1) the main cost of european monetary union is
a.the loss of national monetary and exchange rate policy independence
b.increased exchange rate uncertainty
c.lessened political integration
d.none of the above
2) generally speaking, a country would be more prone to asymmetric shocks
a.the more diversified and less trade-dependent its economy is
b.the less diversified and more trade-dependent its economy is
c.the less diversified and less trade-dependent its economy is
d.the more diversified and more trade-dependent its economy is
3) following the adoption of the cadbury code of best practice joint ceo/cob positions
declined
a.from 27 percent of the companies before the adoption to 15 percent afterwards
b.from 37 percent of the companies before the adoption to 15 percent afterwards
c.from 47 percent of the companies before the adoption to 15 percent afterwards
d.from 57 percent of the companies before the adoption to 15 percent afterwards
4) today’s settlement price on a chicago mercantile exchange (cme) yen futures contract
is $0.8011/¥100. your margin account currently has a balance of $2,000. the next three
days’ settlement prices are $0.8057/¥100, $0.7996/¥100, and $0.7985/¥100. (the
contractual size of one cme yen contract is ¥12,500,000). if you have a short position in
one futures contract, the changes in the margin account from daily marking-to-market
will result in the balance of the margin account after the third day to be
a.$1,425
b.$2,000
c.$2,325
d.$3,425
5) withholding tax rates imposed through tax treaties are
a.bilateral
b.multilateral
c.netted
d.none of the above
6) while maintaining multiple production sites does provide a firm valuable options,
a.a firm may miss out on economies of scope
b.a firm may miss out on economies of scale
c.a firm may find that exchange rate changes can fully offset the advantage of multiple
manufacturing sites
d.both a and b
7) it is important for society as a whole to solve the agency problem, since the agency
problem
a.leads to waste of scarce resources
b.hampers capital market functions
c.retards economic growth
d.all of the above
8) as a measure of “liquidity”,
a.generally, the lower the turnover, the greater the liquidity of a secondary stock market
b.generally, the higher the turnover, the greater the liquidity of a secondary stock
market
c.the more a financial asset gurgles when shook the greater the liquidity
d.none of the above
9) there are three basic types of taxation that national governments throughout the
world use:
a.income tax, withholding tax, and value-added tax
b.property tax, wealth tax, and death tax
c.import quotas, duties, and tariffs
d.tariffs, ad valorem taxes, and income taxes
10) the ultimate guardians of shareholder interest in a corporation, are the
a.rank and file workers
b.senior management
c.boards of directors
d.all of the above
11) which of the following are correct?
a.
b.
c.
d.all of the above are correct
12) a bank may establish a multinational operation for the reason of home country
information services. the underlying rationale being that
a.by maintaining foreign branches and foreign currency balances, banks may reduce
transaction costs and foreign exchange risk on currency conversion if government
controls can be circumvented
b.local firms may be able to obtain from a foreign subsidiary bank operating in their
country more complete trade and financial market information about the subsidiary’s
home country than they can obtain from their own domestic banks
c.the foreign bank subsidiary can draw on the parent bank’s knowledge of personal
contacts and credit investigations for use in that foreign market
d.greater stability of earnings is possible with international diversification. offsetting
business and monetary policy cycles across nations reduces the country-specific risk of
any one nation
13) because __________ do not have to meet national security regulations, name
recognition of the issuer is an extremely important factor in being able to source funds
in the international capital market.
a.eurobonds
b.foreign bonds
c.bearer bonds
d.registered bonds
14) as a mode of entry into a foreign market, cross-border acquisition
a.involves building new production facilities in a foreign country
b.offer faster speed over greenfield investment
c.can offer access to proprietary assets
d.both b and c
15) in 2012 the united states had a current account deficit. the current account deficit
implies that the united states
a.had a surplus on legal consulting and engineering services
b.produced more output than it consumed
c.consumed more output than it produced
d.none of the above
16) the voting premium, defined as the total vote value (value of a vote times the
number of votes) as a proportion of the firm’s equity market value is only about 2
percent in the united states and 36 percent in mexico, suggesting that in mexico,
a.dominant shareholders extract substantial private benefits of control
b.dominant shareholders overpay and thus fail to extract substantial private benefits
c.minority shareholders share in the private benefits of control
d.none of the above
17) fdi can take the form of
a.greenfield investment
b.cross-border m&a
c.establishing new production facilities in a foreign country
d.all of the above
18) the authoritative body in the united states that specifies accounting policy for u.s.
business firms and certified public accounting firms.
a.the federal accounting standards board (fasb)
b.the international accounting standards board (iasb)
c.the financial accounting standards board (fasb)
d.the securities and exchange commission (sec)