国际金融.docx

国际金融.docx

《国际金融.docx》由会员分享，可在线阅读，更多相关《国际金融.docx（44页珍藏版）》请在冰豆网上搜索。

国际金融

CHAPTER1GlobalizationandtheMultinationalFirm

1）Whatmajordimensionsetsapartinternationalfinancefromdomesticfinance?

a）foreignexchangeandpoliticalrisks

b）Marketimperfections

c）Expandedopportunityset

d）alloftheabove

2）Anexampleofapoliticalriskis

a）Expropriationofassets

b）Adversechangeintaxrules

c）Theoppositionpartybeingelected

d）a）andb）arebothcorrect

3）Productionofgoodsandserviceshasbecomeglobalizedtoalargeextentasaresult

a）Skilledlaborbeinghighlymobile

b）Naturalresourcesbeingdepletedinonecountryafteranother

c）Multinationalcorporations’effortstosourceinputsandlocateproductionanywherewherecostsarelowerandprofitshigher

d）Commontastesworldwideforthesamegoodsandservices

4）Recently,financialmarketshavebecomehighlyintegrated.Thisdevelopment

a）Allowsinvestorstodiversifytheirportfoliosinternationally

b）Allowsminorityinvestorstobuyandsellstocks

c）Hasincreasedthecostofcapitalforfirms

d）Answersa）andc）arebothcorrect.

5）Japanhasexperiencedlargetradesurpluses.Japaneseinvestorshaverespondedtothisby

a）Liquidatingtheirpositionsinstockstobuydollardenominatedbonds

b）InvestingheavilyinU.S.andotherforeignfinancialmarkets

c）LobbyingtheU.S.governmenttodepreciateitscurrency

d）LobbyingtheJapanesegovernmenttoallowtheyentoappreciate

6）Supposeyourfirminvests$100,000inaprojectinItaly.Atthetimetheexchangerateis$1.25=€1.00.Oneyearlatertheexchangerateisthesame,buttheItaliangovernmenthasexpropriatedyourfirm’sassetspayingonly€80,000incompensation.Thisisanexampleof

a）Exchangeraterisk

b）Politicalrisk

c）Marketimperfections

d）Noneoftheabove,since$100,000=€80,000×$1.25/€1.00

7）SupposethatGreatBritainisamajorexportmarketforyourfirm,aU.S.basedMNC.IftheBritishpounddepreciatesagainsttheU.S.dollar,

a）Yourfirmwillbeabletochargemoreindollartermswhilekeepingpoundpricesstable.

b）YourfirmmaybepricedoutoftheU.K.market,totheextentthatyourdollarcostsstayconstantandyourpoundpriceswillrise.

c）ToprotectU.K.marketshare,yourfirmmayhavetocutthedollarpriceofyourgoodstokeepthepoundpricethesame.

d）b）andc）arebothcorrect.

8）Mostgovernmentsatleasttrytomakeitdifficultforpeopletocrosstheirbordersillegally.Thisbarriertothefreemovementoflaborisanexampleof

a）Informationasymmetry

b）Excessivetransactionscosts

c）Racialdiscrimination

d）Amarketimperfection

9）Whenindividualinvestorsbecomeawareofoverseasinvestmentopportunitiesandarewillingtodiversifytheirportfoliosinternationally,

a）theytradeonemarketimperfection,informationasymmetry,foranother,exchangeraterisk.

b）theybenefitfromanexpandedopportunityset.

c）Theyshouldnotbothertoreadortounderstandtheprospectus,sinceitsprobablywritteninaforeignlanguage

d）Theyshouldinvestonlyindollarsoreuros.

10）Nestlé,awell-knownSwisscorporation,

a）Hasbeenaparagonofvirtueinitsoppositiontoallformsofpoliticalrisk.

b）Atonetimeplacedrestrictionsonforeignownershipofitsstock.Whenitrelaxedtheserestrictions,thetotalmarketvalueofthefirmfell.

c）Atonetimeplacedrestrictionsonforeignownershipofitsstock.Whenitrelaxedtheserestrictions,therewasamajortransferofwealthfromforeignshareholderstoSwissshareholders.

d）Noneoftheabove

GoalsforInternationalFinancialManagement

11）Thegoalofshareholderwealthmaximization

a）isnotappropriatefornon-U.S.businessfirms

b）meansthatallbusinessdecisionsandinvestmentsthatafirmmakesaredoneforthepurposeofmakingtheownersofthefirmbetterofffinancially

c）isasub-objectivethefirmshouldattempttoachieveaftertheobjectiveofcustomersatisfactionismet

d）isinconflictwiththeprivatizationprocesstakingplaceinthird-worldcountries

12）Ascapitalmarketsarebecomingmoreintegrated,thegoalofshareholderwealthmaximization

a）Hasbeenalteredtoincludeothergoalsaswell.

b）Haslostouttoothergoals,evenintheU.S.

c）HasbeengivenincreasingimportancebymanagersinEurope.

d）Hasbeenshowntobeadeterrenttoraisingfundsabroad.

13）RecentcorporatescandalsatfirmssuchasEnron,WorldComandtheItalianfirmParmalat

a）Showthatmanagersmightbetemptedtopursuetheirownprivateinterestsattheexpenseofshareholders.

b）ShowthatItalianshareholdersarebetteratmonitoringmanagerialbehaviorthanU.S.shareholders.

c）Showthatwhite-collarcriminalshardlyevergetpunished.

d）Showthatsocialismisabetterwaytogothancapitalism.

