1. Which of the following is NOT a reason that an MNC may consider Direct Foreign Investment:a. attr

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1. Which of the following is NOT a reason that an MNC may consider Direct Foreign Investment:a. attract new sources of demandb. enter profitable marketsc. react to exchange rate movmentsd. decrease the cost of capitale. none of the above.2. A perfect hedge is possible only when an MNC is in a position to maximize currency diversification. True False3. An MNC normally purchases a currency call option in order to:a. lock in a maximum price to be paid for the currency in the future.b. to hedge payables.c. to hedge receivables.d. a. and b. onlye. all the above4. Due to available global capital and taking into account risk, an MNC (working in a developing country) will normally have a lower cost of debt than their domestic counterparts cost of debt. True False5. Which of the following is not a true statement concerning today’s global environment?a. The U.S. has a national debt approaching $20 trillion — large public debt tends to crowd out private investment and lowers future growth.b. China currently has a debt to GDP ratio of approximately 260% — eventually growth must slow in order to get debt under control.c. Both England and Greece have recently voted to leave the European Union, primarily to ensure they both regain individual control of their monetary and fiscal policies.d. none of the above, all are true statements.

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