Chapter 11 Global Capital Markets: International Business: Environments and Operations, 16e (Daniels Et Al.)

International Business: Environments and Operations, 16e (Daniels et al.
)
Chapter 11 Global Capital Markets
1) The long-term financing dimension of financial management ________.

A) deals with the selection, issuance, and management of long-term debt and equity
B) is unaffected by currency changes because everyone borrows in U.S. dollars
C) focuses on the analysis of investment opportunities
D) is independent of the capital structure of an MNE
Answer: A
Diff: 2
Learning Outcome: Discuss the factors influencing financial management decisions in
international business
Skill: Concept
Objective: 11-1 Describe the finance function of an MNE in a global context
AACSB: Analytical thinking
2) The long-term financing dimension of cash management ________.

A) deals with the selection, issuance, and management of long-term debt and equity
B) is unaffected by currency changes because everyone borrows in U.S. dollars
C) focuses on the analysis of investment opportunities
D) is independent of the capital structure of an MNE
Answer: A
Diff: 2
Skill: Concept
AACSB: Application of knowledge
3) The CFO's function in a company focuses on ________.

A) improving distributor relationships
B) acquiring financial resources
C) handling accounting issues
D) creating financial statements
Answer: B
Diff: 2
Skill: Concept
1
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4) Acquiring and allocating financial resources among the company's activities and projects is
the responsibility of the ________.
A) accounting function of the firm
B) external auditors
C) CFO
D) financial marketing manager
Answer: C
Diff: 2
Skill: Concept
5) A Chief Financial Officer (CFO) in an international company would most likely be

responsible for all of the following activities EXCEPT ________.
A) managing short-term capital needs
B) making financial decisions
C) making investment decisions
D) managing employee repatriation
Answer: D
Diff: 2
Skill: Concept
6) The long-term financing dimension of financial management deals with the selection,
issuance, and management of long-term debt and equity.
Answer: TRUE
Diff: 1
Skill: Concept
7) Acquiring and allocating financial resources among the company's activities and projects is
the responsibility of the financial marketing manager.
Answer: FALSE
Diff: 1
Skill: Concept
2
8) You are the chief financial officer at an MNE. What are your main responsibilities in this
position? What taxation issues have a significant effect on the decisions you make?
Answer: One of the most important people on the management team, crucial to a company's
success, is the vice president of finance, also known as the chief financial officer (CFO). The
CFO acquires financial resources and allocates them among the company's activities and
projects. Acquiring resources means generating funds either internally or from sources external
to the company at the lowest possible cost. The CFO's job is more complex in a global
environment than in the domestic setting because of forces such as foreign-exchange risk,
currency flows and restrictions, different tax rates and laws pertaining to the determination of
taxable income, and regulations on access to capital in different markets. Tax planning is a
crucial responsibility for the CFO, because taxes can profoundly affect profitability and cash
flow. Taxation has a strong impact on several choices made by the CFO, such as location of
operations; choice of operating form, such as export or import, licensing agreement, or overseas
investment; legal form of the new enterprise, such as branch or subsidiary; possible facilities in
tax-haven countries to raise capital and manage cash; method of financing, such as internal or
external sourcing and debt or equity; capital budgeting decisions; and method of setting transfer
prices.
Diff: 3
Skill: Synthesis
AACSB: Reflective thinking
9) The financial management activity that determines the proper mix of debt and equity is
________.
A) capital structure
B) long-term financing
C) capital budgeting
D) working capital management
Answer: A
Diff: 2
Skill: Concept
Objective: 11-2 Define leverage and how it affects the choice of capital structure
3
10) In a country like Russia, where there is a great deal of corruption, an MNE would most likely
use ________ to fund corporate activities.
A) equities
B) debt
C) cash
D) countertrade
Answer: B
Diff: 2
Skill: Concept
11) The degree to which a firm funds the growth of a business by debt is known as ________.
A) leveraging
B) equity financing
C) hedging
D) after-tax cost of debt
Answer: A
Diff: 1
Skill: Concept
12) The concept of leveraging in finance refers to ________.

