1- An MNC has an incentive to invest short-term funds in a foreign currency if investments denominated in the foreign currency have a ___(higher OR lower) interest rate than investments denominated in the home currency of the MNC.

True or False: If a currencys LIBOR rate rises, the money market interest rates denominated in that currency also rise.

• True
• False

2- True or False: Short-term loans of six months or less, extended by banks to MNCs in Europe, are called eurocredit loans.

• True
• False

3- The United States Congress passed the Sarbanes-Oxley (SOX) Act in 2002. This act required all firms, including foreign firms, to provide more comprehensive financial information in order to list their stock on US stock exchanges.

True or False: The high cost of SOX compliance leads some non-US firms to withdraw from US exchanges.

True

False