i’| i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
Answer:
TRUEDiff: 1
i’|i’ i’| i’|i’
L.O.: 1.1 The Global Financial
i’|i’ i’|i’ i’|i’ i’|i’
MarketplaceSkill: Recognition
i’|i’ i’| i’ | i’
AACSB: Application of knowledge i ’ | i ’ i’|i’ i’|i’
9) Ownership, control, and governance changes radically across the world. The publicly i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
tradedcompany is not the dominant global business organization—the privately held or
i’|i’ i’| i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
family-ownedbusiness is the prevalent structure—and their goals and measures of
i’|i’ i’| i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
L.O.: 1.1 The Global Financial
i’|i’ i’|i’ i’|i’ i’|i’
MarketplaceSkill: Recognition
i’|i’ i’| i’ | i’
AACSB: Application of knowledge i ’ | i ’ i’|i’ i’|i’
10) The securities at the heart of the global capital markets are the Mortgage Backed
i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
Securities(MBS). The health and security of the global financial system rely on the
i’|i’ i’| i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
quality of these securities.
i’|i’ i’|i’ i’|i’ i’|i’
Answer:
FALSEDiff: 1
i’|i’ i’| i’|i’
L.O.: 1.1 The Global Financial
i’|i’ i’|i’ i’|i’ i’|i’
MarketplaceSkill: Recognition
i’|i’ i’| i’ | i’
AACSB: Application of knowledge i ’ | i ’ i’|i’ i’|i’
11) The U.S. dollar has been the focal point of currency trading since the 1940s. As a
i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
result,most of the world's currencies are quoted against the dollar.
i’|i’ i’| i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
Answer:
TRUEDiff: 1
i’|i’ i’| i’|i’
L.O.: 1.1 The Global Financial
i’|i’ i’|i’ i’|i’ i’|i’
MarketplaceSkill: Recognition
i’|i’ i’| i’ | i’
AACSB: Application of knowledge i ’ | i ’ i’|i’ i’|i’
12) Several of the world's major currency exchange rates follow a specific quotation
i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
convention that is the result of tradition and history. The exchange rate between the U.S.
i’|i’ i’| i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
dollar and the eurois always quoted as "dollars per euro."
i’|i’ i’|i’ i’|i’ i’|i’ i’| i’|i’ i’|i’ i’|i’ i’|i’ i’|i’ i’|i’
Answer:
TRUEDiff: 1
i’|i’ i’| i’|i’
L.O.: 1.1 The Global Financial
i’|i’ i’|i’ i’|i’ i’|i’
MarketplaceSkill: Recognition
i’|i’ i’| i’ | i’
AACSB: Application of knowledge i ’ | i ’ i’|i’ i’|i’
4
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