Multinational Business Finance 15th Global Edition by David K. Eiteman test bank

D) Borrowers are usually large corporations or government entities.
Answer:  A
Diff: 2
L.O.:  1.1 The Global Financial Marketplace
Skill:  Recognition
AACSB:  Application of knowledge
 
11) Multinational enterprises (MNEs) are firms, both for-profit companies and not-for-profit organizations, that have operations in more than one country, and conduct their business through foreign subsidiaries, branches, or joint ventures with host country firms.
Answer:  TRUE
Diff: 1
L.O.:  1.1 The Global Financial Marketplace
Skill:  Recognition
AACSB:  Application of knowledge
 

12) Ownership, control, and governance changes radically across the world. The publicly traded company is not the dominant global business organization—the privately held or family-owned business is the prevalent structure—and their goals and measures of performance differ dramatically.
Answer:  TRUE
Diff: 1
L.O.:  1.1 The Global Financial Marketplace
Skill:  Recognition
AACSB:  Application of knowledge
 
13) The securities at the heart of the global capital markets are the Mortgage Backed Securities (MBS). The health and security of the global financial system rely on the quality of these securities.
Answer:  FALSE
Diff: 1
L.O.:  1.1 The Global Financial Marketplace
Skill:  Recognition
AACSB:  Application of knowledge
 
14) The U.S. dollar has been the focal point of currency trading since the 1940s. As a result, most of the world's currencies are quoted against the dollar.
Answer:  TRUE
Diff: 1
L.O.:  1.1 The Global Financial Marketplace
Skill:  Recognition
AACSB:  Application of knowledge
 
15) Several of the world's major currency exchange rates follow a specific quotation convention that is the result of tradition and history. The exchange rate between the U.S. dollar and the euro is always quoted as "dollars per euro."
Answer:  TRUE
Diff: 1
L.O.:  1.1 The Global Financial Marketplace
Skill:  Recognition
AACSB:  Application of knowledge
 
16) Several of the world's major currency exchange rates follow a specific quotation convention that is the result of tradition and history. The exchange rate between the U.S. dollar and the British pound is always quoted as "dollars per pound."
Answer:  TRUE
Diff: 1
L.O.:  1.1 The Global Financial Marketplace
Skill:  Recognition
AACSB:  Application of knowledge
 

17) Several of the world's major currency exchange rates follow a specific quotation convention that is the result of tradition and history. The exchange rate between the U.S. dollar and the Japanese yen is always quoted as "dollars per Japanese yen."
Answer:  FALSE
Diff: 1
L.O.:  1.1 The Global Financial Marketplace
Skill:  Recognition
AACSB:  Application of knowledge
 
18) Your authors suggest that one way to characterize the global financial marketplace is through its assets, institutions, and linkages.
Answer:  TRUE
Diff: 1
L.O.:  1.1 The Global Financial Marketplace
Skill:  Recognition
AACSB:  Application of knowledge
 
19) Eurocurrencies are domestic currencies of one country on deposit in a second country.
Answer:  TRUE
Diff: 1
L.O.:  1.1 The Global Financial Marketplace
Skill:  Recognition
AACSB:  Application of knowledge
 
20) A eurodollar deposit is a demand deposit.
Answer:  FALSE
Diff: 2
L.O.:  1.1 The Global Financial Marketplace
Skill:  Recognition
AACSB:  Application of knowledge
 
21) Eurocurrency markets serve two valuable purposes: .1) Eurocurrency deposits are an efficient and convenient money market device for holding excess corporate liquidity; and 2) the Eurocurrency market is a major source of short-term bank loans to finance corporate working capital needs, including the financing of imports and exports.
Answer:  TRUE
Diff: 2
L.O.:  1.1 The Global Financial Marketplace
Skill:  Conceptual
AACSB:  Application of knowledge
 

22) The key factor attracting both depositors and borrowers to the Eurocurrency loan market is the narrow interest rate spread within that market.
Answer:  TRUE
Diff: 1
L.O.:  1.1 The Global Financial Marketplace
Skill:  Conceptual
AACSB:  Application of knowledge
 
23) The Eurocurrency market continues to thrive because it is a large international money market relatively free from governmental regulation and interference. Recent events may lead to greater regulation.