CH17

e

17. If the inflation rate in the United States is greater than the inflation rate in Britain, other things held constant, the British pound will a. Depreciate against the U.S. dollar. b. Remain unchanged against the U.S. dollar. c. Appreciate against other major currencies. d. Appreciate against the dollar and other major currencies. e. Appreciate against the U.S. dollar.

d

23. Which of the following is NOT a reason why companies move into international operations? a. To develop new markets for the firm's products. b. To better serve their primary customers. c. Because important raw materials are located abroad. d. To increase their inventory levels. e. To take advantage of lower production costs in regions where labor costs are relatively low.

c

24. Which of the following statements is NOT CORRECT? a. Foreign bonds and Eurobonds are two important types of international bonds. b. Foreign bonds are bonds sold by a foreign borrower but denominated in the currency of the country in which the issue is sold. c. The term Eurobond applies only to foreign bonds denominated in U.S. currency. d. A foreign bond might pay a higher nominal interest rate than a U.S. bond. e. Any bond sold outside the country of the borrower is called an international bond.