7. (TCO E) Other things being equal, firms from a particular home country will engage in more international acquisitions if they expect foreign currencies to _____ against their home currency and if their cost of capital is relatively _____. (Points : 5)

appreciate; low appreciate; high depreciate; high depreciate; low

Question 8.8. (TCO F) Which is not a way in which agency problems can be reduced through corporate control? (Points : 5)

Acquisition of a foreign subsidiary Monitoring by large shareholders Threat of hostile takeover Executive compensation

Question 9.9. (TCO I) With a(n) _____, the exporter ships the goods to the importer while still retaining actual title to the merchandise. (Points : 5)

letter of credit arrangement open account arrangement draft arrangement consignment arrangement

Question 10.10. (TCO G) Which is an example of economic exposure but not an example of transaction exposure? (Points : 5)

An increase in the dollar's value hurts a U.S. firm's domestic sales, because foreign competitors are able to increase their sales to U.S. customers. An increase in the pound's value increases the U.S. firm's cost of British pound payables. A decrease in the peso's value decreases a U.S. firm's dollar value of peso receivables. A decrease in the Swiss franc's value decreases the dollar value of interest payments on a Swiss deposit sent to a U.S. firm by a Swiss bank.