国际金融 International Finance Test Bank_13

Chapter 13—Direct Foreign Investment

1. Based on the text, it should be obvious that markets are ____ in reality, and consequently,

monopolistic advantages ____ be exploited.

a. perfect; may possibly

b. perfect; cannot

c. imperfect; may possibly

d. imperfect; cannot

ANS: C PTS: 1 2. When a firm analyzes the feasibility of a project, it should consider the:

a. variability of the project's cash flow.

b. correlation of the project's cash flow relative to the prevailing cash flows of the MNC.

c. A and B

d. none of the above

ANS: C PTS: 1 3. The ____ a project's variability in cash flows, and the ____ the positive correlation between the

project's cash flow and the MNC's cash flow, the lower the risk of the project.

a. higher; higher

b. higher; lower

c. lower; lower

d. lower; higher

ANS: C PTS: 1

4. More than 50% of the DFI by U.S. firms is in Mexico. a. True b. False ANS: F PTS: 1 5. Consider Firm A and Firm B that both produce the same product. Firm A would more likely have

more stable cash flows if its percentage of foreign sales were ____ and the number of foreign countries it sold products to was ____.

a. higher; large

b. higher; small

c. lower; small

d. higher; large

ANS: A PTS: 1 6. According to the text, a firm may be able to achieve a "more efficient" project portfolio if it:

a. focuses solely on one product.

b. focuses solely on one location to market what it produces.

c. A and B

d. none of the above

ANS: D PTS: 1 7. According to information in the text, a host government would be least likely to provide incentives for

direct foreign investment (DFI) into its country if the firm planning DFI:

a. would compete with local firms of the host country.

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