Question 1. One effective and ethical way to minimize agency costs is to make sure:
managers throughout the corporation follow the same practices.
no foreign managers are hired.
managers have enough money to bribe the authorities.
allow managers to make up their rules as they wish.
Question 2. The U.S. offers to build a nuclear power plant in Ecuador at a very deep discount on price. This could be considered a/an:
case of cultural relativism.
technology revanchism.
technology transfer.
debenture hegemony.
Question 3. When prices rise due to increased demand or decreased supply, this shows:
that prices reflect the supply-demand relationship.
anyone who sells anything is a thief.
that usury laws are traditionally problematic for Christians.
that consumers never have enough information for a rational decision.
Question 4. A company's managers, operating in a foreign country, should:
operate only within their own personal ethical code.
reject the foreign country's culture and practices.
be sensitive to the foreign country's traditions.
ignore all violations of U.S. law and traditions.
Question 5. A company bids to provide meals to overseas soldiers and wins. Which of these is a potential financial issue for such a government contract?
Failing to provide food for vegans
Billing the government for work not done
Official packaging not sufficiently attractive
Underbilling the government for work not done
Question 6. Because of political turmoil in the Mideast, some gas stations have raised their prices by 30%, even though there has been no change in the supply of petroleum. This could be viewed as:
insider trading.
price gouging.
a violation of GAAP.
a strategy recommended by the IFRS.
Question 7. Missy is a lobbyist for an global petroleum company, and has offered a politician stocks at a discounted price if the politician will support legislation that will benefit Missy's company. This would be a case of:
transfer gouging.
transfer trading.
bribery.
price gouging.
Question 8. Companies that offer financial services are regulated and have licensing bodies because:
financial service companies ask for more regulations.
financial services can be extremely complex to understand.
most people don't really care about credit default swaps.
some financial services are insufficiently creative.
Question 9. A corporation can increase opportunities in other countries by:
using as much child labor as possible.
bribing any government official who asks for a bribe.
seeking short term profit above all else.
setting up schools for young people.
Question 10. A U.S. Senator owns stock in a company that will be affected by a law that, if passed, will lower the profits of that company. This Senator could be said to have a/an:
equilibrium deficit.
conflict of interference.
conflict of interest.
optimal hedge strategy.