_____ have/has the most to gain from reductions in agricultural tariffs and subsidies
that are a part of the Doha agenda.
A. The world’s developed nations
B. The world’s poorer nations
C. European nations
D. The United States
Which of the following primarily explains why developing nations are characterized by
lower percentage of cross-border mergers and acquisitions compared to developed
nations?
A. Fewer target firms to acquire in developing nations
B. Fierce opposition to mergers and acquisitions in developed nations
C. Unwillingness of foreign companies to invest in developing nations
D. Presence of import quotas in developing nations In the case of developing nations,
only about one-third of FDI is in the form of cross-border mergers and acquisitions. The
lower percentage of mergers and acquisitions may simply reflect the fact that there are
fewer target firms to acquire in developing nations.
In the face of unpredictable movements in exchange rates, businesses should:
A. pursue strategies that will reduce their economic exposure.
B. pursue strategies that will reduce the company’s strategic exposure.
C. pursue strategies that will reduce their foreign market exposure.
D. sell off investments in foreign subsidiaries and consolidate domestic facilities.
A _____ retail system is one in which there are many retailers, no one of which has a
major share of the market.
A. concentrated
B. consolidated
C. focused
D. fragmented
Assume that the yen/dollar exchange rate quoted in Tokyo at 3:00 p.m. is ×120 = $1,
and the yen/dollar exchange rate quoted in New York at the same time is ×123 = $1. A
dealer in New York uses dollars to purchase yen and then immediately sells the yen to
buy dollars in Tokyo, thereby making a profit. The dealer has engaged in a(n) _____.
A. currency swap
B. arbitrage
C. carry trade
D. straddle
Which of the following is an advantage that banks have when they deal with foreign
currencies?
A. Interest payments to customers are low when dealing with foreign currencies.
B. Accounts need not be maintained when dealing with foreign currencies.
C. Risks that investors face are low when dealing with foreign currencies.
D. Governments give banks more freedom when dealing with foreign currencies.
Research has long maintained that a major factor of success for new products is the
closeness of the relationship between:
A. finance and marketing.
B. marketing and R&D.
C. finance and materials management.
D. finance and R&D.
Which dimension of Mendenhall and Oddou’s study suggests that an expatriate with
high self-esteem, self-confidence, and mental well-being is likely to succeed in a
foreign job posing?
A. Self-orientation
B. Others-orientation
C. Cultural toughness
D. Perceptual ability
Which of the following statements is true of strategic alliances?
A. The fixed costs and associated risks of developing new products or processes are
borne by the alliance partner.
B. They are a way to bring together complementary skills and assets that both
companies develop.
C. They limit the entry of firms into foreign markets.
D. Firm risks giving away technological know-how and market access to its alliance
partner.
The risk associated with a portfolio:
A. declines exponentially as the number of stocks purchased increases and continues to
decline until a point of zero risk is reached.
B. decreases as the investor increases the number of stocks in her portfolio.
C. grows exponentially with the number of stocks purchased.
D. increases as the investor increases the number of stocks in her portfolio.
Which of the following is a nationwide group of international trade attorneys who
provide free initial consultations to miniature businesses on export-related matters?
A. ELAN
B. EMC
C. MITI
D. SCORE
Why doesn’t Great Britain use the euro as its national currency?
A. Would have to convert its economic structure to the euro
B. Would have to relinquish control of its monetary policy to the EU
C. Would have to change its financial markets operations
D. Would have to obtain approval from the U.S. Federal Reserve
A _____ is compensation for professional services or expertise supplied to a foreign
subsidiary by the parent company or another subsidiary.
A. fronting loan
B. fee
C. royalty
D. transfer price
A factor that makes the Eurocurrency market attractive to both depositors and
borrowers is:
A. it allows fair trade within the European Union.
B. its strong government regulations and safeguards.
C. its commitment to economic growth in underdeveloped nations.
D. its lack of government regulation.
Flexible manufacturing technology is also known as _____.
A. Six Sigma production
B. line production
C. standardization
D. lean production
The emerging role of the _____ in competition policy suggests the EU is increasingly
willing and able to intervene and impose conditions on companies proposing mergers
and acquisitions.
A. European Commission
B. Court of Justice
C. European Council
D. European Parliament
Which strategy focuses on increasing profitability by customizing the firm’s goods or
services so they provide a good match to tastes and preferences in different national
markets?
A. Global standardization strategy
B. Transnational strategy
C. Localization strategy
D. International strategy
The international monetary system refers to the institutional arrangements that govern
_____.
A. microeconomic parameters
B. exchange rates
C. gross domestic produce
D. foreign direct investment
As a receipt, the bill of lading indicates that the carrier:
A. provides a written promise of payment before releasing the merchandise.
B. has obtained the merchandise described on the face of the document.
C. receives payment from a third-party such as a bank or trading house.
D. is obligated to provide a transportation service in return for a certain charge.
When using the Euromarkets, companies:
A. have funds that lack liquidity.
B. pay less for the loans.
C. attract low interest rates.
D. are secured from foreign exchange risks.
Managing an international business is different from managing a purely domestic
business for which of the following reasons?
A. Countries prefer to keep business transactions between domestic partners.
B. The range of problems confronted are wider and more complex.
C. International businesses have an added layer of U.N. regulations.
D. International transactions involve exchanging currencies through each countries’
treasury.
The _____ school of thought argues that forward exchange rates do the best possible
job of forecasting future spot rates and therefore investing in forecasting services would
be a waste of money.
A. inefficient market
B. efficient market
C. random walk
D. speculative
Which of the following is true of wholly owned subsidiaries?
A. It is the least expensive method of serving a foreign market from a capital
investment standpoint.
B. It the most feasible entry mode due to the political considerations.
C. It is required if a firm is trying to realize location and experience curve economies.
D. It is particularly useful where FDI is limited by host-government regulations.
Learning effects tend to be:
A. the same regardless of whether a task is simple or complex.
B. more significant when a technologically simple task is repeated.
C. less significant when a technologically complex task is repeated.
D. more significant when a technologically complex task is repeated.
The overall attractiveness of a country as a potential market or investment site for an
international business depends on:
A. if the country has a high gross national income.
B. balancing the benefits, costs, and risks associated with doing business in that
country.
C. whether the company can be the first mover in the market.
D. whether the government can be greased.
The premature return of an expatriate manager to his or her home country is known as
_____.
A. repatriation
B. inpatriation
C. expatriate failure
D. outpatriation
Every time a firm changes cash from one currency into another currency it must bear
a(n) _____.
A. transaction cost
B. tax
C. transfer fee
D. audit
Cultural relativism suggests that:
A. a firm should adopt the ethics of the culture in which it is operating.
B. the only social responsibility of a firm is to increase profits.
C. a firm’s ethical policies should remain the same in all cultures.
D. a multinational should follow its home-country cultural practices in all the
host-countries where it has operations.
Which of the following statements is true of countertrade?
A. Countertrade reduces the profitability of competing firms and is considered an
unethical practice.
B. Countertrade is a conventional means to pay exporters.
C. Smaller organizations commonly use countertrade in international transactions.
D. Countertrade occurs when goods and services are traded for other goods and
services.
International Monetary Fund members were _____ in the Jamaica agreement.
A. not permitted to sell their own gold reserves
B. permitted to sell their own gold reserves, but only at the price set by IMF
C. required to hold their gold reserves in escrow
D. permitted to sell their own gold reserves at the market price