A) the degree to which companies rely on foreign exchange to fund operations
B) how a company hedges its foreign currency obligations
C) the degree to which a firm funds the growth of a business by debt
D) how much cash the CFO has in the bank
Answer: C
Diff: 2
Skill: Concept
4
13) Equity financing is the degree to which a firm funds the growth of a business by debt.
Answer: FALSE
Diff: 1
Skill: Concept
14) Another source of financing, in which an investor takes an ownership position in return for
shares of stock in the company and the promises of capital gains, is called debt financing.
Answer: FALSE
Diff: 1
Skill: Concept
15) The international bond market is much larger and more lucrative than the domestic bond
market.
Answer: FALSE
Diff: 2
Skill: Concept
16) What are the major sources of internal funds for MNEs? Why do many MNEs acquire
external funds through the Eurodollar market?
Answer: The major sources of internal funds for an MNE are dividends, royalties, management
fees, loans from parent to subsidiaries and vice versa, purchases and sales of inventory, and
equity flows from parent to subsidiaries. The Eurodollar market is the most significant
eurocurrency market. A Eurodollar is a certificate of deposit in dollars in a bank outside of the
United States. Most Eurodollar CDs are held in London, but they could be held anywhere outside
of the United States, including the Bahamas, the Cayman Islands, Hong Kong, Japan, the
Netherlands Antilles, etc. A major advantage of the Eurodollar market is that it is not regulated
by the U.S. Federal Reserve Bank.
Diff: 3
Skill: Synthesis
5
17) All of the following are part of the global financial system EXCEPT the ________.
A) New York Stock Exchange
B) World Trade Organization
C) International Monetary Fund
D) Bank for International Settlements
Answer: B
Diff: 1
Skill: Concept
Objective: 11-3 Explain the different ways to access debt internationally
18) MNEs most likely use offshore debt markets ________.

A) to hide their cash from tax authorities
B) to take advantage of their ability to access capital in different countries
C) since debt in foreign countries is always cheaper than in the home-country market
D) because investors don't like to invest in companies that only raise capital in their home
markets
Answer: B
Diff: 2
Skill: Concept
AACSB: Diverse and multicultural work environments
19) What is a Eurodollar?

A) a euro held by an American
B) a U.S. dollar deposited in a European bank
C) a euro deposited in a U.S. bank.
D) any currency deposited in a country other than the country of issue
Answer: B
Diff: 2
Skill: Concept
6
20) What term refers to a currency on deposit outside its country of issue?
A) Eurocurrency
B) Eurodollar
C) Euroyen
D) Europound
Answer: A
Diff: 1
Skill: Concept
21) Which of the following is NOT an advantage associated with Eurocurrencies?

A) more convenience for users
B) better yield for lenders
C) tighter U.S. regulation
D) cheaper lending rates
Answer: C
Diff: 2
Skill: Concept
22) Which of the following financing tactics would most likely help an MNE avoid bankruptcy?
A) integrating e-commerce opportunities with domestic sales in order to maintain a steady
balance of income and expenditures
B) agreeing to forward contracts with customers and hedging purchases and sales on future
currency rates
C) organizing the capital structure so that the amount of debt financing is twice the level of
equity financing
D) keeping the percentage of debt in the capital structure to a level that can be managed even
during difficult business conditions
Answer: D
Diff: 3
Skill: Concept
7
23) Which of the following is most likely a benefit for firms that participate in the global capital
market?
A) numerous investment opportunities
B) large pool of financing sources
C) equally balanced capital structure
D) quick sale of stocks and bonds
Answer: B
Diff: 2
Skill: Concept
24) The global capital market offers all of the following advantages to firms EXCEPT ________.
A) short-term financing options
B) numerous investment opportunities
C) wide array of financing sources
D) financing at reduced cost
Answer: A
Diff: 2
Skill: Concept
25) When using equity financing, firms run the risk of ________.
A) losing a controlling interest to shareholders
B) acquiring capital through the sale of shares
C) incurring an unmanageable amount of debt
D) falling victim to currency exchange rates
Answer: A
Diff: 2
Skill: Concept
8
26) Which of the following is a characteristic of the Eurocurrency market?
A) The Eurocurrency market is both short and medium term.
B) Private borrowers are the major players in the Eurocurrency market.
C) The Eurocurrency market is a retail, rather than wholesale, market.
D) The interest rates in the Eurocurrency market are about the same as in domestic markets.
Answer: A
Diff: 3
Skill: Concept
27) Libor is best defined as the ________.

