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:

True Power

The actual power consumed by a circuit, calculated as the product of the voltage, current, and the cosine of the phase angle between them in a resistive load, measured in watts.

Series RL Circuit

An electrical circuit composed of resistors (R) and inductors (L) connected in a series configuration, affecting the phase and amplitude of the circuit's response.

Inductive Reactance

The resistance offered by an inductor to alternating current, which varies with the frequency of the current and the inductance, also measured in ohms.

Power Factor

A dimensionless number between 0 and 1 that represents the ratio of the real power flowing to the load to the apparent power in the circuit.