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:

Management

Management entails the planning, organizing, leading, and controlling of a company's resources to achieve its goals and objectives.

Finance

The management of money and other assets, or the science of management of funds.

Financial Security

Financial security refers to the peace of mind felt when one is not worried about their income being sufficient to cover their expenses; it also pertains to the stability and predictability of future financial prospects.

Government Bond

A type of investment where you lend money to a government in exchange for an agreed rate of interest over a certain period of time.