A) interest rate of the National Bank of London
B) short-term interest rate for dollars held in the Eurodollar market
C) interest rate of the European Union
D) deposit rate that applies to commercial loans in the European Union
Answer: B
Diff: 1
Skill: Concept
28) On the basis of which interest rate are Eurocredits often quoted?
A) United States Prime Rate
B) European Central Bank Offer Rate
C) London Interbank Offered Rate
D) International Monetary Fund Interest Rate
Answer: C
Diff: 1
Skill: Concept
9
29) A situation in which several banks pool resources in the Eurocurrency market to extend
credit to a borrower and spread the risk is known as ________.
A) credit collaboration
B) leverage equity financing
C) syndication
D) short-term Eurocurrency financing
Answer: C
Diff: 1
Skill: Concept
30) A bond issue floated by a U.S. company in dollars in London, Luxembourg, and Switzerland
by a syndication of bonds is an example of a ________.
A) global bond
B) domestic bond
C) Eurobond
D) foreign bond
Answer: C
Diff: 2
Skill: Application
31) The international bond market is a major source of debt financing for which of the
following?
A) world governments
B) regional organizations
C) small firms
D) small businesses
Answer: A
Diff: 2
Skill: Concept
10
32) Which of the following countries has the largest market for domestic bonds?
A) United Kingdom
B) United States
C) Japan
D) China
Answer: B
Diff: 2
Skill: Concept
33) A bond that is issued by Nestle, a Swiss company, which is denominated in yen and sold to
residents of Japan is most likely a ________.
A) Eurobond
B) global bond
C) foreign bond
D) country fund
Answer: C
Diff: 2
Skill: Concept
34) A bond issued by a Brazilian company in British pounds in London is a ________.

A) Eurobond
B) global bond
C) local bond
D) foreign bond
Answer: D
Diff: 2
Skill: Application
11
35) Firms most likely borrow money in the international bond market to ________.
A) guarantee high yields and low rates
B) enable diversification of funding sources
C) protect against costly government regulations
D) allow emerging markets to invest in foreign exchange
Answer: B
Diff: 2
Skill: Concept
AACSB: Diverse and multicultural work environments
36) Brooke buys shares of stock in a small bakery in a foreign country in return for an ownership
position and promised capital gains. This is an example of ________.
A) equity securities
B) debt financing
C) playing the stock market
D) investing in Euroequities
Answer: A
Diff: 2
Skill: Application
37) The market for shares sold outside the boundaries of the issuing company's home country is
the ________.
A) Eurocurrency market
B) international bond market
C) international equity market
D) Euroequity market
Answer: D
Diff: 1
Skill: Concept
12
38) The stock market is also known as the ________.
A) capital market
B) foreign-exchange market
C) bond market
D) equity capital market
Answer: D
Diff: 1
Skill: Concept
39) A(n) ________ is a large, liquid financial asset that can be traded anywhere at any time.
A) international stock
B) global bond
C) global equity
D) Eurodollar
Answer: B
Diff: 1
Skill: Concept
40) A negotiable certificate issued by a U.S. bank to represent the underlying shares of a foreign
corporation's stock is called a(n) ________.
A) Euroequity
B) American Depositary Receipt
C) Global Depositary Receipt
D) European Depositary Receipt
Answer: B
Diff: 1
Skill: Concept
13
41) Depositary receipts traded outside the United States are called ________ depositary receipts.
A) Euro
B) Global
C) American
D) None of the above
Answer: B
Diff: 1
Skill: Concept
42) Each ADR represents ________ of the shares of the underlying foreign stock.
A) some number
B) 100
C) 1
D) ADRs have nothing to do with foreign stocks.
Answer: A
Diff: 1
Skill: Concept
43) A firm would decide to delist its stock from a foreign stock exchange for all of the following
reasons EXCEPT ________.
A) the best price for the stock is in the home market
B) there is increased regulation in that particular foreign market
C) there are weak market returns on the stock
D) there are high trading volumes on the stock
Answer: D
Diff: 1
Skill: Concept
14
44) ADRs that are created at the request of a foreign firm wanting its shares traded in the United
States are ________.
A) facilitated
B) unfacilitated
C) sponsored
D) unsponsored
Answer: C
Diff: 1
Skill: Concept
45) The best way for a Euroequity to get a listing in the United States is to issue a(n) ________.
A) Global Depositary Receipt
B) European Depositary Receipt
C) American Depositary Receipt
D) Domestic Depositary Receipt
Answer: C
Diff: 2
Skill: Concept
46) Which of the following was NOT a contributing factor to the turmoil in the global stock
market in the last few years?
A) a decline in oil prices
B) the revaluation of the euro
C) emerging markets lowering interest rates
D) a rise in interest rates in the United States
Answer: B
Diff: 2
Skill: Concept
15
47) A Eurocurrency is any currency that is banked outside its country of origin.
Answer: TRUE
Diff: 1
Skill: Concept
48) The Eurocurrency market is a retail, rather than wholesale, market.

