Business Finance

international Business Finance, 12e (Eiteman, et al) Chapter 1 Globalization and the transnational first step 1. 1 Globalization and Creating Value in the Multinational endeavor eightfold Choice 1) Which of the following ar critical to a faithful trying to reach the top of the firm harbor pyramid? A) An establish market place. B) gritty quality strategic management. C) Access to capital. D) all(a) of the higher up serve A Diff 2 proceeds 1. 1 Globalization and Creating Value in the Multinational Enterprise Skill Conceptual 2) A well-established, large U.S. -based MNE will probably NOT be able to overcome which of the following obstacles to maximizing firm value? A) An open market place. B) High quality strategic management. C) Access to capital. D) none of the above dissolvent D Diff 2 exit 1. 1 Globalization and Creating Value in the Multinational Enterprise Skill cognition 3) A well-established, large China-based MNE will probably be most adversely affected by which of the following elements of firm value? A) An open marketplace. B) High-quality strategic management. C) Access to capital.D) Access to qualified labor pool. Answer A Diff 2 Topic 1. 1 Globalization and Creating Value in the Multinational Enterprise Skill Conceptual 4) A well-established, large, Brazil-based MNE will probably be most adversely affected by which of the following elements of firm value? A) An open marketplace. B) High-quality strategic management. C) Access to capital. D) Access to qualified labor pool. Answer C Diff 2 Topic 1. 1 Globalization and Creating Value in the Multinational Enterprise Skill Conceptual True/ pretended ) Three necessary conditions for a firm to reach the top of the firm value pyramid are an open market place, high quality strategic management, and access to capital. Answer rightful(a) Diff 1 Topic 1. 1 Globalization and Creating Value in the Multinational Enterprise Skill Conceptual 2) relative benefit is one of the underlying principles dr iving the growth of global business. Answer align Diff 1 Topic 1. 1 Globalization and Creating Value in the Multinational Enterprise Skill Recognition Essay 1) List and explain three strategic motives why firms become multinationals and reelect an example of each.Answer The authors provide 5 strategic motives for firms to become multinationals market seekers, raw materials seekers, production efficiency seekers, knowledge seekers, and political safety seekers. Market seekers are looking for for more consumers for their products such as automobiles or steel. Knowledge seekers may be looking for an educated work force similar to the way firms seeking R and D set up shop in university towns. rude materials seekers may be after commodities such as oil or copper. Production efficiencies may occur in countries like Mexico that rich person capable workers and lower wages.Political safety seekers are looking for countries that will not expropriate their assets, so they may hang-up a way from countries that in the post have engaged in such activities. Diff 3 Topic 1. 1 Globalization and Creating Value in the Multinational Enterprise Skill Conceptual 1. 2 The Theory of comparative proceeds triple Choice 1) The theory that suggests specialization by country can increase worldwide production is ________. A) the theory of proportional advantage B) the theory of remote direct investment C) the international Fisher effect D) the theory of working capital managementAnswer A Diff 2 Topic 1. 2 The Theory of Comparative Advantage Skill Recognition 2) Which of the following is NOT a reason governments interfere with comparative advantage? A) Governments attempt to achieve full employment. B) Governments get up economic development. C) National self-sufficiency in defense-related industries. D) All are reasons governments interfere with comparative advantage. Answer D Diff 2 Topic 1. 2 The Theory of Comparative Advantage Skill Recognition 3) Which of the following f actors of production DO NOT flow freely between countries? A) Raw materialsB) fiscal capital C) (Non-military) Technology D) All of the above factors of production flow freely among countries. Answer A Diff 1 Topic 1. 2 The Theory of Comparative Advantage Skill Recognition 4) Which of the following would NOT be a way to implement comparative advantage? A) IBM exports computers to Egypt. B) Computer hardware is designed in the United States simply manufactured and assembled in Korea. C) Water of the greatest purity is obtained from wells in Oregon, bottled, and exported worldwide. D) All of the above are examples of ways to implement comparative advantage.Answer D Diff 2 Topic 1. 2 The Theory of Comparative Advantage Skill Conceptual 5) Of the following, which would NOT be considered a way that government interferes with comparative advantage? A) Tariffs. B) Managerial skills. C) Quotas. D) Other non-tariff restrictions. Answer B Diff 2 Topic 1. 2 The Theory of Comparative Advantag e Skill Recognition True/ delusive 1) The theory of comparative advantage owes it origins to Ben Bernanke as described in his book The Wealth of Bankers. Answer phony Diff 1 Topic 1. 2 The Theory of Comparative Advantage Skill Recognition ) international trade might have approached the comparative advantage model in the 19th century, and it does so even more today. Answer FALSE Diff 2 Topic 1. 2 The Theory of Comparative Advantage Skill Conceptual 3) Comparative advantage shifts over time as less developed countries become more developed and realize their latent opportunities. Answer TRUE Diff 2 Topic 1. 2 The Theory of Comparative Advantage Skill Recognition 4) Comparative advantage in the 21st century is based more on services and their cross border facilitation by telecommunications and the Internet.Answer TRUE Diff 1 Topic 1. 2 The Theory of Comparative Advantage Skill Recognition 5) Comparative advantage was once the cornerstone of international trade theory, but today it is archaic, simplistic, and irrelevant for explaining investment choices made by MNEs. Answer FALSE Diff 2 Topic 1. 