Archives: Quiz
978-1259918940 Test Bank Chapter 4 Part 3
80) You are comparing two annuities with equal present values. The applicable discount rate is 6.5 percent. One annuity will pay $2,000 annually, starting today, for 20 years. The second annuity will pay annually, starting one year from today, for […]
978-1259918940 Test Bank Chapter 4 Part 2
42) Leo received $7,500 today and will receive another $5,000 two years from today. If he invests these funds immediately at 11.5 percent, what will his investments be worth five years from now? A) $18,758.04 B) $18,806.39 C) $19,856.13 D) […]
978-1259918940 Test Bank Chapter 4 Part 1
Corporate Finance, 12e (Ross) Chapter 4 Discounted Cash Flow Valuation 1) The net present value of a project is equal to the: A) present value of the future cash flows. B) present value of the future cash flows minus the […]
978-1259918940 Test Bank Chapter 3 Part 3
84) Upriver Tours has balance sheet values of: Inventory $70,500; accounts receivable $50,700; accounts payable $58,900; cash $32,300, notes payable $20,000, long-term debt $134,700, and net fixed assets $504,500. What is the current ratio? A) 1.95 B) .95 C) 2.11 […]
978-1259918940 Test Bank Chapter 3 Part 2
58) The maximum rate at which a firm can grow while maintaining a constant debt-equity ratio is best defined by its: A) rate of return on assets. B) internal rate of growth. C) average historical rate of growth. D) rate […]
978-1259918940 Test Bank Chapter 3 Part 1
Corporate Finance, 12e (Ross) Chapter 3 Financial Statements and Cash Flow 1) Which statement expresses all relative account values as a percentage of total assets? A) Pro forma balance sheet B) Common-size income statement C) Statement of cash flows D) […]
978-1259918940 Test Bank Chapter 2 Part 3
83) Thompson’s Jet Skis has operating cash flow of $11,618. Depreciation is $2,345 and interest paid is $395. A net total of $485 was paid on long-term debt. The firm spent $6,180 on fixed assets and decreased net working capital […]
978-1259918940 Test Bank Chapter 2 Part 2
60) One of the reasons why cash flow analysis is popular is because: A) cash flows are more subjective than net income. B) deferred taxes require future cash payment. C) cash flows are strictly defined by Generally Accepted Accounting Principles […]
978-1259918940 Test Bank Chapter 2 Part 1
Corporate Finance, 12e (Ross) Chapter 2 Financial Statements and Cash Flow 1) Which one of these accounts appears on the right-hand side of a balance sheet? A) Property, plant, and equipment B) Accumulated retained earnings C) Accumulated depreciation D) Cash […]
978-1259918940 Test Bank Chapter 1 Part 2
36) Financial managers primarily create firm value by: A) maximizing current dividends. B) investing in assets that generate cash in excess of their cost. C) lowering the earnings per share. D) increasing the firm’s market share. E) maximizing current sales. […]
978-1259918940 Test Bank Chapter 1 Part 1
Corporate Finance, 12e (Ross) Chapter 1 Introduction to Corporate Finance 1) The treasurer and the controller of a corporation generally report to the: A) board of directors. B) chairman of the board. C) chief executive officer. D) president. E) chief […]
978-1259717789 Test Bank Chapter 21 Part 2
49) Fundamentally, there are two types of tax jurisdiction. A) The worldwide and the territorial B) The residential and the visiting C) The passive and the active income D) The earned and the unearned Answer: A Topic: National Tax Environments […]
978-1259717789 Test Bank Chapter 21 Part 1
International Financial Management, 8e (Eun) Chapter 21 International Tax Environment and Transfer Pricing 1) An income tax is a direct tax. Answer: TRUE Topic: Income Tax Accessibility: Keyboard Navigation 2) The two main objectives of taxation are A) tax neutrality […]
978-1259717789 Test Bank Chapter 20 Part 2
63) The time from acceptance to maturity on a $2,000,000 banker’s acceptance is 90 days. The importing bank’s acceptance commission is 1.25 percent and the market rate for 90-day B/As is 6 percent. Determine the bond equivalent yield the importer’s […]
978-1259717789 Test Bank Chapter 20 Part 1
International Financial Management, 8e (Eun) Chapter 20 International Trade Finance 1) Forfaiting (forfeiting) meets Islamic finance practices. Answer: TRUE Topic: International Finance in Practice: First Islamic Forfaiting Fund Set Up Accessibility: Keyboard Navigation 2) International trade is more difficult and […]
978-1259717789 Test Bank Chapter 19 Part 3
60) When engaged in bilateral netting A) total inter-affiliate receipts will always equal total inter-affiliate disbursements. B) we can reduce the number of foreign exchange transactions among an MNC with N affiliates to or less. C) each affiliate nets all […]
978-1259717789 Test Bank Chapter 19 Part 2
