国际财务管理第7版教师手册习题及答案

Chapter19

MultinationalCashManagement

True/FalseQuestions

1.Manyoftheskillsnecessaryforeffectivecashmanagementarethesameregardlessofwhether

thefirmhasonlydomesticoperationsorifitoperatesinternationally.

TrueFalse

2.Thecashmanagerofadomesticfirmshouldsourcefundsinternationallytoobtainthelowest

borrowingcostandtoplaceexcessfundswhereverthegreatestreturncanbeearnedregardless

ofcurrency.

TrueFalse

3.AnettingcenternecessarilyimpliesthattheMNChasacentralcashmanager.

TrueFalse

4.Amultilateralnettingsystemisbeneficialinreducingthenumberofandtheexpenseassociated

withinteraffiliateforeignexchangetransactions.

TrueFalse

5.Acentralcashmanagerhasaglobalviewofthemostfavorableborrowingratesandmost

advantageousinvestmentrates.

TrueFalse

6.Acentralizedcashpoolassistsinreducingtheproblemofmislocatedfundsandinfunds

mobilization.

TrueFalse

7.AcentralizedcashmanagementsystemwithacashpoolcanreducetheinvestmenttheMNC

hasinprecautionarycashbalances,savingthefirmmoney.

TrueFalse

MultipleChoiceQuestions

8.Efficientcashmanagementtechniquescan

A.reducetheinvestmentincashbalancesandforeignexchangetransactionexpenses.

B.provideformaximumreturnfromtheinvestmentofexcesscash.

C.resultinborrowingatlowestratewhenatemporarycashshortageexists.

D.alloftheabove

9.Cashmanagementrefersto

A.thedecisiontograntcredittocustomersortoremain"cashandcarry".

B.theinvestmentthefirmhasintransactionbalancesandprecautionarybalances.

C.adomesticfirm'sinvestmentinforeigncurrency.

D.noneoftheabove

10.Precautionarycashbalances

A.arenecessaryincasethefirmhasunderestimatedtheamountofcashneedtocover

transactions.

B.arenecessarytocoverscheduledoutflowsoffundsduringacashbudgetingperiod.

C.bothaandb

D.noneoftheabove

11.Precautionarycashbalances

A.representanincreasingly-importantsourceofinterestincomeformanyMNCs.

B.arenecessaryincasethefirmhasunderestimatedtheamountneededtocovertransactions.

C.aresynonymouswithspeculativecashbalances.

D.noneoftheabove

12.Multinationalcashmanagement

A.isreallynodifferentforaMNCthanforapurelydomesticfirminaclosedeconomy.

B.concernsitselfwiththesizeofcashbalances,theircurrencydenominations,andwherethese

cashbalancesarelocatedamongtheMNC'saffiliates.

C.concernsitselfwiththesizeofcashbalancesandtheircurrencydenominations,butnotwhere

thesecashbalancesarelocatedamongtheMNC'saffiliates,sinceintra-affiliatedefaultriskis

notanissue.

D.noneoftheabove

13.Goodcashmanagementboilsdownto

A.investingexcessfundsatthemostfavorableinterestrateandborrowingatthelowestrate

whenthereisatemporarycashshortage.

B.investingexcessfundsatthelowestrateandborrowingatthehighestratewhenthereisa

temporarycashshortage.

C.hedgingcurrencyexposurewithjudicioususeoffutures,forwards,andcurrencyoption

contracts.

D.noneoftheabove

ABCTradingCompanyofSingaporepurchasesspicesinbulkfromaroundtheworld,packages

themintoconsumersizequantitiesandsellsthemthroughsalesaffiliatesinHongKongandthe

UnitesStates.Forarecentmonth,thefollowingpaymentsmatrixofinteraffiliatecashflows,

statedinSingaporedollars,wasforecasted.

ABCTradingCompanyPaxmentsMatrix(S$000)

DisbursementsIv:

SingaporeHorgKongU.S.

Receiptsby:

Singapore—80110

HongKong16—44

U.S.2250

14.Calculate,inSingaporedollars,theamountthattheinteraffiliateforeignexchangetransactionwill

bereducedbywithmultilateralnetting.

A.S$152,000

B.S$170,000

C.S$322,000

D.S$405,000

15.IfforeignexchangetransactionscostABC0.45percent,whatsavingsresultsfromnetting?

