Question 1

The regional CFOs play an important role in the functioning of an organization with a decentralized structure.Explain.

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Question 2

_____ refers to using financial instruments to reduce adverse price movements by taking an offsetting position.

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Question 3

_____ refers to a central location where the cash balances of a parent and its subsidiaries are pooled.

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Question 4

What repercussions did the US CFOs anticipate when the Chinese government decided to allow the Yuan to float more freely in relation to other international currencies in 2010?

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Question 5

_____ is the risk of a change in the exchange rate that will adversely affect the company.

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Question 6

What are the advantages of centralized depositories?

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Question 7

_____ refers to a country that has very advantageous (i.e., low) corporate income taxes.

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Question 8

_____ refers to the ways in which a multinational firm's assets are financed, from short-term borrowing to long-term debt and equity.

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Question 9

The process of _____ budgeting helps a firm decide which major investment projects will be most economically advantageous for the firm by assessing each project's benefits, costs, and risks.

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Question 10

One alternative investment strategy approved by the Sharia is _____ that allows profit and loss sharing.

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Question 11

In case of a _____ contract the firm will pay that rate specified at the beginning of the contract regardless of what the current exchange rate is at the date of the final settlement.

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Question 12

In the case of _____ financing, firms can borrow money from banks or by selling bonds.

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Question 13

_____ financial statements demonstrate that firms, although legally separate from the parent and each other, are in fact economically interdependent.

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Question 14

The downsides of a(n) _____ financial organization structure are higher costs (due to having to hire more employees), some unavoidable duplication of effort, and a diminishment of control.

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Question 15

_____ refers to the company-generated forecast of future spot exchange rates.

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Question 16

What are the advantages of a fronting loan?

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Question 17

_____ refers to Islamic law which, in terms of finance, prohibits charging interest on money and other common business activities, including short selling.

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Question 18

When a subsidiary obtains funding through a _____ it allows both the subsidiary and the parent eliminate paying transaction costs to an outside entity such as a bank, which would charge fees to make the transaction.

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Question 19

Explain how Brazilian government policies have boosted foreign investment and innovation.

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Quiz 15: Understanding the Roles of Finance and Accounting in Global Competitive Advantage