Multinational Finance Test Bank All

Multinational Business Finance, 14e (Eiteman)

Chapter 1 Multinational Financial Management: Opportunities and Challenges

1.1 Financial Globalization and Risk

1) Financial globalization has not resulted in:

A) continuing imbalances of balance of payments.

B) an increase in quantity and speed in the flow of capital across the world.

C) capital markets less open and a decrease in the availability of capital for many organizations.

D) uniform ways of ownership, control, and governance across the world.

Answer: D

Diff: 1

L.O.: 1.1 Financial Globalization and Risk

Skill: Recognition

AACSB: Application of knowledge

2) BRICs is a term used in international finance to represent assets that are considered to be

inexpensive and sturdy, but fundamentally unsound and and incapable of coping with the

upheavals now apparent in international financial markets.

Answer: FALSE

Diff: 1

L.O.: 1.1 Financial Globalization and Risk

Skill: Recognition

AACSB: Application of knowledge

3) Multinational enterprises (MNEs) are firms, both for profit companies and not-for-profit

organizations, that have operations in more than one country, and conduct their business through

foreign subsidiaries, branches, or joint ventures with host country firms.

Answer: TRUE

Diff: 1

L.O.: 1.1 Financial Globalization and Risk

Skill: Recognition

AACSB: Application of knowledge

4) Ownership, control, and governance changes radically across the world. The publicly traded

company is not the dominant global business organization—the privately held or family-owned

business is the prevalent structure—and their goals and measures of performance differ

dramatically.

Answer: TRUE

Diff: 1

L.O.: 1.1 Financial Globalization and Risk

Skill: Recognition

AACSB: Application of knowledge

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5) The theme dominating global financial markets today is the complexity of risks associated

with financial globalization. List and explain examples of the complexity of risks affecting the

leading...