With respect to information asymmetry a management

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100) With respect to information asymmetry,A) management knows about the firm's exposure position much better than stockholders, and therefore should be the ones to manage exchange exposure.B) stockholders know about the firm's exposure position much better than management, and therefore should be the ones to manage exchange exposure.C) regulators know about the firm's exposure position much better than management, and therefore should be the ones to oversee exchange exposure.D) none of the optionsAnswer: ATopic: Should the Firm Hedge?Accessibility: Keyboard Navigation
International Financial Management, 8e(Eun)Chapter 9 Management of Economic Exposure1) Suppose the U.S. dollar substantially depreciates against the Japanese yen. The change in exchange rateA) 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 optionsAnswer: CTopic: How to Measure Economic ExposureAccessibility: Keyboard Navigation2) Suppose the U.S. dollar substantially depreciates against the Japanese yen. The change in exchange rateA) 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 optionsAnswer: BTopic: How to Measure Economic ExposureAccessibility: Keyboard Navigation3) The link between a firm's future operating cash flows and exchange rate fluctuations isA) asset exposure.B) operating exposure.C) asset exposure and operating exposure.D) none of the optionsAnswer: BTopic: How to Measure Economic ExposureAccessibility: Keyboard Navigation4) 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) U.S. firms that exported to Mexico and priced in peso were adversely affected, and U.S. firmsthat exported to Mexico and priced in dollars were adversely affected.Answer: DTopic: How to Measure Economic ExposureAccessibility: Keyboard Navigation

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