1、单选题：
Recently, financial markets have become highly integrated. This development
选项：
A:allows investors to diversify their portfolios internationally.
B:has increased the cost of capital for firms.
C:allows minority investors to buy and sell stocks.
D:answers a and c are both correct.
答案: 【allows investors to diversify their portfolios internationally.】

2、单选题：
Although the world economy is much more integrated today than was the case 10 or 20 years ago, a variety of barriers still hamper free movements of people, goods, services, and capital across national boundaries. These barriers include
选项：
A:excessive transportation costs.
B:information asymmetry.
C:all of the above
D:legal restrictions.
答案: 【all of the above】

3、单选题：
A purely domestic firm sources its products, sells its products, and raises its funds domestically
选项：
A:can be more competitive than a MNC on its home turf due to superior knowledge of the local market.
B:can still face exchange rate risk, just like a MNC.
C:all of the above are true
D:can face stiff competition from a multinational corporation that can source its products in one country, sell them in several countries, and raise its funds in a third country.
答案: 【all of the above are true】

4、单选题：
Suppose your firm invests $100,000 in a project in Italy. At the time the exchange rate is $1.25 = €1.00. One year later the exchange rate is the same, but the Italian government has expropriated your firm's assets paying only €80,000 in compensation. This is an example of
选项：
A:political risk.
B:exchange rate risk.
C:market imperfections.
D:none of the above, since $100,000 = €80,000 × $1.25/€1.002
答案: 【political risk.】

5、单选题：
The ultimate guardians of shareholder interest in a corporation, are the
选项：
A:senior management.
B:all of the above.
C:rank and file workers.
D:boards of directors.
答案: 【boards of directors.】