Answer: FALSE
Diff: 2
Skill: Concept
49) The Eurocurrency market is limited to exchanges that include the euro.
Answer: FALSE
Diff: 1
Skill: Concept
50) Low-cost Eurocurrency loans can be obtained in offshore financial centers.

Answer: TRUE
Diff: 2
Skill: Concept
51) A French company floating a bond issued in Swiss francs in Switzerland would be selling a
foreign bond.
Answer: TRUE
Diff: 2
Skill: Application
16
52) The Japanese yen makes up the largest portion of the international bond market.
Answer: FALSE
Diff: 1
Skill: Concept
53) The dominant currencies in the international bond market are the euro and the U.S. dollar.
Answer: TRUE
Diff: 2
Skill: Concept
54) An ADR is a negotiable certificate issued by a U.S. bank in the United States to represent the
underlying shares of a foreign corporation's stock held at a custodian bank in the foreign country.
Answer: TRUE
Diff: 1
Skill: Concept
55) Why do many MNEs acquire external funds through the Eurodollar market?
Answer: The Eurodollar market is the most significant Eurocurrency market. A Eurodollar is a
certificate of deposit in dollars in a bank outside of the United States. Most Eurodollar CDs are
held in London, but they could be held anywhere outside of the United States, including the
Bahamas, the Cayman Islands, Hong Kong, Japan, the Netherlands Antilles, etc. A major
advantage of the Eurodollar market is that it is not regulated by the U.S. Federal Reserve Bank.
Diff: 3
Skill: Synthesis
17
56) What are the major sources of external funds for an MNE's normal operations? Why do
MNEs use offshore financial centers to raise funds?
Answer: Two major sources of funds external to the MNE's normal operations are debt markets
and equity markets. Offshore financial centers such as Bahrain, the Caribbean, Hong Kong,
London, New York, Singapore, and Switzerland deal in large amounts of foreign currency and
enable companies to take advantage of favorable tax rates. These centers provide an alternative,
usually cheaper, source of funding for MNEs so that they don't have to rely strictly on their own
national markets.
Diff: 3
Skill: Synthesis
57) How do countries differ in terms of taxation? In regards to taxation, why do some MNEs turn
to offshore financial centers? Why are offshore financial centers a concern to the OECD?
Answer: Countries differ in terms of the types of taxes they have (income versus excise), the tax
rates applied to income, the determination of taxable income, and the treatment of foreign-source
income. Offshore financial centers such as Bahrain, the Caribbean, Hong Kong, London, New
York, Singapore, and Switzerland deal in large amounts of foreign currency and enable
companies to take advantage of favorable tax rates. A major concern with OFCs is the tax
avoidance dimension of their activities. The OECD has been working closely with the major
OFCs to ensure that they are engaged in legal activity. It uses the following key factors in
identifying tax havens: (1) no or only nominal taxes, (2) lack of effective exchange of
information (especially bank secrecy), (3) lack of transparency, and (4) no substantial activities.
Although not trying to tell the sovereign countries what their tax rates should be, the OECD is
trying to eliminate harmful tax practices.
Diff: 3
Skill: Synthesis
58) The ________ approach to corporate taxation is considered double taxation.

A) separate entity
B) integrated system
C) capital gains
D) value-added
Answer: A
Diff: 1
Skill: Concept
Objective: 11-4 Summarize how foreign source income is taxed
18
59) ________ is the price between two companies that most accurately reflects the market price.
A) Economy price
B) Promotional price
C) Arm's length price
D) Average cost
Answer: C
Diff: 1
Skill: Concept
60) Foreign branch income is ________.