A.S$684

B.S$765

C.S$1,449

D.S$1,823

16.ConsideraU.S.MNCwiththreesubsidiariesandthefollowingforeignexchangetransactions

shownatleft.UseBILATERALnettingtoreducethenumberofforeignexchangetransactionsby

half.

D.Noneoftheabove

17.ConsideraU.S.MNCwiththreesubsidiariesandthefollowingforeignexchangetransactions

shownatleft.UseMULTILATERALnettingtoreducethenumberofforeignexchange

transactions.

c.

D.Noneoftheabove

18.ConsideraU.S.MNCwiththreesubsidiariesandthefollowingforeignexchangetransactions

shownatleft.UseMULTILATERALnettingWITHACENTRALDEPOSITORYtoreducethe

D.Noneoftheabove

19.ABCTradingCompanyofSingaporepurchasesspicesinbulkfromaroundtheworld,packages

themintoconsumersizequantitiesandsellsthemthroughsalesaffiliatesinHongKongandthe

UnitesStates.Forarecentmonth,thefollowingpaymentsmatrixofinteraffiliatecashflows,

statedinSingaporedollars,wasforecasted.

ABCTradingCompanyPaymentsMatrix(S$000)

Disbursementsby:

SingaporeHongKongU.S.

Receiptsby:

Singapore一80110

HongKong16-44

U.S.2250—

Whichofthefollowingisanaccuratechartoftheircurrentsituation?

c.

20.FindthenetexposureoftheU.S.MNCwiththefollowingintraaffiliatetransactionsshown:

A.$55

B.$65

C.$800

D.Noneoftheabove

21.FindthenetexposureoftheBritishsubsidiaryoftheU.S.MNCwiththefollowingintraaffiliate

transactionsshown:

A.$40out

B.$65in

C.£20out

D.Noneoftheabove

22.Benefitsofamultilateralnettingsysteminclude:

A.Thedecreaseintheexpenseassociatedwithfundstransfer,whichinsomecasescanbeover

$1,000foralargeinternationaltransferofforeignexchange.

B.Thereductioninthenumberofforeignexchangetransactionsandtheassociatedcostof

makingfewerbutlargertransactions.

C.Thereductioninintra-companyfloat,whichisfrequentlyashighasfivedaysevenforwire

transfers.

D.Thebenefitsthataccruefromtheestablishmentofaformalinformationsystem,whichserves

asthefoundationforcentrallymanagingtransactionexposureandtheinvestmentofexcess

funds.

E.Alloftheabove

23.WithaCENTRALIZEDCASHDEPOSITORY

A.thereislesschanceforanMNC*sfundstobedenominatedinthewrongcurrency.

B.thecentralcashmanagerhasaglobalviewoftheMNC'soverallcashposition.

C.thereislesschanceofmislocatedfunds.

D.Alloftheabove

24.WithaCENTRALIZEDCASHDEPOSITORY

A.aMNCcanfacilitatefundmobilization.

B.system-wideexcesscashareinvestedatthemostadvantageousrates.

C.system-widecashshortagesareborrowedatthemostadvantageousrates.

D.alloftheabove

25.NotallcountriesallowMNCsthefreedomtonetpayments,

A.bylimitingnetting,moreneedlessforeignexchangetransactionsflowthroughthelocalbanking

system.

B.MNCscanavoidtheserestrictionsbyusingaCentralizedCashDepository.

C.MNCscanavoidtheserestrictionsbyusingwiretransfers.

D.bothbandc

26.Withregardtocashmanagementsystemsinpractice,studiessuggestthatthebenefitsofa

multilateralnettingsysteminclude

A.thedecreaseintheexpenseassociatedwithfundstransfer,whichinsomecasescanbeover

$1,000foralargeinternationaltransferofforeignexchange.

B.thesavingsinadministrativetime.

C.thereductioninintracompanyfloat,whichisfrequentlyashighasfivedays,evenforwire

transfers.

D.alloftheabove

27.Severalinternationalbanksoffermultilateralnettingsoftwarepackages.Thesepackages

A.calculatethenetcurrencypositionsofeachaffiliate.

B.canintegratethenettingfunctionwithforeignexchangeexposuremanagement.

C.onlyworkontheMacplatform.

D.bothaandb

28.MNCscanreducetheirexchangerateexpense

A.byusingbilateralnetting.

B.byusingacentralizedcashmanagementsystem.

C.byusingmultilateralnetting.

D.alloftheabove

29.Whichofthefollowingstatementsaboutmultilateralnettingsystemarecorrect?

