International Financial Management- Quiz III tests understanding of corporate control in MNCs, market penetration theories like product cycle, and effects of currency fluctuations on trade. It assesses key skills in managing financial operations globally, relevant for finance professionals.
True
False
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True
False
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Maximize short-term earnings
Maximize shareholder wealth
Maximize international sales
None of the above
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USD/JPY
EUR/USD
EUR/JPY
GBP/USD
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Sold on an exchange; Offered by commercial banks
Sold on an exchange; Sold on an exchange
Offered by commercial banks; Sold on an exchange
Offered by commercial banks; Offered by commercial banks
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Norway
Mexico
Thailand
Libya
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Sold on an exchange; Offered by commercial banks
Sold on an exchange; Sold on an exchange
Offered by commercial banks; Sold on an exchange
Offered by commercial banks; Offered by commercial banks
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True
False
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Grown
Diminished
Remained unchanged
Cannot say
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Prevailing prices in locations where the foreign exchange markets have been open
Closing prices in Canada during the previous day
Officially set by central banks before the U.S. market opens
Closing prices in the U.S. during the previous day
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If Country A's inflation rate exceeds Country B's inflation rate, Country A's currency will weaken
If Country A's interest rate exceeds Country B's inflation rate, Country A's currency will weaken
If Country A's interest rate exceeds Country B's inflation rate, Country A's currency will strengthen
If Country B's inflation rate exceeds Country A's inflation rate, Country A's currency will weaken
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International reserve assets
US currency
Currency in Europe
None
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True
False
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Translation risk exposure
Transactions risk exposure.
Political risk exposure
Taxation.
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Find two currencies that are highly positively correlated; match the payables of the one currency to the receivables of the other currency
Use the forward market to sell forward whatever currencies you will receive
Use the forward market to buy forward whatever currencies you will receive
B and C
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A greater
An equal
A partial
A different
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An exchange rate set by central banks
An exchange rate set by governments
An exchange rate set by brokers
An exchange rate set by the supply and demand
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Closing down most of its plants in the U.S.
Producing more automobiles in the U.S.
Relying completely on Japanese suppliers for its parts.
Pricing its exports in dollars
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Trade
Pip
Selling price
Spread
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True
False
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True
False
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True
False
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$15
$16.5
16.50 euro
15 euro
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20,10
10,20
10,10
20,20
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Appreciate; 0.1938%
Depreciate; 0.1938%
Appreciate; 0.1942%
Depreciate; 0.1942%
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Investor monitoring
Stock options
Hostile takeover threat
All of the above
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Theory of comparative advantage
Imperfect markets theory
Product cycle theory
None of the above
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Reduce; Increase
Increase; Increase
Reduce; Reduce
Increase; Reduce
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Threat of hostile takeover
Acquisition of a foreign subsidiary
Executive compensation
Monitoring by large shareholders
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Downward
Upward
No
Upward or downward (depending on the size of the deficit)
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About 2.36 Canadian dollars
About .3621 Canadian dollars
About 2.51 Canadian dollars
About .3137 Canadian dollars
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Non existent; that is currencies were not exchanged, but gold was used to pay for all foreign transactions
Floating, but subject to central bank intervention
Fixed within narrow boundaries
Floating and not subject to central bank intervention
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U.S. investors could possibly benefit from covered interest arbitrage
British investors could possibly benefit from covered interest arbitrage
Neither U.S. nor British investors could benefit from covered interest arbitrage
Both (a) and (b)
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4.26%
4%
About 4.17%
About 3.85%
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True
False
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Increases, decreases
Increases, increases
Decreases, increases
Decreases, decreases
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One bank's bid price for a currency is less than another bank's bid price for the currency
One bank's ask price for a currency is less than another bank's ask price for the currency
One bank's bid price for a currency is greater than another bank's ask price for the currency
One bank's ask price for a currency is greater than another bank's bid price for the currency
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9.18%
9.81%
12.27%
12.72%
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Low profit margin
Low liquidity
Low Risk
High trade volume
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Export factoring.
Counter-trade
Netting
Re-invoicing.
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Greenfield Investment
Brownfield Investment
M & A
Listing in foreign Stock Market
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A home currency will depreciate if the current home interest rate exceeds the current foreign interest rate
A home currency will appreciate if the current home interest rate exceeds the current foreign interest rate
A home currency will appreciate if the current home inflation rate exceeds the current foreign inflation rate
A home currency will depreciate if the current home inflation rate exceeds the current foreign inflation rate
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The correlations between country economies are high
The correlations between country economies are low
The variability of country economy levels is high
B and C
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Bloomberg Bloomberg
Reuters
Bridge
MCX
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The MNC's degree of foreign involvement
The locations of foreign subsidiaries
The local (domestic) earnings of the MNC
The accounting methods used
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¥1000
¥10000
¥100000
¥100
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Strike price Strike price Strike price Strike price Strike price
Exercise price Exercise price Exercise price
Option premium
None of the above
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Short, long
Cost, revenue
Long, short
Spread, exchange
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