Test bank International Finance MCQ wordChap 10Word下载.docx

1、 D Topic:Operating Exposure Skill:Recognition2） What type of international risk exposure measures the change in present value of a firm resulting from changes in future operating cash flows caused by any unexpected change in exchange rates?transaction exposure accounting exposure operating exposure

2、translation exposure C 3） The goal of operating exposure analysis is to identify strategic operating techniques the firm might adopt to enhance value in the face of unanticipated exchange rate changes. TRUE Conceptual4） _ cash flows arise from intracompany and intercompany receivables and payments w

3、hile _ cash flows are payments for the use of loans and equity. Financing; operating Operating; financing accounting Accounting;B Operating and Financial Cash Flows 5） Operating cash flows may occur in different currencies and at different times, but financing cash flows may occur only in a single c

4、urrency. FALSE Recognition 6） Which of the following is NOT an example of a financial cash flow?parent invested equity capital interest on intrafirm lending payment for goods and services intrafirm principal payments Financial Cash Flows 7） Which of the following is NOT an example of an operating ca

5、sh flow?management fees and distributed overhead royalties and license fees rent and lease payments dividend paid to parent company Operating Cash Flows 8） _ exposure is far more important for the long-run health of a business than changes caused by _ or _ exposure. translation; transaction Transact

6、ion; operating; translation Translation;A Transaction; and Translation Exposure 9） Expected changes in foreign exchange rates should already be factored into anticipated operating results by management and investors. Expectations 10） Under conditions of equilibrium, management would use _ exchange r

7、ate as an unbiased predictor of future spot rates when preparing operating budgets. the current spot the forward rate the black market none of the above Forward Rate Conceptual 11） Simpson Sign Company based in Frostbite Falls, Minnesota has a 6-month C$100,000 contract to complete sign work in Winn

8、ipeg , Manitoba, Canada. The current spot rate is $1.02/C$ and the forward rate is $1.01/C$. Under conditions of equilibrium, management would use today _ when preparing operating budgets. $102,000 $101,000 $100,000 None of the above Analytical12） In equilibrium, expected cash flow to amortize inter

9、national debt obligations should reflect the _. current spot rate the spot rate when the loan was contracted the international Fisher effect Exchange Rate Equilibrium 13） From an investors perspective, if the foreign exchange market is efficient, information about expected changes in exchange rates

10、should be widely known and thus reflected in a firms market value. Only _ in exchange rates or an _ foreign exchange market, should cause market value to change. expected changes; efficient unexpected changes; inefficient 14） Which of the following is NOT an example of diversifying operations?divers

11、ifying sales diversifying location of operations raising funds in more than one country sourcing raw materials in more than one country Foreign Exchange Diversification 15） Which of the following is NOT an example of diversification in financing?raising funds in more than one market All of the above

12、 qualify. 16） Management must be able to predict disequilibria in international markets to take advantage of diversification strategies. 17） When disequilibria in international markets occur, management can take advantage by doing nothing if they are already diversified and able to realize beneficia

13、l portfolio effects. recognizing disequilibria faster than purely domestic competitors. shifting operational of financing activities to take advantage of the disequilibria. all of the above. 18） Purely domestic firms will be at a disadvantage to MNEs in the event of market disequilibria because dome

14、stic firms lack comparative data from its own sources. international firms are already so large. all of the domestic firms raw materials are imported. None of the above. Domestic firms are not at a disadvantage. 19） Which of the following is probably NOT an advantage of foreign exchange risk managem

15、ent?the reduction of the variability of cash flows due to domestic business cycles increased availability of capital reduced cost of capital All of the above are potential advantages of foreign exchange risk management. 20） Which of the following is NOT an example of a form of political risk that mi

16、ght be avoided or reduced by foreign exchange risk management?expropriation of assets destruction of raw materials through natural disaster war unfavorable legal changes Political Risk 21） Which of the following is NOT identified by your authors as a proactive management technique to reduce exposure

17、 to foreign exchange risk?matching currency cash flows currency swaps remaining a purely domestic firm parallel loans Management of Foreign Exchange Risk 22） Which one of the following management techniques is likely to best offset the risk of long-run exposure to receivables denominated in a partic

18、ular foreign currency?borrow money in the foreign currency in question lend money in the foreign currency in question increase sales to that country increase sales in this country 23） Which one of the following management techniques is likely to best offset the risk of long-run exposure to payables

19、denominated in a particular foreign currency?rely on the Federal Reserve Board to enact monetary policy favorable to your exposure risk 24） The particular strategy of trying to offset stable inflows of cash from one country with outflows of cash in the same currency is known as _. hedging diversific

20、ation matching balancing 25） Which of the following is NOT an acceptable hedging technique to reduce risk caused by a relatively predictable long-term foreign currency inflow of Japanese yen?Import raw materials from Japan denominated in yen to substitute for domestic suppliers. Pay suppliers from o

21、ther countries in yen. Import raw materials from Japan denominated in dollars. Acquire debt denominated in yen. 26） An MNE has a contract for a relatively predictable long-term inflow of Japanese yen that the firm chooses to hedge by seeking out potential suppliers in Japan. This hedging strategy is referred to as _. a natural hedge currency-switching Natural Hedge 27） An MNE has a contract for a relatively predictable long-term inflow of Japanese yen that the firm chooses to hedge by paying for imports from Canada in Japanese yen. This hedging strateg