Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
although a foreign exchange transaction can involve any two currencies, most
transactions involve pounds on one side.
the east african community (eac) has been a successful integration effort in africa
during the last three decades.
mergers and acquisitions are quicker to execute than greenfield investments.
the bill of lading can function as collateral against which funds may be advanced to the
exporter by its local bank.
the single european act committed eu countries to adopting a common currency by
january 1, 1999.
In the 1990s, most of the borrowing by the companies who invested in Asian countries
had been in local currencies.
hofstedes research has been criticized because it was culturally bound.
the theory of comparative advantage suggests that trade is a positive-sum game in
which all countries that participate realize economic gains.
by using the global capital market, investors have a much wider range of investment
opportunities than in a purely domestic capital market.
like christianity and judaism, islam is a polytheistic religion.
capital flight is most likely to occur when the value of the domestic currency is
depreciating rapidly because of hyperinflation, or when a countrys economic prospects
are shaky in other respects.
an exclusive distribution channel is one that is difficult for outsiders to access.
in a monthly mortgage payment, the same amount is recorded as interest expense as in
the previous months payment.
the amount of value a firm creates is measured by the difference between its costs of
production and the price that it charges for its products.
the best way for a firm to overcome cultural barriers is to develop cross-cultural
literacy.
how can fdi undertaken to serve the home market stimulate economic growth in the
home country?
a.by freeing home-country resources to concentrate on activities where the home
country has a comparative advantage
b.by importing more goods and services than it is exporting
c.by circumventing trade barriers that may have prevented direct exports in the past
d.by reducing demand for home-country exports of capital equipment, intermediate
goods, and complementary products
A pegged exchange rate means that the value of a currency is ____.
A.fixed against other currencies based on an agreement
B.not determined by free market forces
C.fixed relative to a reference currency
D.independent of the valuations of other currencies
assume that the yen/dollar exchange rate quoted in tokyo at 3:00 p.m. is ¥120 = $1, and
the yen/dollar exchange rate quoted in new york at the same time is ¥123 = $1. a dealer
in new york uses dollars to purchase yen and then immediately sells the yen to buy
dollars in tokyo, thereby making a profit. the dealer has engaged in a(n):
a.currency swap
b.arbitrage
c.carry trade
d.straddle
identify the incorrect statement about the ppp theory.
a.it predicts that exchange rates are determined by relative prices
b.it yields accurate predictions of short-run movements in exchange rates
c.it best predicts exchange rate changes for countries with high rates of inflation
d.it assumes away transportation costs and barriers to trade
A German firm raising capital by selling stock through the London Stock Exchange is
an example of _____.
A.transnational financing
B.service export
C.indirect financing
D.transnational investment
warner company issued $1,600,000 of 6%, 10-year bonds on one of its interest dates for
$1,381,920 to yield an effective annual rate of 8%. the effective-interest method of
amortization is to be used. what amount of discount (to the nearest dollar) should be
amortized for the first interest period?
a.$45,084
b.$21,808
c.$29,108
d.$14,554
After World War II, worlds major industrial nations arranged their currencies against
each other at a mutually agreed on exchange rate. This is an example of a _____
system.
A.fixed exchange rate
B.dirty float exchange
C.pegged exchange rate
D.floating exchange rate
mantle publications publishes a golf magazine for women. the magazine sells for $4.00
a copy on the newsstand. yearly subscriptions to the magazine cost $36 per year (12
issues). during december 2011, expert publications sells 4,000 copies of the golf
magazine at newsstands and receives payment for 5,000 subscriptions for 2012.
financial statements are prepared monthly.
instructions
(a)prepare the december 2011 journal entries to record the newsstand sales and
subscriptions received.
(b)prepare the necessary adjusting entry on january 31, 2012. the january 2012 issue has
been mailed to subscribers.
which of the following persons believed that people should be treated as ends and never
purely as means to the ends of others?
a.john stuart mill
b.immanuel kant
c.milton friedman
d.david hume
_____ have/has the most to gain from reductions in agricultural tariffs and subsidies
that are a part of the Doha agenda.
A.The worlds developed nations
B.The worlds poorer nations
C.European nations
D.The United States
____ refers to the fact a firms pricing strategy in one market may have an impact on its
rivals pricing strategy in another market.
a.multipoint pricing
b.experience curve pricing
c.predatory pricing
d.competitive pricing
when using the euromarkets, companies ____.
a.have funds that lack liquidity
b.pay less for the loans
c.attract low interest rates
d.are secured from foreign exchange risks
norms refer to:
a.the social rules and guidelines that prescribe appropriate behavior in particular
situations
b.a system of values that are shared among a group of people
c.the routine conventions of everyday life
d.abstract ideas about what a group believes to be good, right, and desirable
which of the following is a measure that is developed by the united nations to measure
the quality of life in different nations?
a.gross national income
b.human development index
c.purchasing power parity
d.gross domestic product
country x, a poor country, invents a revolutionary electronic product. the country
markets this new product in other poor countries to garner large profits. this occurrence
is against the idea of ____.
a.product life-cycle theory
b.ricardos theory
c.theory of absolute advantage
d.theory of comparative advantage
Under a _____ exchange rate regime, a country will attach the value of its currency to
that of a major currency.
A.managed float
B.pegged
C.free float
D.currency board
hedge funds ____.
a.are public investment funds that invest in corporate bonds and shares
b.make long bets rather than short bets
c.are investment funds managed by the government
d.make short bets on assets that they think will decline in value
a pair of shoes costs £40 in britain. an identical pair costs $50 in the united states when
the exchange rate is £1 = $1.50. which of the following is correct?
a.the u.s. offers a better deal
b.the deal is the same in both countries
c.britain offers a better deal
d.a trader can make money by buying the shoes in britain and selling it in the u.s. at $50
NAFTA was passed only after:
A.China agreed to establish a higher minimum wage.
B.the U.S. agreed to limit the number of jobs that could be outsourced.
C.Mexico committed to tougher enforcement of environmental protection regulations.
D.Canada committed to establish new limits on FDI.
Identify a key accounting problem that international businesses are confronted with but
that does not confront purely domestic businesses. Substantiate with a suitable example.
what is systematic risk?
discuss the relationship between a firms control systems and a firms incentive system.
why is this relationship important?
What are the main steps in the control process of a typical firm?
what are location-specific advantages? how do they help explain fdi?
discuss how a firms marketing strategies may have to address differences in distribution
channels in other countries.
Explain the floating exchange rate regime. Give examples.
identify a major flaw associated with mercantilism.
