1.1 The Global Financial Marketplace
1) Which of the following firms are NOT considered to be multinational enterprises (MNEs) even if they have operations in more than one country?
A) for-profit companies
B) not-for-profit organizations
C) non-government organizations (NGOs)
D) all of the above may be considered MNEs
2) “BRIC” is a term coined in 2001 to refer to a group of countries at about the same stage of advanced economic development. The BRIC countries are ________.
A) Belgium, Romania, Italy, and Canada
B) Brazil, Russia, India, and China
C) Britain, Romania, Israel, and Colombia
D) Brazil, Russia, Italy, and Chile
3) According to the authors, which of the following groups or securities are at the “heart” to the global capital markets?
A) debt securities issued by governments
B) bank loans and corporate bons
C) equity securities
D) derivative securities
4) ________ are the largest markets in the world.
A) United States equity markets
B) European debt markets
C) Global currency markets
D) Chinese export markets
5) Domestic currencies of one country on deposit in a second country are called ________.
A) export deposits
B) eurocurrencies
C) import deposits
D) forocurrencies
6) Eurocurrency deposits are an efficient and convenient money market device for holding excess corporate liquidity.
7) The Eurocurrency loan market is characterized by narrow interest rate spreads between deposit and loan rates. This is due in part to which of the following factors?
A) The Eurocurrency market is a “wholesale” market..
B) Loan amounts are very large, often in excess of $500,000.
C) Eurocurrency borrowers are typically large, low-risk corporations or government entities.
D) All of the above are legitimate reasons for the narrow spread in the Eurocurrency market.