Question 1

How do countries differ in terms of taxation? In regards to taxation,why do some MNEs turn to offshore financial centers? Why are offshore financial centers a concern to the OECD?

Accepted Answer

Countries differ in terms of the types o...

Question 2

You are the chief financial officer at an MNE.What are your main responsibilities in this position? What taxation issues have a significant effect on the decisions you make?

Accepted Answer

One of the most important people on the ...

Question 3

Taxation is an important cash flow issue,but it typically does not have a strong impact on the choice of organizational form (such as branch or subsidiary)or the location of an investment.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is a characteristic of most offshore financial centers?

Accepted Answer

A)   political stability
B)   services for residents
C)   accounting scandals
D)   a lack of legal expertiseE) A) and B)
F) A) and C)

Question 5

Capital budgeting requires companies to determine free cash flows,which are affected by factors such as local tax rates.

Accepted Answer

A) True 
 B)False

Question 6

Subpart F income is passive and usually derived from operations in a tax-haven country.

Accepted Answer

A) True 
 B)False

Question 7

What is a Eurodollar?

Accepted Answer

A)   a euro held by an American
B)   a U.S. dollar deposited in a European bank
C)   a euro deposited in a U.S. bank.
D)   any currency deposited in a country other than the country of issueE) All of the above
F) B) and C)

Question 8

A French company floating a bond issued in Swiss francs in Switzerland would be selling a foreign bond.

Accepted Answer

A) True 
 B)False

Question 9

A bond issued by a Brazilian company in British pounds in London is a ________.

Accepted Answer

A)   Eurobond
B)   global bond
C)   local bond
D)   foreign bondE) All of the above
F) None of the above

Question 10

One way to account for the challenge of the variability of future cash flows is to ________.

Accepted Answer

A)   adjust the hurdle rate for the project
B)   use the most likely cash flow estimate
C)   ignore different rates of inflation to prevent confusion
D)   leave out a consideration of the terminal value of an investmentE) B) and D)
F) B) and C)

Question 11

For U.S.MNEs,the tax-deferral privilege operating through a foreign subsidiary was not originally a tax loophole.On the contrary,it was granted by the U.S.government to allow U.S.firms to expand overseas and place them on a par with foreign competitors,which also enjoy similar types of tax deferral and export subsidies of one type or another.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is NOT an advantage of ADRs to U.S.shareholders?

Accepted Answer

A)   Transfer of ownership is done in the U.S. in accordance with U.S. laws.
B)   In the event of the death of the shareholder, the estate does not go through a foreign court.
C)   Settlement for trading is generally faster in the United States.
D)   All of the above are advantages of ADRs.E) A) and B)
F) A) and C)

Question 13

Which of the following is a true statement about the Euroloan market?

Accepted Answer

A)   It is extremely competitive and lenders operate on razor-thin margins.
B)   It is extremely competitive but lenders still receive substantial margins.
C)   It is monopolistic, yet lenders operate on razor-thin margins.
D)   It is monopolistic and lenders receive substantial margins.E) A) and D)
F) C) and D)

Question 14

According to 2010 data,which of the following statements about the mix of debt and equity to fund operations is true?

Accepted Answer

A)   The debt/asset ratio has risen in Japan since 2007.
B)   A growing number of Russian firms are relying more on debt.
C)   The equity/asset ratio fell for firms in France and Germany since 2007.
D)   In most emerging markets, shares of stock are broadly held, like in the U.S.E) None of the above
F) A) and B)

Question 15

________ is the pricing of goods,services,and technology between related companies.

Accepted Answer

A)   Among pricing
B)   Retail pricing
C)   Transfer pricing
D)   Wholesale pricingE) A) and B)
F) B) and C)

Question 16

When Sistema,a Russian company,issued a U.S.dollar stock offering in London,its shares were classified as a(n) ________.

Accepted Answer

A)   Global Depositary Receipt
B)   American Depositary Receipt
C)   European Depositary Receipt
D)   International Depositary ReceiptE) A) and B)
F) A) and D)

Question 17

All of the following are part of the global financial system except the ________.

Accepted Answer

A)   New York Stock Exchange
B)   World Trade Organization
C)   International Monetary Fund
D)   Bank for International SettlementsE) B) and D)
F) A) and B)

Question 18

MNCs can cross-list their common stocks on multiple stock exchanges.

Accepted Answer

A) True 
 B)False

Question 19

An ADR is a negotiable certificate issued by a U.S.bank in the United States to represent the underlying shares of a foreign corporation's stock held at a custodian bank in the foreign country.

Accepted Answer

A) True 
 B)False

Question 20

A situation in which several banks pool resources in the Eurocurrency market to extend credit to a borrower and spread the risk is known as ________.

Accepted Answer

A)   credit collaboration
B)   leverage equity financing
C)   syndication
D)   short-term Eurocurrency financingE) B) and C)
F) A) and C)

Exam 10: Global Capital Markets

Subpart F income is passive and usually derived from operations in a tax-haven country.

