Essay on Business Finance

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Pages: 8
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Multinational Business Finance, 12e (Eiteman, et al)
Chapter 1 Globalization and the Multinational Enterprise

1.1 Globalization and Creating Value in the Multinational Enterprise

Multiple Choice

1) Which of the following are critical to a firm trying to reach the top of the "firm value pyramid"?
A) An open market place.
B) High quality strategic management.
C) Access to capital.
D) all of the above
Answer: A
Diff: 2
Topic: 1.1 Globalization and Creating Value in the Multinational Enterprise
Skill: Conceptual

2) A well-established, large U.S.-based MNE will probably NOT be able to overcome which of the following obstacles to maximizing firm value?
A) An open market place.
B) High quality strategic management. …show more content…
Answer: TRUE
Diff: 2
Topic: 1.2 The Theory of Comparative Advantage
Skill: Recognition

4) Comparative advantage in the 21st century is based more on services and their cross border facilitation by telecommunications and the Internet.
Answer: TRUE
Diff: 1
Topic: 1.2 The Theory of Comparative Advantage
Skill: Recognition

5) Comparative advantage was once the cornerstone of international trade theory, but today it is archaic, simplistic, and irrelevant for explaining investment choices made by MNEs.
Answer: FALSE
Diff: 2
Topic: 1.2 The Theory of Comparative Advantage
Skill: Recognition

1.3 What Is Different about Global Financial Management?

Multiple Choice

1) Which of the following domestic financial instruments have NOT been modified for use in international financial management?
A) Currency options and futures.
B) Interest rate and currency swaps.
C) Letters of credit.
D) All of the above are domestic financial instruments that have also been modified for use in international financial markets.
Answer: D
Diff: 2
Topic: 1.3 What Is Different about Global Financial Management?
Skill: Recognition

True/False

1) MNEs must modify finance theories like cost of capital and capital budgeting because of foreign complexities.
Answer: TRUE
Diff: 2
Topic: 1.3 What Is Different about Global Financial Management?
Skill: Recognition

1.4 Market Imperfections: A Rationale for the
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