InternationalFinancialManagement_5thEd_Eun_TestBank09

InternationalFinancialManagement_5thEd_Eun_TestBank09 - 09...

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Unformatted text preview: 09 Student: ___________________________________________________________________________ 1. Suppose the U.S. dollar substantially depreciates against the Japanese yen. The change in exchange rate A. Can have significant economic consequences for U.S. firms. B. Can have significant economic consequences for Japanese firms. C. Can have significant economic consequences for both U.S. and Japanese firms. D. None of the above 2. Suppose the U.S. dollar substantially depreciates against the Japanese yen. The change in exchange rate A. Will tend to weaken the competitive position of import-competing U.S. car makers. B. Will tend to strengthen the competitive position of import-competing U.S. car makers. C. Will tend to strengthen the competitive position of Japanese car makers at the expense of U.S. makers. D. None of the above 3. The link between a firm's future operating cash flows and exchange rate fluctuations: A. Asset exposure B. Operating exposure C. a) and b) D. none of the above 4. When the Mexican peso collapsed in 1994, declining by 37 percent, A. U.S. firms that exported to Mexico and priced in peso were adversely affected. B. U.S. firms that exported to Mexico and priced in dollars were adversely affected. C. U.S. firms were unaffected by the peso collapse, since Mexico is such a small market. D. Both a) and b) 5. When exchange rates change, A. U.S. firms that produce domestically and sell only to domestic customers will be unaffected. B. U.S. firms that produce domestically and sell only to domestic customers can be affected if they compete against imports. C . U.S. firms that produce domestically and sell only to domestic customers will be affected, but only if they borrow in foreign currency to finance their domestic operations. D. Both a) and b) 6. When exchange rates change, A. This can alter the operating cash flow of a domestic firm. B. This can alter the competitive position of a domestic firm. C. This can alter the home currency values of a multinational firm's assets and liabilities. D. All of the above 7. Two studies found a link between exchange rates and the stock prices of U.S. firms, A. This suggests that exchange rate changes can systematically affect the value of the firm by influencing its operating cash flows. B . This suggests that exchange rate changes can systematically affect the value of the firm by influencing the domestic currency values of its assets and liabilities. C. a) and b) D. None of the above 8. It is conventional to classify foreign currency exposures into the following types: A. economic exposure, transaction exposure, and translation exposure B. economic exposure, noneconomic exposure, and political exposure C. national exposure, international exposure, and trade exposure D. conversion exposure, and exchange exposure 9. Exposure to currency risk can be measured by the sensitivities of A. the future home currency values of the firm's assets and liabilities B. the firm's operating cash flows to random changes in exchange ratesB....
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This note was uploaded on 07/28/2011 for the course FIN 308 taught by Professor Canarella during the Summer '11 term at University of Nevada, Las Vegas.

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InternationalFinancialManagement_5thEd_Eun_TestBank09 - 09...

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