Business > QUESTIONS & ANSWERS > Lecture 1 - Multi-financial Management Questions With Correct Answers 2023 (All)
Lecture 1 - Multi-financial Management Questions With Correct Answers 2023
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What is a multinational enterprise? - ANS-any business that has operating branches, subsidiaries, or affiliates located in foreign countries What are assets? - ANS-Debt securities issued by governm... ents (e.g., U.S. Treasury Bonds). These form the baseline for other forms of financing. What are institutions? - ANS-The central banks, commercial, and investment banks. Their health keeps the global financial system stable. What are linkages? - ANS-The interbank networks using currency. Without ready exchange of currencies the market is hard-pressed to operate efficiently. Eurocurrencies - ANS-These are domestic currencies of one country on deposit in a second country (major linkages in the global capital market) Eurocurrencies Interest Rates - ANS-Interest rate is referred to as the LIBOR.- Oftentimes a low spread exists with deposit and loan rates. Theory of Comparative Advantage - ANS-a theory which states that countries benefit from specializing in (and exporting) goods and services in which they have relative advantage, and they benefit from importing goods and services in which they have a relative disadvantage Comparative advantage shifts... - ANS-Over time, as less developed countries become developed and realize their latent opportunities What does the classical model of comparative advantage not really address ? - ANSThe effect of uncertainty and information costs, the role of differentiated products in imperfectly competitive markets, and economies of scale What is comparative advantage of the 21st Century more based on? - ANS-Services, and their cross-border facilitation by telecommunications and the Internet. It takes a relative advantage in costs, not just an absolute advantage, to create... - ANSComparative advantage Name 4 key limitations of the comparative advantage theory - Continues... [Show More]
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