Finance - Multinational

FINS 5516 International Corporate Finance - Week 1

A. True or False

T1. MNCs have investment or financial operations in more than one country.

F2. The terms "stakeholder" and "shareholder" are synonymous.

F3. The MNC faces greater constraints than the domestic corporation in the timing and location of its investments.

T4. Political risk is the risk that the business environment in a host country will change unexpectedly due to political events.

F5审题！. The domestic financial manager must be knowledgeable in several areas within finance, whereas the multinational financial manager usually specializes in a single area, such as corporate finance, investments, or financial markets.

F6审题. The world's financial markets are becoming increasingly segmented as large international commercial banks achieve more and more economic power.

TT7. The international monetary system refers to the global network of governmental and commercial institutions within which currency exchange rates are determined.

F8. The International Monetary Fund's principal mission is to provide funds for economic development in developing economies.

F9. The "trade balance" of the IMF's Balance-of-Payments Statistics measures gross exports of goods and services.

F10. Decreases in currency values within a floating rate system are called devaluations.

FLOATING: Depreciation

FIX: Devaluation

FF11. IMF loans to troubled economies are unlikely to change the behaviors of investors, because investors can assess the risks of moral hazard for themselves.

B. MCQ

E1. Corporate stakeholders include each of a.-d. except ____.

a. creditors

b. customers

c. managers

d. shareholders

e. Each of the above is a stakeholder in the firm

C2. Opportunities for the MNC to reduce operating expenses include each of the following except ______.

a. economies