A) deferred from U.S. taxation until a dividend is remitted to the parent company
B) considered passive income and therefore not subject to U.S. taxation
C) directly included in the parent's taxable income in the year in which it is earned
D) considered active income and therefore deferred until future years
Answer: C
Diff: 2
Skill: Concept
61) Foreign source income that is derived from the active conduct of a trade or business and
therefore subject to U.S. taxation is known as ________.
A) passive income
B) active income
C) uncontrollable foreign corporation income
D) tax haven income
Answer: B
Diff: 1
Skill: Concept
19
62) Subpart F income is ________.
A) usually earned by a branch rather than a corporation
B) not taxed to the parent unless a dividend is remitted
C) not eligible for the tax credit
D) passive and usually derived from operations in a tax-haven country
Answer: D
Diff: 2
Skill: Concept
63) According to U.S. tax law, if a foreign subsidiary earns income, ________.
A) its income is immediately taxable to the parent, irrespective of the type of income earned
B) that income is not taxable to the parent company as long as the subsidiary pays income taxes
in the country where it is earned
C) passive income is taxable to the parent unless the parent company is a controlled foreign
corporation
D) active income is taxable to the parent when it is remitted as a dividend
Answer: D
Diff: 2
Skill: Concept
64) A price on goods and services sold by one member of a corporate family to another is known
as a(n) ________.
A) transfer price
B) tax credit price
C) passive price
D) active price
Answer: A
Diff: 2
Skill: Concept
20
65) Transfer pricing is a strategy that may be used by MNEs to ________.
A) reduce consolidated corporate income taxes
B) partially finance a subsidiary in another country
C) transfer funds from a subsidiary to the parent corporation
D) all of the above
Answer: D
Diff: 1
Skill: Application
66) The OECD is concerned about transfer pricing practices because ________.
A) transfer pricing can help maximize a company's worldwide tax liability
B) transfer prices tend to be higher in industrial than developing countries
C) governments use transfer prices to manipulate companies' investment strategies
D) companies use transfer prices to manipulate prices and, therefore, taxes
Answer: D
Diff: 2
Skill: Concept
AACSB: Ethical understanding and reasoning
67) The primary objective of multinational tax planning is to minimize the firm's worldwide tax
burden.
Answer: TRUE
Diff: 1
Skill: Concept
68) Taxation is an important cash flow issue, but it typically does not have a strong impact on the
choice of organizational form (such as branch or subsidiary) or the location of an investment.
Answer: FALSE
Diff: 1
Skill: Concept
21
69) Subpart F income is passive and usually derived from operations in a tax-haven country.
Answer: TRUE
Diff: 1
Skill: Concept
70) The OECD has set transfer pricing guidelines to enhance the manipulation of prices and
therefore taxes for MNEs and the countries where they operate.
Answer: FALSE
Diff: 2
Skill: Concept
71) A transfer price is a price on goods and services sold by one member of a corporate family to
another.
Answer: TRUE
Diff: 2
Skill: Concept
72) A tax credit is a credit on goods and services paid by one member of a corporate family to
another.
Answer: FALSE
Diff: 2
Skill: Concept
22
73) The principle by which the tax authorities allow firms to reduce their tax liability by the
amount of income taxes paid to a foreign government is known as a tax credit.
Answer: TRUE
Diff: 2
Skill: Concept
74) A city or country that provides large amounts of funds in currencies other than its own is a(n)
________.
A) offshore financial center
B) ADR facilitator
C) interbank market
D) currency regulator
Answer: A
Diff: 1
Skill: Concept
Objective: 11-5 Analyze how offshore financial centers provide financing opportunities for
MNEs
75) ________ focus on offering banking and other financial services to nonresident customers.
A) Subsidiary banks
B) Branch banks
C) Affiliated banks
D) Offshore financial centers
Answer: D
Diff: 2
Skill: Concept
MNEs
23
76) Which of the following is a characteristic of most offshore financial centers?
A) strict domestic regulation
B) minimal banking activities
C) large foreign currency markets
D) nominal or non-existent tax rates
Answer: C
Diff: 2
Skill: Concept
MNEs
77) Which of the following countries is an important offshore financial center?

A) Turks and Caicos
B) Mexico
C) South Korea
D) Bermuda
Answer: D
Diff: 2
Skill: Concept
MNEs
78) Which of the following is a characteristic of most offshore financial centers?

A) political stability
B) services for residents
C) accounting scandals
D) a lack of legal expertise
Answer: A
Diff: 2
Skill: Concept
MNEs
24
79) Which of the following has extensive banking activities involving short-term financial
transactions?
A) booking center
B) operational center
C) foreign-exchange market
D) international regulatory market
Answer: B
Diff: 1
Skill: Concept
MNEs
80) What is the primary concern about offshore financial centers?