(i)-Eachaffiliatenetsallitsinteraffiliatereceiptsagainstallitsdisbursements

(ii)-Eachaffiliatetransfersorreceivesabalance,dependingonwhetheritisanetpayeror

receiver

(iii)-Thenetfundstobereceivedbytheaffiliateswillequalthenetdisbursementstobemadeby

theaffiliates

(iv)-Onlytwoforeignexchangetransactionsarenecessarysincetheaffiliates*netreceiptswill

alwaysbeequaltozero

(v)-Onlytwoforeignexchangetransactionsarenecessarysincetheaffiliates'netdisbursements

willalwaysbeequaltozero

A.(i)and(ii)

B.(i),(ii),and(iii)

C.(i),(ii),(iii),and(iv)

D.(i),(ii),(iii),and(v)

30.Assumingthattheinteraffiliatecashflowsareuncorrelatedwithoneanother,calculatethe

standarddeviationoftheportfolioofcashheldbythecentralizeddepositoryforthefollowing

affiliatemembers:

ExpectedStandard

AffiliateTransactionsDexiation

U.S.$100,000$40.000

Canada$150,000$60,000

Mexico$175,000$30,000

Chile$200,000$70,000

A.$34,960.33

B.$139,841.33

C.$104,880.88

D.Noneoftheabove

31.Assumingthattheinteraffiliatecashflowsareuncorrelatedwithoneanother,calculatethe

minimumcashbalancetohaveifthefirmfollowsaconservativepolicyofhavingthreestandard

deviationsofcashforprecautionarypurposes

ExpectedStandard

.AffiliateTransactionsI)e\iation

U.S.$109,000$40.00C

Canada$153,000S60.00C

Mexico$175,000$30.00C

Chile$209,000$70.00C

A.$34,960.33

B.$314,642.65

C.$104,880.88

D.Noneoftheabove

32.IfFrench-basedAffiliateAowesU.S.-basedaffiliateB$1,000andAffiliateBowesAffiliateA

€2,000whentheexchangerateis$1.10=€1.00.ThenetpaymentbetweenAandBshouldbe

A.€1,091fromBtoA.

B.€1,091fromAtoB.

C.$1,200fromBtoA.

D.Noneoftheabove

33.Forarecentmonth,thefollowingpaymentsmatrixofinteraffiliatecashflowswasforecasted:

DisbursementFrom:

Receiptsby:FranceBritaiiU.S.

France€500€800

Britain£300—£400

U.S.$1,000$500

UsemultilateralnettingtofindthenetpaymentfromtheBritishaffiliatetotheU.S.affiliate.

Thespotexchangeratesare$1.20=€1.00and$1.80=£1.00;affiliatesgetpaidinhome

currency.

A.$60

B.$20

C.$0

D.Noneoftheabove

34.TheU.S.IRSallowstransferpricestobesetusingComparableuncontrolledpricemethod.This

methodrequires

A.findingthepricethatanunrelatedwillingsellerwouldacceptfromanunrelatedwillingbuyer.

B.thepriceatwhichthegoodisresoldbythedistributionaffiliateisreducedbyanamount

sufficienttocoveroverheadcostsandareasonableprofit.

C.anappropriateprofitisaddedtothecostofthemanufacturingaffiliate.

D.financialmodelsandeconometrictechniques.

35.TheU.S.IRSallowstransferpricestobesetusingtheresalepricemethod

A.findingthepricethatanunrelatedwillingsellerwouldacceptfromanunrelatedwillingbuyer.

B.thepriceatwhichthegoodisresoldbythedistributionaffiliateisreducedbyanamount

sufficienttocoveroverheadcostsandareasonableprofit.

C.anappropriateprofitisaddedtothecostofthemanufacturingaffiliate.

D.financialmodelsandeconometrictechniques.

36.TheU.S.IRSallowstransferpricestobesetusingthecostplusapproach

A.findingthepricethatanunrelatedwillingsellerwouldacceptfromanunrelatedwillingbuyer.

B.thepriceatwhichthegoodisresoldbythedistributionaffiliateisreducedbyanamount

sufficienttocoveroverheadcostsandareasonableprofit.

C.anappropriateprofitisaddedtothecostofthemanufacturingaffiliate.

D.financialmodelsandeconometrictechniques.

37.Forarecentmonth,thefollowingpaymentsmatrixofinteraffiliatecashflowswasforecasted:

DisbursementFrom:

Receiptsby:FranceBritainU.S.

