PRIN.OF CORPORATE FINANCE
13th Edition
ISBN: 9781260013900
Author: BREALEY
Publisher: RENT MCG
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Textbook Question
Chapter 14, Problem 10PS
Financial markets and intermediaries. True or false?
- a. Financing for public corporations must flow through financial markets.
- b. Financing for private corporations must flow through financial intermediaries.
- c. Almost all foreign exchange trading occurs on the floors of the FOREX exchanges in New York and London.
- d. Derivative markets are a major source of finance for many corporations.
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Chapter 14 Solutions
PRIN.OF CORPORATE FINANCE
Ch. 14 - Terminology Fill in the blanks, using the...Ch. 14 - Prob. 2PSCh. 14 - Sources of funds True or false? a. Net stock...Ch. 14 - Prob. 4PSCh. 14 - Company ownership What do we mean when we say that...Ch. 14 - Prob. 6PSCh. 14 - Prob. 7PSCh. 14 - Prob. 8PSCh. 14 - Corporate debt Which of the following features...Ch. 14 - Financial markets and intermediaries. True or...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- A. What is a multinational corporation? Why do firms expand into other countries? B. Discuss at least six major factors which distinguish multinational financial management from financial management as practiced by a purely domestic firm. (Please consider doing additional research on this question and document your findings). C. Discuss exchange rate risk as they relate to multinational corporations. D. Describe the current International Monetary System. How does the current system differ from the system that was in place prior to August 1971? (Please consider doing additional research on this question and document your findings). E. What is the difference between spot rates and forward rates? When is the forward rate at a premium to the spot rate? At a discount? (Please consider doing additional research on this question and document your findings). F. From a managerial point of view, discarrow_forwardA. What is a multinational corporation? Why do firms expand into other countries?B. Discuss at least six major factors which distinguish multinational financial managementfrom financial management as practiced by a purely domestic firm. (Please considerdoing additional research on this question and document your findings).C. Discuss exchange rate risk as they relate to multinational corporations.D. Describe the current International Monetary System. How does the current system differfrom the system that was in place prior to August 1971? (Please consider doingadditional research on this question and document your findings).E. What is the difference between spot rates and forward rates? When is the forward rateat a premium to the spot rate? At a discount? (Please consider doing additionalresearch on this question and document your findings).F. From a managerial point of view, discuss how your responses above will help Citrus, Inc.as they plan to expand overseas.arrow_forwardThe Depository Trust and Clearing Corporation (DTCC) primarily provides custody and asset servicing for securities issues from outside the United States. brings efficiency by netting transactions between brokers, dealers, mutual funds, insurance companies and other large investors. brings efficiency by acting as an indirect holder of most stock and bond certificates via the commercial book-entry system (CBES). has three tiers, one for the U.S. Federal Reserve, one for depository institutions and one for brokers, dealers and others who hold accounts for individual investors.arrow_forward
- From a practical standpoint, how do international markets differ from domestic markets? What role do international securities play in a corporate portfolio? In what ways do investors quantify the risk levels between domestic and foreign securities? What asset allocation strategies and weightings would you consider when investing in international securities? Explain your reasoning.arrow_forwardCredit entries in the U.S. balance of payments A. result from foreign sales of US. goods and services, goodwill, financial claims, and real assets B. result from U.S. purchases of foreign goods and services, goodwill, financial claims, and real assets give rise to the demand for dollars. give rise to the supply of dollars. C. D. The key strengths of the public corporation is/are their capacity to allow efficient risk sharing among many investors their capacity to raise large amounts of funds at relatively low cost their capacity to consolidate decision-makingarrow_forwardFinancial institutions engage in the purchasing and selling of foreign currencies for all of the following reasons except to: a. Hedge against foreign exchange exposures. b. Allow customers access to foreign markets to transact business. c. Avoid trading in speculative investments. d. Allow itself and/or customers to trade and invest in foreign financial markets.arrow_forward
- 1. What are the current financial issues that can affect the operating environment of a multinational corporation 2. How can these issues affect the multinational corporation foreign currency exposurearrow_forwardWhich of the following is true about financial institutions in the United States compared to those in other countries? (a). Most U.S. intermediaries are allowed to engage in nonbanking (nonfinancial) business activities, whereas the nonbanking activities of foreign financial institutions have been severely restricted until recently (b) .US, financial institutions have been much more heavily regulated than their foreign counterparts with regard to expansion (branching) and the services that could be offered (c).U.S. financial institutions and their foreign counterparts have similar regulations with regard to engaging in nonbanking activities (d). U.S. financial institutions and their foreign counterparts have similar regulations with regard to expansion (branching) and the services that could be offered. (e).US, financial Institutions have been regulated less than their foreign counterparts with regard to expansion (branching) and the services that could be offered.arrow_forwardCompanies go global for various reasons. Although becoming a multinational corporation provides prospects for high returns and diversification, it makes financial management more complicated for financial executives and managers. Based on your understanding of the factors that complicate financial management in multinational firms, complete the following statement: Compared to domestic corporations, multinational corporations have (increased or reduced) risk from exchange rate fluctuations.arrow_forward
- Which of the following statements is NOT true? A. Debt contracts tend to impose more restrictions on the actions of the borrower than the lender B. Larger corporations have easier access to the securities market C. The financial sector is one of the least regulated industries in the US economy D. Collateral is used to secure debt contractsarrow_forwardWhy do governments intervene in the foreign exchange market? Check all that apply: To maintain exchange rate boundaries To reduce fear in financial markets To smooth out the business cycle To smooth out exchange rate movements To earn a profit for the governmentarrow_forwardIf an investment bank offers both underwriting/distribution functions and investment advisory or management functions, which situation would be acceptable under U.S. Securities and Exchange regulations and ethics guidelines with regard to material non-public information (MNPI)? Allowing MNPI acquired in the sell side of the business to influence the recommendations made by the buy side of the business. Trading of personal securities based on MNPI available only to the buy side of the business and not to the sell side due to a "wall." "Bringing someone over the wall" to provide value to underwriting, who does not comment on MNPI until it has been made public. Acquiring MNPI in the buy side of the business and disseminating it to the sell side of the business.arrow_forward
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