Test bank International Finance MCQ (word)Chap 10.docVIP

Fundamentals of Multinational Finance, 3e (Moffett) Chapter 10 Operating Exposure 10.1 Multiple Choice and True/False Questions 1) Another name for operating exposure is ________ exposure. A) economic B) competitive C) strategic D) all of the above Answer: D Topic: Operating Exposure Skill: Recognition 2) What type of international risk exposure measures the change in present value of a firm resulting from changes in future operating cash flows caused by any unexpected change in exchange rates? A) transaction exposure B) accounting exposure C) operating exposure D) translation exposure Answer: C Topic: Operating Exposure Skill: Recognition 3) The goal of operating exposure analysis is to identify strategic operating techniques the firm might adopt to enhance value in the face of unanticipated exchange rate changes. Answer: TRUE Topic: Operating Exposure Skill: Conceptual 4) ________ cash flows arise from intracompany and intercompany receivables and payments while ________ cash flows are payments for the use of loans and equity. A) Financing; operating B) Operating; financing C) Operating; accounting D) Accounting; financing Answer: B Topic: Operating and Financial Cash Flows Skill: Recognition 5) Operating cash flows may occur in different currencies and at different times, but financing cash flows may occur only in a single currency. Answer: FALSE Topic: Operating and Financial Cash Flows Skill: Recognition 6) Which of the following is NOT an example of a financial cash flow? A) parent invested equity capital B) interest on intrafirm lending C) payment for goods and services D) intrafirm principal payments Answer: C Topic: Financial Cash Flows Skill: Recognition 7) Which of the following is NOT an example of an operating cash flow? A) management fees and distributed overhead B) royalties and license fees C)