France—€500€800

Britain£300—£400

U.S.$1.000$500—

Thespotexchangeratesare$1.20=€1.00and$1.80=£1.00;affiliatesgetpaidinhome

currency.Usemultilateralnettingtofindthenetpaymentstoandfromallparties.

Whichofthefollowingisanaccuratechartoftheircurrentsituation?

A.

B.

D.Noneoftheothers.

38.Forarecentmonth,thefollowingpaymentsmatrixofinteraffiliatecashflowswasforecasted:

DisbursementFrom:

Receiptsby:FranceBritanU.S.

France——€500F800

Britain£480—£300

U.S.$600$960—

Thespotexchangeratesare$1.20=€1.00and$2.00=£1.00;affiliatesgetpaidinhome

currency.Usemultilateralnettingtofindthenetpaymentstoandfromallparties.

Whichofthefollowingisanaccuratechartoftheircurrentsituation?

U.S.

D.Noneoftheothers.

39.SimplifythefollowingsetofintracompanycashflowsforthisU.S.Firm.

Usethefollowingexchangerates.

£1.00=$2.00

€1.00=$1.50

SFr1.00=$0.80

Thefewestnumberofintra-affiliatecashflowsis

A.Zero.

B.One.

C.Two.

D.Three.

E.Four.

40.SimplifythefollowingsetofintracompanycashflowsforthisSwissFirm.

Usethefollowingexchangerates.

£1.00=$2.00

fl.00=$1,50

SFr1.00=$0.80

Thefewestnumberofintra-affiliatecashflowsis

A.Zero.

B.One.

C.Two.

D.Three.

E.Four.

41.Whichw川reducethenumberofforeignexchangetransactionthemostforaMNC?

A.Multilateralnetting

B.Bilateralnetting

C.Fishnetting

D.Noneoftheabove

42.Undermultilateralnetting

A.eachaffiliatenetsallitsinter-affiliatereceiptsagainstallitsdisbursements.Itthentransfersor

receivesthebalance,respectively,ifitisthenetpayerorreceiver.

B.eachpairofaffiliatesdeterminesthenetamountduebetweenthem,andonlythenetamount

istransferred.

C.nointer-affiliatepaymentsaremadeorevencomputed,sincenorealcashflowsareinvolved.

D.alloftheabove

43.Onebenefitofacentralizedcashdepositoryis

A.theMNC*sinvestmentinprecautionarycashbalancescanbesubstantiallyreducedwithouta

reductioninitsabilitytocoverunforeseenexpenses.

B.eachaffiliatewillhavegreaterautonomyinmanagingitsowncashbalances.

C.exchangeraterestrictionscanbeeasilycircumvented.

D.noneoftheabove

44.IfFrench-basedAffiliateAowesU.S.-basedaffiliateB$1,000andAffiliateBowesAffiliateA

€2,000whentheexchangerateis$1.50=€1.00.ThenetpaymentbetweenAandBshouldbe

closestto

A.$2,000fromBtoA.

B.€2,000fromAtoB.

C.$1,000fromBtoA.

D.noneoftheabove

45.FortheU.S.affiliateshownbelow,netallitsinter-affiliatereceiptsagainstallitsdisbursements.

Usethefollowingexchangerates.

£1.00=$2.00

ei.oo=$1.50

SFr1.00=$0.80

Thenetinter-affiliatecashflowfortheU.S.affiliateis

1135

A.$0.

B.-$135

C.$135.

D.$405.

E.$90.

46.TheU.S.IRSallowstransferpricestobesetusingcomparableuncontrolledpricemethod.This

methodisdifficulttoapplyinpracticebecausemanyfactorsenterintothepricingofgoodsand

services.Examplesinclude

A.differencesinthetermsofsale.

B.differencesinquantityandorqualitysold.

C.differencesinlocationordateofsale.

D.alloftheabove

47.Advaloremarebestdescribedas

A.anadvaloremdutyisapercentagetaxleviedatcustomsontheassessedvalueofthe

importedgood.

B.avalue-addedtaxondomesticproduction.

C.apercentagetaxleviedatcustomsonthevalueaddedbyshippingthegood.

D.noneoftheabove

48.AccordingtoarecentsurveybyErnstandYoung,themostimportanttaxissuethatmultinational

enterprisesnowfaceis

A.transferpricing.

B.choiceofaccountingmethodtouseinpreparingconsolidatedincomestatementswhenfirms

havesubsidiariesincountrieswithdifferenttaxtreatmentsofexpenseitems.

