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FINANCE 6644: Global Financial StrategyKrishnan DandapaniAugust 2015Final Exam Review Questions InstructionsA.Please be concise and precise in your answers.B.Practice answers for closed book, class room setting.C.Suggested length: minimum 1 page [1.5 spacing]; maximum 2 pages per question.D.You answer 3 short essays and 2 Problems in two hours, 30 minutes in final exam.Questions1.Ethical StandardsA. Can a multinational firm adopt varying ethical standards [such as with regard to product safety (Pinto), employee benefits (Nike) and “kickbacks” to win business] in its global operations? Why or Why Not? Discuss in depth based on the goals of multinational corporations? B. How do corporate governance and financial management differ for US based corporations and global multinational corporations? Explain with specific examples how these differences affect decision making of global finance manager.2.Financial Institutions Muti-goal Optimization Strategy:a.Identify the major ‘objectives’ and ‘problems’ in the management of financial institutions globally. What strategies do institutions use to meet these challenges?b.How do regulators evaluate the financial institutions?c.Why did ‘Virtual Banks’ fail? Discuss in depth. What are the prospects for Mobile Banking, and Cloud Banking worldwide in the forthcoming decade?
3. Theoretical Relationship 1: Money Supply and Inflation; Monetary Equationa.What Causes Inflation? Discuss. b.What is the ‘Monetary Equation’. Why is it important to the financial manager? c.What are the implications of this for the ‘foreign exchange market’?4. Trade Policy and Offshoring Strategya.Why do nations trade with one another? Explain in your own words.(Ricardo’s Comparative advantage Chapter 1 Appendix: Economics and Efficiency):b. What is Dynamic Comparative Advantage? [Vernon’s Theory]c. What are the economic and sociological implications of Vernon’s theory for the current debate on “Outsourcing” and “Off-shoring?” d. What strategies should corporations adopt to minimize the impact of off-shoring on its employees in a global economy?5.GlobalPricing StrategyWith the emergence of the Internet as a dominant influence in global markets, many anticipated that the “Law of One Price” [LOP] for all products would evolve. However that did not materialize.A.What is “Law of One Price”? When would that exist globally?B.Identify the major pricing strategies/ methodologies of corporations in pricing products and services.C.Discuss the impact of the Internet on “Global Pricing Strategies” of firms with specific reference to ‘Internet Pricing’ and ‘Brick and Mortar pricing’.6. Theoretical Relationship 2 :Inflation and Interest Rates; Domestic Fisher EffectA.What is the ‘Domestic Fisher Effect’? Use your ownexample to illustrate.