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Flashcards in International Financial Management Deck (23):
1

A company that operates in more than one country is called a _________ corporation.

multinational

Explanation:

This is the definition of a multinational (or MNC) and indicates that these firms operate and possess assets in foreign countries.

2

One of the main benefits of operating as an MNC is the increased profits that can be gleaned from a new ______.

market

3

A new market opens up new business opportunities and hence the interest in operating _________.

globally

4

The international market for borrowing and lending in currencies that are issued outside the originating jurisdiction is called the ________.

euromarket

5

The Euromarket allows MNCs to borrow or lend monies with the minimum of ___________ regulation.

government

6

MNCs have international _________ responsibilities as their obligations lie not only in their country of origin but also in all the host countries where they operate in.

taxation

7

As their business is based in _______ tax jurisdictions, international taxation is a critical component of MNC's business operations.

multiple

8

Short-term cash management will normally employ _______ strategies to protect the MNC against the altering state of different currencies.

hedging

9

Hedging strategies will offset ____ and include borrowing and lending in foreign currencies, swapping assets with other parties etc.

risk

10

The main risk factors for an MNC are exchange rate risk and _________ risk.

political

11

Political risk is important as assets may be _______ by the government or foreign nationals repatriated.

seized

12

The exchange rate risk is defined as the risk of an investment's value changing because of ________ exchange rates.

currency

13

The worth of a business may be affected if their assets in a _____________ are negatively impacted by currency rate fluctuations.

foreign currency

14

The _______ of capital, personnel and technical assets, by an MNC to another external country is called foreign direct investment.

transfer

15

Foreign direct investment, or FDI, may be fully owned by the MNC or be a _________ with the locals.

joint venture

16

What does FDI stand for?

Foreign direct investment (FDI)

17

International bonds, foreign bonds and ________ are popular methods for MNCs to finance long-term debt.

Eurobonds

18

An __________ bond is first sold outside of the country of the borrower and is usually distributed in other countries.

international

19

_________ is a term used to describe an international equity issue occurring simultaneously on more than one national stock market.

Euroequity

20

This euroequity market is a means for MNCs to build an __________ stockholder base.

international

21

_______ and joint ventures are adopted by MNCs as a means to increase growth, diversify and synergize operations.

Mergers

22

International ________ companies are usually formed for anonymity and tax reasons.

holding

23

International holding companies offer tax benefits as they are deliberately formed in ________ offering excellent tax conditions.

countries