C.choiceofaccountingmethodtouseinpreparingconsolidatedincomestatementswhenfirms

havesubsidiariesincountrieswithdifferenttaxtreatmentsofincomerecognition.

D.noneoftheabove

49.Whichofthefollowingstatementsabouttransferpricingistrue?

A.Thehigherthetransferprice,thelargerthegrossprofitsofthetransferringdivisionrelativeto

thereceivingdivision.

B.Veryhighmarkuppolicyusedinthetransferpricingtoasubsidiarymakestheadjusted

presentvalue(APV)ofthatsubsidiary'scapitalexpenditureappearlessattractive.

C.Verylowmarkuppolicyusedinthetransferpricingtoasubsidiarymakestheadjustedpresent

value(APV)ofthatsubsidiary'scapitalexpenditureappearlessattractive.

D.Bothaandb

50.Thelowerthetransferprice

A.thehigherthenetprofitreportedbytheMNC.

B.thelowerthegrossprofitofthetransferringdivisionrelativetothereceivingdivision.

C.thehigherthegrossprofitofthereceivingdivisionrelativetothetransferringdivision.

D.noneoftheabove

51.Multinationalcashmanagement

A.isreallynodifferentforaMNCthanforapurelydomesticfirminaclosedeconomy.

B.concernsitselfwiththesizeofcashbalances,theircurrencydenominations,andwherethese

cashbalancesarelocatedamongtheMNC'saffiliates.

C.concernsitselfwiththesizeofcashbalancesandtheircurrencydenominations,butnotwhere

thesecashbalancesarelocatedamongtheMNC'saffiliates,sinceintra-affiliatedefaultriskis

notanissue.

D.noneoftheabove

52.Inreferencetoestablishing"transferprices"betweentheaffiliatesofanMNC,whichofthe

followingrelatestothe"resale"priceapproach?

A.Comparableuncontrolledpricebetweenunrelatedfirms.

B.Thepriceatwhichthegoodisresoldbythedistributionaffiliateisreducedbyanamountto

coveroverheadcostsandareasonableprofit.

C.Assumesthatthemanufacturingcostisreadilyavailable.

D.Isbasedonfinancialandeconomicmodelsandeconometrictechniques.

53."Unbundlingfundtransfers"fromanMNCandtoitsaffiliatesreferstothefollowingactivity:

A.insteadoflumpingallcostsintoasingletransferprice,fortheMNC(parentfirm)torecognize

thecostofthephysicalgoodandeachserviceseparatelythatitprovidestoitsaffiliates.

B.inadditiontochargingforthecostofthephysicalgood,fortheparentfirmtochargefor

technicaltrainingoftheaffiliates'staff,costofworldwideadvertising,royalty,licensingfee,and

technology,wheneverapplicable,tofacilitatefortheMNCtopresentandsupporttothetaxing

authorityofahostcountrythateachchargeislegitimateandcanbewellsubstantiated.

C.usedforremovingblockedfundsfromahostcountrythatisenforcingforeignexchange

restrictions.

D.alloftheabove

AffiliateXsells10,000unitstoAffiliateYperyear.ThemarginaltaxratesforXandY,

respectively,are20percentand30percent.Thetransferpriceperunitiscurrentlysetat$1,000,

butitcangoashighas$1,250.

54.Calculatetheincreaseinannualafter-taxprofitsifthehighertransferpriceof$1,250perunitis

used.

A.$250,000

B.$500,000

C.$1,000,000

D.$1,250,000

55.AssumethatYpaysataxdeductibletariffof7percentonimportedmerchandise.Calculatethe

increaseinannualafter-taxprofitsifthehighertransferpriceof$1,250perunitisused.

A.$50,000

B.$100,000

C.$125,000

D.$250,000

56.Whichtermcorrectlydescribesthefollowingsituation?Whenacountryimposesexchange

restrictionsonitsowncurrency,limitingconversiontoothercurrencies,aMNC*sfrustrated

remittanceofprofitsfromasubsidiarywouldbe

A.blockedfunds.

B.stoppedfunds.

C.constipatedfunds.

D.moneydownthetoilet.

57.Onblockedfundsstrategyis

A.transferringpersonnelfromcorporateheadquarterstothesubsidiaryoffices.

B.usingthenationalairlinesofthehostcountrywhenpossiblefortheinternationaltravelofall

MNCexecutives.

C.holdingbusinessconferencesoftheMNCinthehostcountry,whereallexpensesarepaidby

thelocalsubsidiary.

