Exercises

1.True/False questions

(1)The primary objective of the multinational corporation is still the same primary objective of any firm, i.e., to maximize shareholder wealth.

(2)The theory of comparative advantage implies that countries should specialize in production, thereby relying on other countries for some products.

(3)The total impact of transaction exposure is on the overall value of the firm.

(4)There are three types of long-term international bonds.They are Global bonds, Eurobonds and foreign bonds.

2.Essay questions

(1)What’s the international capital flow? How many kinds are there?

(2)Please talk about the feature of capital flows to the emerging economies.

(3)What’s the fundamental reason for capital flows?

(4)What are the major consequences of international capital flow?

(5)What are the reasons for interest in FDI?