With a MNC

question 62

Multiple Choice

With a MNC

• A)the decision to set a transfer price is further complicated by import duty considerations.
• B)the decision to set a transfer price can be further complicated by exchange rate restrictions imposed by governments.
• C)the decision to set a transfer price is further complicated by tax considerations, if there is a difference in tax rates between the host country and the home country.
• D)all of the above

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Definitions:

CDOs

Collateralized Debt Obligations are complex financial instruments that pool together various cash flow-generating assets and repackages this asset pool into discrete tranches that can be sold to investors.

Credit Crisis

A financial situation characterized by a severe shortage of credit or loans, often resulting in widespread financial and economic instability.

Special Purpose Vehicles

Entities created for a specific financial transaction or to isolate financial risk, used in securitizations and project finance.

Asset Securitization

The process of pooling and repackaging of homogenous illiquid financial assets into securities that can be sold to investors.