Correct Answer
verified

When Sistema,a Russian company,issued a U.S.dollar stock offering in London,its shares were classified as a(n) ________.

Correct Answer
verified

A situation in which several banks pool resources in the Eurocurrency market to extend credit to a borrower and spread the risk is known as ________.

Correct Answer
verified

One way to account for the challenge of the variability of future cash flows is to ________.

Correct Answer
verified

You are the chief financial officer at an MNE.What are your main responsibilities in this position? What taxation issues have a significant effect on the decisions you make?

Correct Answer
verified
One of the most important people on the ...
View Answer

All of the following are part of the global financial system except the ________.

Correct Answer
verified

Capital budgeting requires companies to determine free cash flows,which are affected by factors such as local tax rates.

Correct Answer
verified

Taxation is an important cash flow issue,but it typically does not have a strong impact on the choice of organizational form (such as branch or subsidiary)or the location of an investment.

Correct Answer
verified

MNCs can cross-list their common stocks on multiple stock exchanges.

Correct Answer
verified

________ is the pricing of goods,services,and technology between related companies.

Correct Answer
verified

A French company floating a bond issued in Swiss francs in Switzerland would be selling a foreign bond.

Correct Answer
verified

Which of the following is a true statement about the Euroloan market?

Correct Answer
verified

A bond issued by a Brazilian company in British pounds in London is a ________.

Correct Answer
verified

How do countries differ in terms of taxation? In regards to taxation,why do some MNEs turn to offshore financial centers? Why are offshore financial centers a concern to the OECD?

Correct Answer
verified
Countries differ in terms of the types o...
View Answer

Which of the following is a characteristic of most offshore financial centers?

Correct Answer
verified

Correct Answer
verified

What is a Eurodollar?

Correct Answer
verified

According to 2010 data,which of the following statements about the mix of debt and equity to fund operations is true?

Correct Answer
verified

An ADR is a negotiable certificate issued by a U.S.bank in the United States to represent the underlying shares of a foreign corporation's stock held at a custodian bank in the foreign country.

Correct Answer
verified

Which of the following is NOT an advantage of ADRs to U.S.shareholders?

Correct Answer
verified

Exam 10: Global Capital Markets

Subpart F income is passive and usually derived from operations in a tax-haven country.

Correct AnswerverifiedShow Answer

When Sistema,a Russian company,issued a U.S.dollar stock offering in London,its shares were classified as a(n) ________.

Correct AnswerverifiedShow Answer

A situation in which several banks pool resources in the Eurocurrency market to extend credit to a borrower and spread the risk is known as ________.

Correct AnswerverifiedShow Answer

One way to account for the challenge of the variability of future cash flows is to ________.

Correct AnswerverifiedShow Answer

You are the chief financial officer at an MNE.What are your main responsibilities in this position? What taxation issues have a significant effect on the decisions you make?

Correct AnswerverifiedOne of the most important people on the ...View AnswerShow Answer

All of the following are part of the global financial system except the ________.

Correct AnswerverifiedShow Answer

Capital budgeting requires companies to determine free cash flows,which are affected by factors such as local tax rates.

Correct AnswerverifiedShow Answer

Taxation is an important cash flow issue,but it typically does not have a strong impact on the choice of organizational form (such as branch or subsidiary)or the location of an investment.

Correct AnswerverifiedShow Answer

MNCs can cross-list their common stocks on multiple stock exchanges.

Correct AnswerverifiedShow Answer

________ is the pricing of goods,services,and technology between related companies.

Correct AnswerverifiedShow Answer

A French company floating a bond issued in Swiss francs in Switzerland would be selling a foreign bond.

Correct AnswerverifiedShow Answer

Which of the following is a true statement about the Euroloan market?

Correct AnswerverifiedShow Answer

A bond issued by a Brazilian company in British pounds in London is a ________.

Correct AnswerverifiedShow Answer

How do countries differ in terms of taxation? In regards to taxation,why do some MNEs turn to offshore financial centers? Why are offshore financial centers a concern to the OECD?

Correct AnswerverifiedCountries differ in terms of the types o...View AnswerShow Answer

Which of the following is a characteristic of most offshore financial centers?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What is a Eurodollar?

Correct AnswerverifiedShow Answer

According to 2010 data,which of the following statements about the mix of debt and equity to fund operations is true?

Correct AnswerverifiedShow Answer

An ADR is a negotiable certificate issued by a U.S.bank in the United States to represent the underlying shares of a foreign corporation's stock held at a custodian bank in the foreign country.

Correct AnswerverifiedShow Answer

Which of the following is NOT an advantage of ADRs to U.S.shareholders?

Correct AnswerverifiedShow Answer

Correct Answer
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verified
One of the most important people on the ...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Countries differ in terms of the types o...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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