Multinational Financial Management simply by Alan Shapiro: Measuring and Managing Monetary Exposure Dissertation

п»їCHAPTER 11

Measuring and Managing Economic Exposure

EASY (definitional)

11. one particular During a house currency admiration, exporters may well pull out of markets that foreign competition makes ________. a) unprofitable

b) more competitive

c) profitable

d) more the liquid

Ans: a

Section: Forex trading risk and economic coverage

Level: Easy

11. 2 Economic exposure is based on the extent that the ______ of the firm will change once exchange costs change. a) value

b) current assets

c) long-term financial obligations

d) competitive advantages

Ans: a

Section: Foreign exchange risk and economic exposure

Level: Easy

11. 3 _______ exposure comes up because foreign currency fluctuations can modify a provider's future income and expenses. a) purchase

b) functioning

c) political

d) translation

Ans: n

Section: Forex trading risk and economic publicity

Level: Convenient

11. some With respect to house currency (HC) appreciation, the main element issue for a domestic organization is its degree of ______. a) market share

b) merchandise differentiation

c) marketing strategy

d) charges flexibility

Ans: d

Origin: Operating direct exposure

Level: Easy

11. 5 In the face of exchange rate unpredictability, developing a charges strategy must address two key issues: a) market selection and segmentation

b) market share plus the work force

c) market share and profit perimeter

d) business and segmentation

Ans: c

Section: Charges strategy

Level: Easy

eleven. 6 The _______ the purchase price elasticity of demand, the _____ the incentive to hold down price and thereby grow sales. a) lower, greater

b) lower, lower

c) greater, decrease

d) greater, greater

Ans: d

Section: Operating exposure

Level: Easy

11. several During periods of exchange rate unpredictability, firms getting _______ items face more exchange price risk the fact that firms offering _________ items. a) low demand, popular

b) low supply, excessive supply

c) undifferentiated, differentiated

d) differentiated, undifferentiated

Ans: c

Section: Operating exposure

Level: Convenient

11. almost 8 With respect to creation management of exchange risk, ________ and plant location are the primary variables that companies may possibly change to manage the risk. a) product development

b) item retirement

c) market selection

d) product sourcing

Ans: a

Section: Item strategy

Level: Easy

eleven. 9 A method an MNC may increase productivity in the face of exchange charge volatility through revising ________. a) item offerings

b) the insight mix

c) and shifting production between plants

d) the promotional strategy

Ans: a

Section: Product strategy

Level: Easy

11. 10 The greatest increase to a business's competitiveness comes from compressing time it takes to bring new and improved products to market also known as _________. a) product development

b) the item cycle

c) input mixture

d) industry segmentation

Ans: b

Section: Planning for exchange rate changes

Level: Convenient

11. eleven While the strategic marketing and production adjustments take place over the long term, financial supervision may financial the firm's operations such that shortfalls in cash goes during the changes are offset by a reduction in __________ bills. a) advertising

b) production

c) debt-servicing

d) hedging

Ans: c

Section: Financial supervision of exchange rate risk

Level: Convenient

MEDIUM (applied)

11. doze A fragile dollar can

a) power American exporters to raise their very own foreign currency prices b) permit American importers to reduce their dollar costs

c) enable American exporters to enhance their income d) price American exporters market share in another country

Ans: c

Section: Genuine exchange rate changes and exchange price risk

Level: Medium

14. 13 A firm producing an undifferentiated product and competitive with internationally diversified competitors will encounter a relatively _____ price firmness of demand for its products and still have...



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