Finc415 Exam 1
Finance 415
Exam I
Review Questions
Suggestions 1) Read chapters 1 – 5 and review the PPTs we covered in class. 2) Expect 5 or 7 short-answer questions
General Questions – 1. In class we reviewed three firms in three different countries. The M/S Milad Nor Company in Afghanistan, Caritex in Bulgaria, and Obod in Montenegro. Each company was faced with different problems and issues. Please briefly summarize the similarities between the firms and their individual issues. How do the problems faced by these firms compare to problems faced by similar firms in more developed countries? 2. Your stock market simulation calls for you to invest in securities with a significant presence outside the US – debt, equity, commodities, currencies, derivatives… In researching equities trading on exchanges outside of the US what similarities/differences have you found compared to firms trading on exchanges in the US?
Chapter 1
1. The term globalization has become very widely used in recent years. How would you define it?
2. What does an MNE need in order for it to create value through the globalization process?
3. How does the concept of capitalism actually apply to the globalization process of a business, as it moves from elemental to multinational stages of development?
4. Define and explain the theory of comparative advantage
5. Key to understanding most theories is what they say and they don’t. Name four or five key limitations to theory of comparative advantage.
6. Why have Eurocurrencies and LIBOR remained the centerpiece of the global financial marketplace for so long? * These are domestic currencies of one country on deposit in a second country * The Eurocurrency markets serve two valuable purposes: * Eurocurrency deposits are an efficient and convenient money market device for holding excess corporate liquidity * The Eurocurrency market is a major source of short-term bank loans to finance corporate working
Exam I
Review Questions
Suggestions 1) Read chapters 1 – 5 and review the PPTs we covered in class. 2) Expect 5 or 7 short-answer questions
General Questions – 1. In class we reviewed three firms in three different countries. The M/S Milad Nor Company in Afghanistan, Caritex in Bulgaria, and Obod in Montenegro. Each company was faced with different problems and issues. Please briefly summarize the similarities between the firms and their individual issues. How do the problems faced by these firms compare to problems faced by similar firms in more developed countries? 2. Your stock market simulation calls for you to invest in securities with a significant presence outside the US – debt, equity, commodities, currencies, derivatives… In researching equities trading on exchanges outside of the US what similarities/differences have you found compared to firms trading on exchanges in the US?
Chapter 1
1. The term globalization has become very widely used in recent years. How would you define it?
2. What does an MNE need in order for it to create value through the globalization process?
3. How does the concept of capitalism actually apply to the globalization process of a business, as it moves from elemental to multinational stages of development?
4. Define and explain the theory of comparative advantage
5. Key to understanding most theories is what they say and they don’t. Name four or five key limitations to theory of comparative advantage.
6. Why have Eurocurrencies and LIBOR remained the centerpiece of the global financial marketplace for so long? * These are domestic currencies of one country on deposit in a second country * The Eurocurrency markets serve two valuable purposes: * Eurocurrency deposits are an efficient and convenient money market device for holding excess corporate liquidity * The Eurocurrency market is a major source of short-term bank loans to finance corporate working