Multiple Choice (15 points) 1.) The primary objective of the Multinational Corp is to a.) Maximize Shareholder wealth b.) Maximize world production C.) Minimize debt d.) Minimize the cost of doing business globally Ans: is defined as the purchase of assets or commodities on one market for immediate resale on another in order to profit from a price discrepancy: a.) Internationalization b.) Arbitrage c.) Financing d.) Total Risk Ans: The multinational financial system does not enable companies to: a.) Avoid currency controls b.) Reduce taxes c.) Access lower cost financing sources d.) Avoid exchange rate risk 3.) Ans: 4.) Multinational firms a) are riskier than purely domestic firms because of the exposures of operating abroad b) are less risky than purely domestic firms because of international diversification c) may be less risky than domestic firms if the added risks of operating overseas are more than offset by the ability to operate in nations whose economic cycles are not perfectly in phase d) invest in developed countries only and avoid developing economies Ans: 5.) Which one of the following provides strong evidence that internationalization continues to grow in the world economy? a.) import restrictions by the Bush Administration on foreign steel b.) efforts suggested by politicians to restrict the sourcing of foreign products by locally headquartered multinationals c.) the growing volume of foreign direct investment by U.S. as well as other multinational companies pressure on governments to embargo unfriendly nations Ans: d.)