2003级研究生《国际金融管理》期终考试试题
（闭卷考试）
时间：两小时
Note: You are encouraged to answer the questions in English, but you have an option to answer the questions in Chinese if you think your ability in English language fails to meet the requirement of expreing yourself.
Please answer the following questions：(Full score: 50%)
1， Once the probability distribution of effective financing rates from financing in a foreign currency is developed, how can it be used in deciding whether to finance in the foreign currency or the home currency? (8%)
2， Explain how the MNC’s optimization of cash flow can distort the profits of each subsidiary.(6%)
3， Offer your opinion on why economies of some le developed countries with strict restrictions on international trade and direct foreign investment are somewhat independent from economies of other countries.Why would MNCs desire to enter such countries? If these countries relaxed their restrictions, would their economies continue to be independent of other economies? Explain.(8%)
4， Ventura Corporation is a U.S.-based MNC, which plans to establish a subsidiary in France.It is very confident that the Euro will appreciate against the dollar over time.The subsidiary will retain only enough revenues to cover expenses and will remit the rest to the parent each year.Would Ventura benefit more from exchange rate effects if its parent provided equity financing for the subsidiary, or if the subsidiary were financed by local banks in France? Explain.(8%)
5, Explain why the cost of capital for a U.S.-based MNC with a large subsidiary in Brazil is higher than for a U.S.-based MNC in the same industry with a large subsidiary in Japan.Aume that the subsidiary operations for each MNC are financed with local debt in the host country.(8%)
6, Identify common political factors for an MNC to consider when aeing country risk.Briefly elaborate on how each factor can affect the risk to the MNC.(6%)
7, Use what you have learnt from International Financial Management to explain the rationality behind the fact that more and more domestic firms in China are encouraged to invest overseas and build up subsidiaries in the host countries as well.
(6%)
