HW#1 Finance 463 Shapiro 9

HW#1 Finance 463 Shapiro 9 - HW#1 Finance 463 Shapiro 9...

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HW#1 Finance 463 Shapiro 9 Student: ___________________________________________________________________________ 1. Historically, the primary motive for U.S. multinationals to produce abroad has been to A. lower costs B. respond more quickly to the marketplace C. avoid trade barriers D. gain tax benefits 2. The primary objective of the multinational corporation is to A. maximize shareholder wealth B. maximize world production C. minimize debt D. minimize the cost of doing business globally 3. When a firm operates globally it offers advantages such as A. greater political power at home B. bless taxes on its profits C. greater negotiating power with foreign minority groups D. greater negotiating power with labor unions 4. The prime transmitter of global competitive forces is the A. public utility firm B. financial management experience of the U.S. markets C. the multinational corporation D. the Federal Reserve System of the U.S. 5. Which of the following is an example of reverse foreign investment? A. Honda builds a factory in Ohio B. Apple builds a plant in Ireland that exports to the United States C. British Telecom issues new stock in the United States D. American investors buy shares in Sony 6. Which of the following theories identifies specialization as the main reason for international business activity? A. Product life cycle theory of international trade B. theory of diversification C. doctrine of comparative advantage D. theory of globalization 7. According to the capital asset pricing model A. only the systematic component of risk affects the required return B. foreign investments whose returns are uncorrelated with the market's return should have a higher required return than comparable domestic investments C. total risk of the investment is most relevant for small to medium-sized firms D. diversification is secondary to risk levels of the investment 8. The U.S. dollar weakened during the 1970s for the following reasons EXCEPT A. U.S. inflation accelerated B. the U.S. economy weakened C. foreigners didn't want to hold as many dollars as before D. foreigners did want to hold many more dollars than before 9. Of the following, exchange rates depend the most upon relative A. monetary systems B. political systems C. trade deficits D. inflation rates between nations 10. ______ is another name for the complete replacement of the local currency with the U.S. dollar. A. Seignorage B. Dollarization C. Depreciation D. Appreciation E. A&B 11. To some U.S. manufacturers and labor unions, a cheap yuan value gives China’s __________ an unfair advantage in the global economy. A. imports B. subsidies C. bankers D. exporters 12. The asset market view of exchange rate determination does NOT state that the spot rate A. should follow a random walk B. is affected primarily by a nation's long run economic prospects C. is influenced by a nation’s annual economic growth D. should be strongly affected by a nation's balance of trade
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This note was uploaded on 01/29/2012 for the course ECON 453 taught by Professor Phio during the Spring '10 term at University of Ottawa.

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HW#1 Finance 463 Shapiro 9 - HW#1 Finance 463 Shapiro 9...

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