14）WhilethecorporategovernanceproblemisnotconfinedtotheUnitedStates,

a）Itcanbeamuchmoreseriousprobleminmanyotherpartsoftheworld,wherelegalprotectionofshareholdersisweakornonexistent.

b）IthasreacheditshighpointintheUnitedStates.

c）TheU.S.legalsystem,withlawsuitsusedonlyasalastresort,ensuredthatanyconflictsofinterestwillsoonbeathingofthepast.

d）Noneoftheabove

15）Theownersofabusinessarethe

a）Taxpayers

b）Workers

c）Suppliers

d）Shareholders

16）Themassiveprivatizationthatiscurrentlytakingplaceinformerlysocialistcountries,willlikely

a）eventuallyenhancethestandardoflivingtothesecountries’citizens

b）dependonprivateinvestment

c）increasetheopportunitysetfacingthesecountries’citizens

d）alloftheabove

17）Afirmwithconcentratedownership

a）Maygiverisetoconflictsofinterestbetweendominantshareholdersandsmalloutsideshareholders.

b）Mayenjoymoreaccountingtransparencythanfirmswithdiffuseownershipstructures.

c）Isapartnership,neveracorporation.

d）TendstoexistoverseasbutnotintheU.S.

18）Theultimateguardiansofshareholderinterestinacorporation,arethe

a）Rankandfileworkers

b）Seniormanagement

c）Boardsofdirectors

d）Alloftheabove

19）IncountrieslikeFranceandGermany,

a）Managershaveoftenmadebusinessdecisionswithregardmaximizingmarketsharetotheexclusionofothergoals.

b）Managershaveoftenviewedshareholdersasoneofthe“stakeholders”ofthefirm,othersbeingemployees,customers,suppliers,banksandsoforth.

c）Managershaveoftenregardedtheprosperityandgrowthoftheircombines,orfamiliesofrelatedfirms,astheircriticalgoal.

d）Managershavetraditionallyembracedthemaximizationofshareholderwealthastheonlyworthygoal.

20）Whencorporategovernancebreaksdown

a）Shareholdersareunlikelytoreceivefairreturnsontheirinvestments

b）Managersmaybetemptedtoenrichthemselvesatshareholderexpense

c）Theboardofdirectorsisnotdoingitsjob

d）Alloftheabove

GlobalizationoftheWorldEconomy

21）Privatizationreferstoprocessof:

a）Havinggovernmentoperatebusinessesforthebettermentofthepublicsector

b）Governmentallowingtheoperationofprivatelyownedbusiness

c）Prohibitinggovernmentoperatedenterprises

d）Acountrydivestingitselfoftheownershipandoperationofabusinessventurebyturningitovertothefreemarketsystem

22）Deregulationofworldfinancialmarkets

a）Providedanaturalenvironmentforfinancialinnovations,likecurrencyfuturesandoptions.

b）Haspromotedcompetitionamongmarketparticipants.

c）HasencourageddevelopingcountriessuchasChile,Mexico,andKoreatoliberalizebyallowingforeignerstodirectlyinvestintheirfinancialmarkets.

d）Alloftheabove

23）Theemergenceofglobalfinancialmarketsisdueinnosmallpartto

a）Advancesincomputerandtelecommunicationstechnology

b）RigorousenforcementoftheSovietsystemofstateownershipofresourcesofproduction.

c）Governmentregulationandprotectionofinfantindustries.

d）Noneoftheabove.

24）Theeuro

a）isthecommoncurrencyofEurope

b）isdivisibleinto100cents,justliketheU.S.dollar

c）mayeventuallyhaveatransactiondomainlargerthantheU.S.dollar

d）Alloftheabove.

25）SinceitsinceptiontheeurohasbroughtaboutrevolutionarychangesinEuropeanfinance.Forexample

a）Byredenominatingcorporatebondsandstocksfrom12differentcurrenciesintoonecommoncurrency,theeurohasprecipitatedtheemergenceofcontinentwidecapitalmarketsinEuropethatarecomparabletoU.S.marketsindepthandliquidity.

b）Swissbankaccountsarealldenominatedineuro.

c）TheEuropeanbankingsectorhasbecomemuchmoreimportantasasourceoffinancingforEuropeanfirms.

d）Therehaveactuallynotbeenanyrevolutionarychanges.

26）SincetheendofWorldWarI,thedominantglobalcurrencyhasbeenthe

a）Britishpound

b）Japaneseyen

c）Euro

d）U.S.dollar

27）InDavidRicardo’stheoryofcomparativeadvantage,

a）Internationaltradeisazero-sumgameinwhichonetradingpartner’sgaincomesattheexpenseofanother’sloss.

b）Liberalizationofinternationaltradewillenhancethewelfareoftheworld’scitizens.

c）Isashort-runargument,notalong-runargument.

d）Hasbeensupersededbythenow-orthodoxviewofmercantilism.

28）TheWorldTradeOrganization,WTO,

a）Hasthepowertoenforcetherulesofinternationaltrade.

b）Coversagricultureandphysicalgoods,butnotservicesorintellectualpropertyrights.

c）RecentlyexpelledChinaforhumanrightsviolations.

d）RuledthatNAFTAistobethemodelforworldtradeintegration.

29）Privatization

a）Hasspurredatremendousincreaseincross-borderinvestment.

b）Hasallowedmanygovernmentstohavethefundstonationalizeimportantindustries.

c）Hasguaranteedthatnewownershipwillbelimitedtothelocalcitizens.

d）Has