{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

InternationalFinancialManagement_5thEd_Eun_TestBank10

InternationalFinancialManagement_5thEd_Eun_TestBank10 - 10...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
10 Student: ___________________________________________________________________________ 1. Translation exposure refers to: A. accounting exposure B. the effect that an unanticipated change in exchange rates will have on the consolidated financial reports of an MNC C . the change in the value of a foreign subsidiaries assets and liabilities denominated in a foreign currency, as a result of exchange rate change fluctuations, when viewed from the perspective of the parent firm D. all of the above 2. The recognized methods for consolidating the financial reports of an MNC are: 3. How many methods of foreign currency translation have been used in recent years? (U.S. GAAP.) 4. Translation exposure, also frequently called accounting exposure, refers to the effect that an unanticipated change in exchange rates will have on the 5. When exchange rates change, the value of a foreign subsidiary's assets and liabilities denominated in a foreign currency change A. When they are viewed from the perspective of the subsidiary firm. B. When they are viewed from the perspective of the parent firm. C . But this is only of material concern if the parent firm is liquidating the subsidiary in a bankruptcy and is forced to realize the value of the assets and liabilities at the current exchange rate. D. None of the above 6. The sensitivity of "realized" domestic currency values of the firm's contractual cash flows denominated in foreign currency to unexpected changes in the exchange rate is:
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
7. The management of translation exposure is best described as A. Selecting a mechanical means for handling the consolidation process for MNCs that logically deals with exchange rate changes. B . Selecting a mechanical means for handling the consolidation process for MNCs that makes this quarter's accounting numbers as attractive as possible. C . Selecting a mechanical means for handling the consolidation process for MNCs that treats inventory valuation as LIFO on the income statement and FIFO on the balance sheet. D . Selecting a mechanical means for handling the consolidation process for MNCs that treats inventory valuation as FIFO on the income statement and LIFO on the balance sheet.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}