D.alloftheabove

58.Reasonsforacountrytoimposeexchangerestrictionsonitsowncurrency,limitingconversionto

othercurrenciesinclude

A.enticingmoreforeigninvestmentfromMNCs.

B.foravarietyofreasons,thecountrymayfinditselfshortofforeigncurrencyreserves.

C.creatingahome-grownbusinessclimate.

D.alloftheabove

59.Whycanblockedfundscanbedetrimentaltoallconcerned?

A.Hostcountrieswanttoattractforeignindustriesthatbenefittheireconomicdevelopment;

blockedfundsmakeMNCslesswillingtoinvest.

B.MNCsshouldnotbeexpectedtomakebeneficialinvestmentwheretheymaynotbeableto

receiveanappropriatereturn.

C.Localcompetitorsmaybeabletoreapmonopolyprofits.

D.Bothaandb

60.Whenengagedinbilateralnetting

A.totalinteraffiliatereceiptswillalwaysequaltotalinteraffiliatedisbursements.

B.wecanreducethenumberofforeignexchangetransactionsamongaMNCwithA/affiliatesto

Rx(N-l)

2orless.

C.eachaffiliatenetsallitsinteraffiliatereceiptsagainstallitsdisbursements.Itthentransfersor

receivesthebalance,respectively,ifitisanetpayerorreceiver.

D.alloftheabove

61.Whichoneofthefollowingisafalsestatementwhenengagedinbilateralnetting?

A.Totalinteraffiliatereceiptswillalwaysequaltotalinteraffiliatedisbursements.

B.WecanreducethenumberofforeignexchangetransactionsamongaMNCwithA/affiliatesto

(N-1)

2orless.

C.Eachaffiliatenetsallitsinteraffiliatereceiptsagainstallitsdisbursements.Itthentransfersor

receivesthebalance,respectively,ifitisanetpayerorreceiver.

D.Alloftheabove

62.Whichoneofthefollowingisafalsestatementwhenengagedinbilateralnetting?

A.Totalinteraffiliatereceiptswillalwaysequaltotalinteraffiliatedisbursements.

B.WecanreducethenumberofforeignexchangetransactionsamongaMNCwith/Vaffiliatesto

Rx(N-l)

2orless.

C.Eachaffiliatenetsallitsinteraffiliatereceiptsagainstallitsdisbursements.Itthentransfersor

receivesthebalance,respectively,ifitisanetreceiverorpayerrespectively.

D.Alloftheabove

63.Whichoneofthefollowingisafalsestatementwhenengagedinbilateralnetting?

A.Totalinteraffiliatereceiptsneednotalwaysequaltotalinteraffiliatedisbursements.

B.WecanreducethenumberofforeignexchangetransactionsamongaMNCwithA/affiliatesto

Nx(N-l)

2orless.

C.Eachaffiliatenetsallitsinteraffiliatereceiptsagainstallitsdisbursements.Itthentransfersor

receivesthebalance,respectively,ifitisanetpayerorreceiver.

D.Alloftheabove

64.BilateralnettingcanreducethenumberofforeignexchangetransactionsamongaMNCwithN

affiliatesto

A.A!(A-1)!

orlfess

2

B.orless

(N-l)!

c

7

D.Noneoftheabove.

65.Mislocatedfundsaredefinedas:

A.Fundsbeingfoundinthewrongaccount.

B.Fundsbeingdenominatedinthewrongcurrency.

C.Fundsbeinginvestedwiththewrongmaturity.

D.Noneoftheabove

66.Afirmkeepsaprecautionarycashbalancetocoverunexpectedtransactionsduringthebudget

period.Thesizeofthisbalancedependsonhowsafethefirmdesirestobeinitsabilitytomeet

unexpectedtransactions.

A.Thelargertheprecautionarycashbalance,thegreateristhefirm'sabilitytomeetunexpected

expenses.

B.Thelargertheprecautionarycashbalance,thelessistheriskoffinancialembarrassmentand

lossofcreditstanding.

C.Thelargertheprecautionarycashbalance,thegreaterthepotentialopportunitycost.

D.Alloftheabove

67.TheformulaforthestandarddeviationofcashheldbythecentralizeddepositoryforA/affiliatesis

J(Std.De\.Affiliate1)+(Std.Dev.Affiliate2)：+…+(Std.Dev.AffiliateN)?

A.Theformulaassumesthatinteraffiliatecas