2 The Theory of Comparative Advantage Skill Recognition 1. 3 What Is Different about Global Financial Management? Multiple Choice 1) Which of the following domestic financial instruments have NOT been modified for give in international financial management? A) Currency options and futures.B) Interest rate and currency swaps. C) Letters of credit. D) All of the above are domestic financial instruments that have also been modified for use in international financial markets. Answer D Diff 2 Topic 1. 3 What Is Different about Global Financial Management? Skill Recognition True/False 1) MNEs must modify finance theories like cost of capital and capital budgeting because of foreign complexities. Answer TRUE Diff 2 Topic 1. 3 What Is Different about Global Financial Management? Skill Recognition 1. 4 Market Imperfections A Rationale for the being of the Multinational FirmMult iple Choice 1) In determining why a firm becomes multinational there are many reasons. One reason is that the firm is a market seeker. Which of the following is NOT a reason why market seeking firms produce in foreign countries? A) Satisfaction of local demand in the foreign country. B) Satisfaction of local demand in the domestic markets. C) Political safely and small likelihood of government expropriation of assets. D) All of the above are market-seeking activities. Answer C Diff 2 Topic 1. 4 Market Imperfections A Rationale for the Existence of the Multinational Firm Skill Recognition ) ________ investments are designed to promote and enhance the growth and profitability of the firm. ________ investments are designed to deny those same opportunities to the firms competitors. A) Conservative Aggressive B) Defensive proactive C) Proactive Defensive D) Aggressive Proactive Answer C Diff 2 Topic 1. 4 Market Imperfections A Rationale for the Existence of the Multinational Firm Skill R ecognition True/False 1) For firms competing in a world characterized by oligopolistic competition, strategic motives can be subdivided into proactive and defensive investments. Answer TRUEDiff 1 Topic 1. 4 Market Imperfections A Rationale for the Existence of the Multinational Firm Skill Recognition 2) Defensive measures are designed to enhance growth and profitability of the firm itself. Answer FALSE Diff 1 Topic 1. 4 Market Imperfections A Rationale for the Existence of the Multinational Firm Skill Recognition 1. 5 The Globalization extremity Multiple Choice 1) The phase of the globalization process characterized by imports from foreign suppliers and exports to foreign buyers is called the A) domestic phase. B) multinational phase. C) international trade phase.D) import-export banking phase. Answer C Diff 2 Topic 1. 5 The Globalization Process Skill Recognition 2) The authors describe the multinational phase of globalization for a firm as one characterized by the A) will power of assets and enterprises in foreign countries. B) electromotive force for international competitors or suppliers even though all accounts are with domestic firms and are denominated in dollars. C) imports from foreign suppliers and exports to foreign buyers. D) exigency that all employees be multilingual. Answer A Diff 2 Topic 1. 5 The Globalization Process Skill Recognition ) A firm in the International Trade Phase of Globalization A) makes all foreign payments in foreign currency units and all foreign receipts in domestic currency units. B) receives all foreign receipts in foreign currency units and makes all foreign payments in domestic currency units. C) bears direct foreign exchange risk. D) none of the above Answer C Diff 2 Topic 1. 5 The Globalization Process Skill Conceptual 4) Of the following, which was NOT mentioned by the authors as an increase in the demands of financial management services due to increased globalization by the firm?A) Evaluation of the credit qualit y of foreign buyers and sellers. B) Foreign consumer method of payment preferences. C) commendation risk management. D) Evaluation of foreign exchange risk. Answer B Diff 2 Topic 1. 5 The Globalization Process Skill Recognition 5) Of the following, which was NOT mentioned by the authors as an increase in the demands of financial management services due to increased globalization by the firm? A) Evaluation of the credit quality of foreign buyers and sellers. B) Foreign consumer method of payment preferences. C) Credit risk management.D) Evaluation of foreign exchange risk. Answer B Diff 2 Topic 1. 5 The Globalization Process Skill Recognition 6) The authors describe the multinational phase of globalization for a firm as one characterized by the A) ownership of assets and enterprises in foreign countries. B) potential for international competitors or suppliers even though all accounts are with domestic firms and are denominated in dollars. C) imports from foreign suppliers and export s to foreign buyers. D) requirement that all employees be multilingual. Answer A Diff 2 Topic 1. 5 The Globalization ProcessSkill Recognition 7) The twin agency problems limiting financial globalization are caused by these two groups playacting in their own self-interests rather than the interests of the firm. A) Rulers of sovereign states and unsavory customs officials. B) Corporate insiders and attorneys. C) Corporate insiders and rulers of sovereign states. D) Attorneys and unsavory customs officials. Answer C Diff 2 Topic 1. 5 The Globalization Process Skill Recognition True/False 1) Typically, a firm in its domestic stage of globalization has all financial transactions in its domestic currency.Answer TRUE Diff 1 Topic 1. 5 The Globalization Process Skill Conceptual 2) Typically, a greenfield investment abroad is considered a greater foreign investment having a greater foreign presence than a joint venture with a foreign firm. Answer TRUE Diff 1 Topic 1. 5 The Globalization Pro cess Skill Recognition 3) The authors argue that financial inefficiency caused by influential insiders may prove to be an increasingly difficult barrier to international finance. Answer TRUE Diff 2 Topic 1. 5 The Globalization Process Skill Conceptual