A) engaging in illegal activities
B) enabling firms to avoid taxation
C) allowing the transfer of large funds
D) existing in politically risky environments
Answer: B
Diff: 2
Skill: Concept
MNEs
81) Tax-haven subsidiaries categorically referred to as International Offshore Financial Centers

have all of the following characteristics EXCEPT ________.
A) a low tax on foreign investment or sales income earned by resident corporations and a low
dividend withholding tax on dividends paid to the parent firm.
B) a stable currency to permit easy conversion of funds into and out of the local currency. This
requirement can be met by permitting and facilitating the use of Eurocurrencies.
C) a stable government that encourages the establishment of foreign-owned financial and service
facilities within its borders.
D) All of these answer choices are characteristics of tax-haven subsidiaries.
Answer: D
Diff: 1
Skill: Concept
MNEs
25
82) If a foreign subsidiary is located in a low tax country, the parent company would probably
use a ________.
A) high transfer price on inventory shipped from the parent to the subsidiary
B) high transfer price on goods sold by the subsidiary to the parent
C) low transfer price on inventory shipped from the subsidiary to the parent
D) tax credit price to minimize local tax liabilities
Answer: B
Diff: 2
Skill: Application
MNEs
83) The principle by which the tax authorities allow firms to reduce their tax liability by the
amount of income taxes paid to foreign governments is known as ________.
A) transfer pricing
B) a tax credit
C) lag strategies in tax planning
D) passive income reductions
Answer: B
Diff: 2
Skill: Concept
MNEs
84) Assume that U.S. MNE A earns $100,000 of foreign source income, that the tax rate in the
foreign country is 40 percent, and that the tax rate in the United States is 35 percent. How much
total (both domestic and foreign) tax would the company pay on that foreign source income,
assuming that the tax credit principle applies?
A) $40,000
B) $35,000
C) $75,000
D) $5,000
Answer: A
Diff: 3
Skill: Application
MNEs
26
85) A major problem with MNEs using offshore financial centers is that they may give unfair tax
advantages to companies.
Answer: TRUE
Diff: 2
Skill: Concept
MNEs
86) The typical tax-haven subsidiary owns the common stock of its related operating foreign
subsidiaries.
Answer: TRUE
Diff: 1
Skill: Concept
MNEs
87) What is an offshore financial center? What are the main characteristics of OFCs?
Answer: Offshore financial centers are cities or countries that engage in a variety of financial
transactions and that provide significant tax advantages to companies and individuals who do
business there. These centers provide an alternative, usually cheaper, source of funding for
MNEs so that they don't have to rely strictly on their own national markets. Offshore financial
centers have one or more of the following characteristics:
a. a large foreign-currency market for deposits and loans
b. a market that is a large net supplier of funds to the world financial markets
c. a market that is an intermediary or pass-through for international loan funds
d. economic and political stability
e. an efficient and experienced financial community
f. good communications and supportive services
g. an official regulatory climate favorable to the financial industry, in the sense that it protects
investors without unduly restricting financial institutions
Diff: 3
Skill: Application
MNEs
27
88) What is a transfer price? Why are transfer prices used?
Answer: A major tax challenge, as well as impediment to performance evaluation, is the
extensive use of transfer pricing in international operations. A transfer price is a price on goods
and services sold by one member of a corporate family to another, such as a parent to its
subsidiary in a foreign country. Because the price is between related entities, it is not necessarily
an arm's-length price, that is, a price between two companies that do not have an ownership
interest in each other. Companies establish arbitrary transfer prices primarily due to differences
in taxation between countries. Companies also may set arbitrary transfer prices for competitive
reasons or because of restrictions on currency flows.
Diff: 3
Skill: Application
MNEs
28

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International Business: Environments and Operations, 16e (Daniels et al.

1) The long-term financing dimension of financial management ________.

2) The long-term financing dimension of cash management ________.

3) The CFO's function in a company focuses on ________.

5) A Chief Financial Officer (CFO) in an international company would most likely be

12) The concept of leveraging in finance refers to ________.

18) MNEs most likely use offshore debt markets ________.

19) What is a Eurodollar?

21) Which of the following is NOT an advantage associated with Eurocurrencies?

27) Libor is best defined as the ________.

34) A bond issued by a Brazilian company in British pounds in London is a ________.

48) The Eurocurrency market is a retail, rather than wholesale, market.

50) Low-cost Eurocurrency loans can be obtained in offshore financial centers.

58) The ________ approach to corporate taxation is considered double taxation.

60) Foreign branch income is ________.

77) Which of the following countries is an important offshore financial center?

78) Which of the following is a characteristic of most offshore financial centers?

80) What is the primary concern about offshore financial centers?

81) Tax-haven subsidiaries categorically referred to as International Offshore Financial Centers

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