A drawback in the use of sensitivity analysis in capital budgeting decisions is that it doesn’t A) permit evaluating alternative outcomes. B) provide estimates of net present values. C) assign probability values to outcomes. D) consider different possible rates of discount. ANSWER C
Date: September 9th, 2020
Which of the following are risks for multinational corporations but not risks for domestic corporations? A) changes in government rules and regulations B) capital controls C) changes in tax laws D) government red tape and corruption ANSWER B
Date: September 9th, 2020
Creating market power through the use of tariffs or quotas can A) drive price to the monopoly level. B) increase the world price of the good that is targeted. C) increase government revenue. D) All of the above. ANSWER D
Date: September 9th, 2020
Signals can help prevent adverse selection as long as a false signal is costly to the person sending it. Indicate whether the statement is true or false ANSWER True . If false signals can be made at little cost to the perpetrator, the signals are meaningless. Signals are believed only when they are credible. […]
Date: September 9th, 2020
The difference between sensitivity analysis and scenario analysis is A) sensitivity analysis is a method for evaluating risk while scenario analysis is not. B) sensitivity analysis is based on regression analysis while scenario analysis is not. C) sensitivity analysis examines the impact on the overall results of a change in one variable while scenario analysis […]
Date: September 9th, 2020
Which of the following represents a way in which multinational corporations can protect themselves from exchange rate risks? A) forward markets B) futures markets C) currency options D) All of the above ANSWER D
Date: September 9th, 2020
Probabilities, which are based on past data or experience, are called A) a priori. B) objective. C) uncertain. D) statistical. ANSWER D
Date: September 9th, 2020
A country uses strategic trade policy to A) increase profits that accrue to domestic producers. B) affect the exchange rate of its currency. C) impose countervailing duties. D) allow dumping of imports to increase consumer surplus. ANSWER A
Date: September 9th, 2020
If a production function is given by the equation Q = 12X + 10X2 – X3, where Q = Output and X = Input, then calculate the equations for a. average product b. marginal product c. point of diminishing average returns d. point of diminishing marginal returns ANSWER a. AP = Q/X, or 12 […]
Date: September 9th, 2020
A trade policy that allows a country to gain at the expense of other countries is called A) countervailing duty policy. B) a beggar-thy-neighbor policy. C) an antitrust policy. D) a dumping policy. ANSWER B
Date: September 9th, 2020
