Chapter 1 Quiz With Asnwers

The study of international finance includes investment, financing, dividend policy. Consumption Countries routinely import export goods. + services. Finance -Investors can now more easily diversify their portfolios, and companies can more easily cross-list their shares. Production Multinational corporations source inputs location production anywhere. where costs are lower profits are higher. • Which of the following is highly globalized? All of the above. (production of goods services consumption of goods). Which of the following risks are present in International Finance that are absent in purely domestic finance? Foreign Exchange Risk and Political Risk What is considered the most important corporate objective in Anglo- American countries? Maximizing Shareholder Wealth The Argentine government's April 2012 nationalization of a majority Stake in YPF, the country's largest oil producer, is an example of Political Risk The various frictions and impediments preventing markets from functioning perfectly are referred to as Market Imperfections. •True or False: It's often difficult to associate a product with a single country of origin.. True International Finance differs from purely domestic finance on which of the following dimensions? Expanded Opportunity Set Foreign Exchange and Political Risks. Market Imperfections. 'match the countries w Corporations the ultimate goal of financial management of their United States - Shareholder Wealth Maximization. Germany - Welfare of their Stakeholders. Japan Prosperity growth of their business group. Market imperfections include which of the following? Transaction Costs Legal Restrictions The financial and legal framework that regulates the relationship between. a company's management and its shareholders is referred to as Corporate Governance The deregulation of British financial markets. known as the on October 27, 1986 is Big Bang •The euro is the most widely circulated. days of the Roman empire. currency in Europe since the Potential benefits of the expanded opportunity set of a firm expanding into global markets include The ability to locate in a country to maximize performance. The greater economies of scale from deploying assets on a global basis. The principle argument for international trade is based on the which was advanced by David Ricardo in his Seminal book, Principles of Political Economy (1817). Theory of Comparative Advantage In Japan, companies often have as their goal the prosperity + growth of an interlocking business group called a Keiretsu The term for when corporate managers pursue their own interests rather than those of their shareholders is the Agency problem. Which factors are likely to have contributed to the 2008-2009 crisis? The laissez faire approach of financial regulators. The accumulation of foreign reserves by Asias countries. Financial engineering which created opaque complex mortgage-based secur. The interconnectedness of financial markets. Globalized financial markets emerged in the which of the following factors? 1980s and 90s as a result of Advances in computer and telecommunications technology.. •Deregulation of capital markets. Over the past two decades, foreign direct investment by multinational corporations has grown at a Faster rate than international trade. Since the end of World War I, the currency. has been the dominant global U.S. Dollar A country has a(n) advantage when it can produce a good or service. using less resources than another country. can. Absolute The vote in 2016 by a majority of Brittons to leave the EU is known as Brexit The effects of privatization include. •Improved efficiency and reduced operating costs. Acquisition of foreign reserves. An adjustable rate mortgage designed to facilitate home ownership for low and modest income households is referred to as a(n) mortgage. Subprime A(n) Corporation is a business firm incorporated in one country that has production sales. operations in many other countries. Multinational Which of the statements are true about the Ricardian model of two countries. trading two goods? Both countries can become better off from trade.. True or False: Mortgage banks raise funds for making subprime loans mainly by securitization. True