21 37) For a recent month, the following payments matrix of inter-affiliate cash flows was forecasted: Disbursement From: Receipts by: France Britain U.S. France € 500 € 800 Britain £ 300 £ 400 U.S. $ 1,000 $ 500 The spot […]
978-1259717789 Test Bank Chapter 19 Part 1
International Financial Management, 8e (Eun) Chapter 19 Multinational Cash Management 1) Many of the skills necessary for effective cash management are the same regardless of whether the firm has only domestic operations or if it operates internationally. Answer: FALSE Topic: […]
978-1259717789 Test Bank Chapter 18 Part 4
83) A French firm is considering a one-year investment in the United Kingdom with a pound-denominated rate of return of i£ = 15%. The firm’s local cost of capital is i€ = 10%. The project costs £1,000 and will return […]
978-1259717789 Test Bank Chapter 18 Part 3
69) Consider the following international investment opportunity. It involves a gold mine that can be opened at a cost, then produces a positive cash flow, but then requires environmental clean-up. The current exchange rate is $1.60 = €1.00. The inflation […]
978-1259717789 Test Bank Chapter 18 Part 2
33) Consider a project of the Cornell Haul Moving Company, the timing and size of the incremental after-tax cash flows (for an all-equity firm) are shown below in millions: The firm’s tax rate is 34 percent; the firm’s bonds trade […]
978-1259717789 Test Bank Chapter 18 Part 1
International Financial Management, 8e (Eun) Chapter 18 International Capital Budgeting 1) The financial manager’s responsibility involves A) increasing the per share price of the company’s stock at any cost and by any means, ways and fashion that is possible. B) […]
978-1259717789 Test Bank Chapter 17 Part 2
56) Compute the debt-to-equity ratio for a firm that has a debt-to-value ratio of 60 percent. A) 1/3 B) 2/5 C) 3/2 D) none of the options Answer: C Explanation: Solve for equity = 3/(3 + X) = 3/5; X […]
978-1259717789 Test Bank Chapter 17 Part 1
International Financial Management, 8e (Eun) Chapter 17 International Capital Structure and the Cost of Capital 1) The cost of capital is A) the minimum rate of return an investment project must generate in order to pay its financing costs. B) […]
978-1259717789 Test Bank Chapter 16 Part 2
57) Which of the following statements is true about product life cycle theory? A) In the early stages of the product life cycle, the demand for the new product is relatively insensitive to the price and thus a pioneering firm […]
978-1259717789 Test Bank Chapter 16 Part 1
1 Copyright © 2018 McGraw-Hill International Financial Management, 8e (Eun) Chapter 16 Foreign Direct Investment and Cross-Border Acquisitions 1) In the early 1980s, Honda, the Japanese automobile company, built an assembly plant in Marysville, Ohio, and began to produce cars […]
978-1259717789 Test Bank Chapter 15 Part 2
60) Hedge fund advisors typically receive a “2-plus-twenty” management fee A) meaning 2 percent per year of the assets under management, plus performance fee 20 percent of any capital appreciation. B) meaning 2 percent per year of the assets under […]
978-1259717789 Test Bank Chapter 15 Part 1
International Financial Management, 8e (Eun) Chapter 15 International Portfolio Investment 1) Under the investment dollar premium system, A) U.K. residents received a premium over the prevailing commercial exchange rate when they sold foreign securities and repatriated the funds to the […]
978-1259717789 Test Bank Chapter 14 Part 3
76) Consider the situation of firm A and firm B. The current exchange rate is $1.50/€. Firm A is a U.S. MNC and wants to borrow €40 million for 2 years. Firm B is a French MNC and wants to […]
978-1259717789 Test Bank Chapter 14 Part 2
32) Company X wants to borrow $10,000,000 floating for 5 years; company Y wants to borrow £5,000,000 fixed for 5 years. The exchange rate is $2 = £1 and is not expected to change over the next 5 years. Their […]
978-1259717789 Test Bank Chapter 14 Part 1
International Financial Management, 8e (Eun) Chapter 14 Interest Rate and Currency Swaps 1) The term interest rate swap A) refers to a “single-currency interest rate swap” shortened to “interest rate swap.” B) involves “counterparties” who make a contractual agreement to […]
978-1259717789 Test Bank Chapter 13 Part 2
57) A type of non-continuous exchange trading system is crowd trading. A) Unlike a call market in which there is a common price for all trades, several bilateral trades may take place at different prices in crowd trading. B) Unlike […]
978-1259717789 Test Bank Chapter 13 Part 1
International Financial Management, 8e (Eun) Chapter 13 International Equity Markets 1) In a dealer market, the broker takes the trade through the dealer, who participates in trades as a principal by buying and selling the security for his own account. […]
978-1259717789 Test Bank Chapter 12 Part 2
