FREE Master of International Business: Multinational Financial Management Questions and Answers
If a simple family organization experiences even a small amount of exchange rate volatility,
Even a simple household organization, particularly those engaged in small-scale international transactions or dealing with foreign competition, can be influenced by exchange rate variations.
Businesses can use their expertise in overseas markets without a license thanks to licensing.
Major investment in foreign countries, also known as Foreign Direct Investment (FDI), refers to the substantial financial commitment made by a company or individual from one country into a business or project located in another country. FDI involves the direct ownership or control of assets in the foreign country, typically with the intention of establishing a physical presence, expanding operations, or acquiring significant assets.
With regard to that country, we multiply foreign revenue by the rate.
The spot exchange rate is the current market rate at which one currency can be exchanged for another currency for immediate delivery. It reflects the prevailing market conditions at a specific point in time. When an MNC multiplies its foreign revenue with the spot rate, it converts the foreign currency revenue into its reporting currency at the current market rate.
Which of the following is not a way that corporate rule can help with agency issues?
Acquisition of a foreign subsidiary is not a way that corporate governance can directly help with agency issues. Corporate governance refers to the system of rules, practices, and processes by which a company is directed and controlled, with the goal of ensuring that management acts in the best interest of shareholders and other stakeholders.
Acquisitions may benefit from subsidiaries because
Acquisitions may benefit from subsidiaries because they can be tailored to suit the acquirer's specific strategic goals and objectives. When a company acquires a subsidiary, it gains control over the operations and assets of that subsidiary. This gives the acquirer the opportunity to tailor the subsidiary's activities and operations in alignment with its own business strategies and market objectives.
Snyder Golf Co. plans to construct a golf club in Brazil.
Foreign Direct Investment (FDI) refers to the investment made by a company or individual from one country into a business or project located in another country. It involves the direct ownership or control of assets in the foreign country.
Political risk is the threat of value loss as a result of
Political risk refers to the threat of value loss or adverse impacts on investments or business operations due to government or public actions in a country or region. These risks arise from the political and regulatory environment and can have a significant effect on businesses, investments, and economic activities.
MNC's objective is to increase accounting profitability by moving money around the
The aim of Multinational Corporations (MNCs) is indeed to boost accounting profitability by shifting funds around the world. MNCs operate in multiple countries and regions, and they strategically manage their financial resources to optimize profitability on a global scale.
Portfolio investing focuses on
Portfolio investing focuses on investing in different securities to create a diversified investment portfolio. A portfolio refers to a collection of various financial assets, such as stocks, bonds, mutual funds, exchange-traded funds (ETFs), and other investment instruments, held by an individual or an institutional investor.
Existence of is one of the often occurring factors that opposes the recognition of an MNC's objective.
One of the generally prevalent aspects conflicting with the recognition of the ambition of a Multinational Corporation (MNC) is the existence of the agency problem. The agency problem, as mentioned earlier, refers to the conflict of interest that arises between the shareholders (the principals) and the management (the agents) of a company.
Effects of 9/11 are
The effects of the 9/11 terrorist attacks on September 11, 2001, were indeed associated with economic instability. The attacks had significant and far-reaching impacts on various aspects of the global economy, both in the short and long term.
Investors consider political risk to be
Investors generally take political hazard as "discouraged." Political hazard refers to the potential risks and uncertainties arising from the political and regulatory environment in a country or region. It includes factors such as changes in government policies, political instability, legal and regulatory changes, nationalization of assets, and geopolitical tensions. Political hazard can create uncertainty and increase the risks associated with investments and business operations in that particular country or region.
All manufacturing parameters operate flawlessly in the real world.
The immobility of factors of production is a fundamental concept in economics, and it plays a crucial role in resource allocation, international trade, and economic development. Economic analysis considers the varying degrees of mobility of factors and how it impacts economic activities and policies.
The least dangerous means by which businesses conduct international trade is
When organizations engage in international trade, they conduct transactions involving the export and import of goods and services across borders. International trade allows companies to access foreign markets without having to establish a physical presence in those countries. It is generally considered a less risky method compared to other methods like establishing new subsidiaries or engaging in foreign direct investment (FDI).
Effective tools for superb corporate governance companies include
The board of directors is one of the effective tools for superb corporate governance in companies. Corporate governance refers to the system of rules, practices, and processes by which a company is directed, controlled, and managed. It involves balancing the interests of a company's many stakeholders, such as shareholders, management, customers, suppliers, financiers, government, and the community.
The riskiest method for companies to conduct international business is
Establishing new subsidiaries in foreign countries is often the riskiest and most resource-intensive method of international expansion for firms. When a company decides to create new subsidiaries in foreign markets, it involves significant investments, long-term commitments, and a deeper involvement in the local business environment.