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Pirates

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University of Kentucky Gatton College of Business and Economics International Finance FIN 423 Problem Set 1, Spring 2013

Due date: Jan 17, 2013

Name: _________________________

Please write all answers on this page, and turn in this page only. 1. _______ 2. _______ 3. _______ 4. _______ 5. _______ 6. _______ 7. _______ 8. _______ 9. _______ 10. _______ 11. _______ 12. _______ 13. _______ 14. _______ 15. _______ 16. _______ 17. _______ 18. _______ 19. _______ 20. _______

1. The commonly accepted goal of the MNC is to: A) maximize shortterm earnings. B) maximize shareholder wealth. C) minimize risk. D) A and C. E) maximize international sales.

2. For the MNC, agency costs are typically: A) nonexistent. B) larger than agency costs of a small purely domestic firm. C) smaller than agency costs of a small purely domestic firm. D) the same as agency costs of a small purely domestic firm.

3. Which of the following is not a form of corporate control that could reduce agency problems for an MNC? A) stock options. B) hostile takeover threat. C) investor monitoring. D) all of the above are forms of corporate control that could reduce

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