54) The floor value of a convertible bond A) is the “straight bond” value. B) is the conversion value. C) is the minimum of the “straight bond” value and the conversion value. D) is the maximum of the “straight bond” […]
978-1259717789 Test Bank Chapter 12 Part 1
International Financial Management, 8e (Eun) 1) Eurobonds sold in the United States may not be sold to U.S. citizens. Answer: TRUE Topic: National Security Regulation Accessibility: Keyboard Navigation 2) Domestic bonds account for the largest share of outstanding bonds, equaling […]
978-1259717789 Test Bank Chapter 11 Part 2
54) In reference to capital requirements, A) bank capital adequacy refers to the amount of equity capital a bank holds as reserves against impaired loans. B) bank capital adequacy refers to the amount of debt capital a bank holds as […]
978-1259717789 Test Bank Chapter 11 Part 1
International Financial Management, 8e (Eun) Chapter 11 International Banking and Money Market 1) Edge Act banks are not prohibited from owning equity in business corporations, unlike domestic commercial banks. Answer: TRUE Topic: Edge Act Banks Accessibility: Keyboard Navigation 2) An […]
978-1259717789 Test Bank Chapter 10 Part 2
47) Financial Accounting Standards Board (FASB) Statements 8 and 52 relate to the translation methods. The following outlines the objectives and descriptions of the two statements. (i) Measure in dollars an enterprise’s assets, liabilities, revenues, or expenses that are denominated […]
978-1259717789 Test Bank Chapter 10 Part 1
International Financial Management, 8e (Eun) Chapter 10 Management of Translation Exposure 1) Under the monetary/nonmonetary method, revenue and expense items associated with nonmonetary accounts, such as cost of goods sold and depreciation, are translated at the historical rate associated with […]
978-1259717789 Test Bank Chapter 9 Part 3
62) Consider a U.S.-based MNC with a wholly-owned Italian subsidiary. Following a depreciation of the dollar against the euro, which of the following conclusions are correct? A) The cash flow in euro could be altered due an alteration in the […]
978-1259717789 Test Bank Chapter 9 Part 2
46) A U.S. firm holds an asset in Great Britain and faces the following scenario: State 1 State 2 State 3 Probability 25% 50% 25% Spot rate $ 2.50 /£ $ 2.00 /£ $ 1.60 /£ P* £ 1,800 £ […]
978-1259717789 Test Bank Chapter 9 Part 1
International Financial Management, 8e (Eun) Chapter 9 Management of Economic Exposure 1) Suppose the U.S. dollar substantially depreciates against the Japanese yen. The change in exchange rate A) can have significant economic consequences for U.S. firms. B) can have significant […]
978-1259717789 Test Bank Chapter 8 Part 3
44) Your firm is a Swiss exporter of bicycles. You have sold an order to a British firm for £1,000,000 worth of bicycles. Payment from the British firm (in pounds sterling) is due in 12 months. Use a money market […]
978-1259717789 Test Bank Chapter 8 Part 2
21 Copyright © 2018 McGraw-Hill Answer: C Explanation: 100 contracts = £1,000,000 / £10,000; $2,000,000 = £1,000,000 × $2; Solve the proportion for X: ($2,000,000 / X) = ($1.60 / €1), where X = €1,250,000. Next, €1,250,000 / €10,000 = […]
978-1259717789 Test Bank Chapter 8 Part 1
International Financial Management, 8e (Eun) Chapter 8 Management of Transaction Exposure 1) Transaction exposure is defined as A) the sensitivity of realized domestic currency values of the firm’s contractual cash flows denominated in foreign currencies to unexpected exchange rate changes. […]
978-1259717789 Test Bank Chapter 7 Part 2
56) Find the hedge ratio for a call option on £10,000 with a strike price of €12,500. The current exchange rate is €1.50/£1.00 and in the next period the exchange rate can increase to €2.40/£ or decrease to €0.9375/€1.00 (i.e. […]
978-1259717789 Test Bank Chapter 7 Part 1
International Financial Management, 8e (Eun) Chapter 7 Futures and Options on Foreign Exchange 1) A put option on $15,000 with a strike price of €10,000 is the same thing as a call option on €10,000 with a strike price of […]
978-1259717789 Test Bank Chapter 6 Part 2
42) Forward parity states that A) any forward premium or discount is equal to the expected change in the exchange rate. B) any forward premium or discount is equal to the actual change in the exchange rate. C) the nominal […]
978-1259717789 Test Bank Chapter 6 Part 1
International Financial Management, 8e (Eun) Chapter 6 International Parity Relationships and Forecasting Foreign Exchange Rates 1) An arbitrage is best defined as A) a legal condition imposed by the CFTC. B) the act of simultaneously buying and selling the same […]
978-1259717789 Test Bank Chapter 5 Part 2
67) Restate the following one-, three-, and six-month outright forward American term bid-ask quotes in forward points: S($/SFr) = 0.8500 − 0.8505 F1($/SFr) = 0.8505 − 0.8505 F3($/SFr) = 0.8510 − 0.8520 F6($/SFr) = 0.8515 − 0.8530 A) Forward Point […]