Foreign Exchange Market and Currency

25024 Words101 Pages
Chapter 1 Multinational Financial Management:An Overview 1. The commonly accepted goal of the MNC is to: A) maximize short-term earnings. B) maximize shareholder wealth. C) minimize risk. D) A and C. E) maximize international sales. ANSWER: B 2. With regard to corporate goals, an MNC is mostly concerned with maximizing ____________, and a purely domestic firm is mostly concerned with maximizing ____________. A) shareholder wealth; short-term earnings B) shareholder wealth; shareholder wealth C) short-term earnings; sales volume D) short-term earnings; shareholder wealth ANSWER: B 3. For the MNC, agency costs are typically: A) non-existent. B) larger than agency costs of a small purely domestic firm. C)…show more content…
D) government operations that are purchased by corporations and other investors. ANSWER: D 16. According to the text, products and services are generally becoming _______ standardized across countries, which tends to _______ the globalization of business. A) more; encourage B) more; discourage C) less; discourage D) less; encourage ANSWER: A 17. Franchising is the process by which national governments sell state owned operations to corporations and other investors. A) true. B) false. ANSWER: B 18. Which of the following is not a major event that increased international business opportunities in Europe? A) the Single European Act. B) the removal of the Berlin Wall. C) the inception of the euro. D) the reduction in the number of countries participating in the European Union. ANSWER: D 19. The Single European Act of 1987 was primarily intended to: A) create more trade barriers between European countries. B) unify East Germany and West Germany. C) provide financial support for Eastern Europe. D) make regulations more uniform across industrialized countries in Europe. ANSWER: D 20. The Single European Act of 1987: A) reduced competition in most industries. B) eliminated competition in many industries. C) reduced efficiency in most industries. D) increased competition in most industries. ANSWER: D 21. In comparing exporting to direct foreign investment (DFI), an exporting operation will
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