Which of the Following Statements Is NOT True Regarding MNEs

question 51

Multiple Choice

Which of the following statements is NOT true regarding MNEs when compared to purely domestic firms?

• A) MNEs tend to rely more on short and intermediate term debt.
• B) MNEs have greater foreign exchange risk.
• C) MNEs have greater costs of asymmetric information.
• D) MNEs have higher agency costs.

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Definitions:

Bank Mergers

A process where two or more banks consolidate their assets and operations to form a single, larger entity.

Lending Standards

Criteria set by financial institutions to determine the creditworthiness of borrowers.

Government Securities

Financial instruments issued by a government to finance its projects and operations, typically considered low-risk investments.

Supply of Money

The total amount of money available in an economy at a particular time, encompassing cash, coins, and balances held in checking and savings accounts.