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What is the concept that is concerned with the long-run effect of changes in exchange
rates on future prices, sales, and costs?
A. Translation exposure
B. Economic exposure
C. Transaction exposure
D. Risk exposure
When an investor purchases a corporate bond, he purchases the right to receive a:
A. share of the overall revenues that the company generates.
B. part of the title for the assets that the corporate holds.
C. specified fixed stream of income from the corporation.
D. share of the profits that the company generates through operations.
When an investor purchases a corporate bond, he purchases the right to receive a
specified fixed stream of income from the corporation for a specified number of years
(i.e., until the bond maturity date).
In order to be classified as an MNE, a company must have productive activities in at
least _____ countries.
A. two
B. three
C. four
D. twenty
If a _____ change in a price produces a _____ change in demand, then demand is said
to be elastic.
A. small; large
B. small; small
C. large; small
D. large; large
_____ refers to a state where political power is monopolized by a party, group, or
individual that governs according to religious principles.
A. Representative democracy
B. Theocratic totalitarianism
C. Tribal anarchism
D. Monotheistic communism
The _____ is a global network of banks, brokers, and foreign exchange dealers
connected by electronic communications systems.
A. foreign exchange market
B. united global database
C. global marketplace
D. foreign market database
In the international business setting, one of the most common ethical issues involves
_____.
A. hiring practices
B. government deregulation
C. the moral obligation of multinational corporations
D. facilitating payments
The main attraction of _____ is that it can give a firm a way to finance an export deal
when other means are not available.
A. switch trading
B. counterpurchase
C. offsets
D. countertrade
Which of the following changes were made to the International Monetary Fund's
Articles of Agreement in the Jamaica agreement?
A. IMF members were permitted to use the U.S. dollar as the convertible currency.
B. Gold was declared as a formal reserve asset for IMF members.
C. IMF members were permitted to sell their gold reserves at the market price.
D. IMF members were restricted from entering the foreign exchange market.
Early entrants to a market that are able to create switching costs that tie the customer to
the product are capitalizing on:
A. first-mover advantages.
B. pioneering costs.
C. economies of scale.
D. late-mover advantages.
Which of the following observations pertaining to the EU's Court of Justice is correct?
A. It is comprised of two judges from each country.
B. It is the supreme appeals court for EU law.
C. Its judges are required to act as representatives of national interests.
D. A member country can bring other members to the court for failing to meet EU treaty
obligations only with the support of two other uninvolved EU countries.
Identify the true statement about trade barriers.
A. They lower the costs of exporting products to a country.
B. They may put a firm at a competitive advantage to indigenous competitors.
C. They may help a firm to serve a country from locations outside of that country.
D. To conform to local content regulations, a firm may have to locate more production
activities in a given market than it would otherwise.
Religion may be defined as:
A. routine conventions of everyday life.
B. social rules that govern people's actions toward each other.
C. shared beliefs and rituals that are concerned with the realm of the sacred.
D. a set of moral principles, or values, that are used to guide and shape behavior.
A deferral principle specifies that parent companies are not taxed on foreign source
income until:
A. the subsidiary providing income makes some profit.
B. they actually receive a dividend.
C. they acquire majority stake in the subsidiary.
D. the subsidiary providing income is listed in the United States.
Sony was a pioneer in the portable music market segment. Sony's Walkman was an
innovative product which created a new category altogether and made Sony a
technological leader. This gave the company an edge over other consumer electronics
brands that introduced portable music players for a very long time. In this example,
Sony had the:
A. vertical integration advantage.
B. purchasing power parity advantage.
C. free-rider advantage.
D. first-mover advantage.
On average, studies indicate that NAFTA's overall impact has been:
A. large but negative.
B. large and positive.
C. small and negative.
D. small but positive.
Most of the loans issued by the IMF:
A. are conditional loans.
B. are unconditional loans.
C. include a macroeconomic policy that calls for lower interest rates.
D. include a macroeconomic policy that calls for increases in public spending to
improve infrastructure in a country.
_____ include the design, creation, and delivery of a product.
A. Primary activities
B. Core competencies
C. Support activities
D. Universal needs
Which of the following is more difficult for a leader?
A. To change an established organizational culture
B. To import an organizational culture
C. To create an organizational culture from scratch in a new venture
D. To export an organizational culture
In a(n) _____ economy the government plans the goods and services that a country
produces, the quantity in which they are produced, and the prices at which they are
sold.
A. market
B. command
C. open economy
D. laissez-faire
There is low interdependence, performance ambiguity, and costs of control in firms
pursuing a(n) _____.
A. localization strategy
B. international strategy
C. transnational strategy
D. global strategy
The WTO's GATS has taken the lead to:
A. provide enhanced protection for intellectual property.
B. extend free trade agreements to services.
C. reduce agricultural subsidies.
D. enforce GATT rules.
Under the mudarabah banking system, when an Islamic bank lends money to a
business:
A. it charges that business interest on the loan.
B. the business needs to pay back the loan with an additional markup.
C. it has to donate the interest received on the loan to a charitable trust.
D. it takes a share in the profits that are derived from the investment.
The International Monetary Fund has been criticized for exacerbating moral hazard:
A. with its rescue programs.
B. by increasing the probability of debt default.
C. making loans to countries that are trying to reduce national debt by "playing the
market."
D. by refusing to bail out banks that made loans to overleveraged Asian companies
during the 1990s.
David Ricardo's theory of comparative advantage explains:
A. domestic trade in terms of international differences in political environments.
B. international trade in terms of international differences in political environments.
C. domestic trade in terms of international differences in labor productivity.
D. international trade in terms of international differences in labor productivity.
Which of the following would be a typical responsibility of a product division in a
worldwide product divisional structure?
A. Operating decisions
B. Overall strategic development of the firm
C. Financial control of the various divisions
D. Decisions regarding legal issues
Which of the following statements is true of foreign bonds?
A. Such bonds must be underwritten by an international syndicate of banks.
B. Foreign bonds are placed only in the originating country.
C. Foreign bonds are issued by governments rather than corporations.
D. Such bonds are denominated in the issuing country's currency.
Which of the following countries has a concentrated retail system?
A. China
B. United States
C. Japan
D. India
In which of the following organizational structures are the domestic operations and
foreign operations isolated from each other leading to coordination problems?
A. Global matrix structure
B. International division structure
C. Worldwide product division structure
D. Worldwide area structure
_____ is the technique financial managers use to try to quantify the benefits, costs, and
risks of an investment.
A. Capital budgeting
B. External audit
C. Transfer pricing
D. Control system analysis
