Archives: Quiz

Countertrade is most attractive to: A.small exporters. B.large multinational enterprises. C.only U.S. firms. D.any firm in democratic nations. E.new companies. Answer: Which of the following is true of a banking crisis? A.It leads to individuals and companies withdrawing their deposits […]

Which of the following observations about the International Development Association (IDA) scheme of the World Bank is true? A.Money is raised through bond sales in the international capital market. B.Borrowers have up to 50 years to repay at an interest […]

When serving as collateral, the bill of lading: A.can be used to advance funds to the exporter by its local bank before or during shipment. B.specifies that the carrier is obligated to provide a transportation service in return for a […]

A firm that adopts a polycentric staffing policy is less likely to: A.isolate foreign subsidiaries from corporate headquarters. B.implement an expensive staffing policy. C.be controlled by corporate headquarters. D.suffer from cultural myopia. E.provide growth opportunities. Answer: Economic advances in many […]

A global car manufacturer wants to start production in China. While catering to local responsiveness, what can the firm do to get scale economies? A.Increase costs whenever possible. B.Use common vehicle platforms and components across many different models. C.Shorten the […]

Firms vary their marketing mix from country to country depending on differences in national culture. Answer: Plato did not equate collectivism with equality. Answer: TRUE Plato did not equate collectivism with equality; he believed that society should be stratified into […]

Expatriate managers who lack others-orientation tend to treat foreign nationals as if they were home-country nationals. Answer: The Nobel Prize-winning economist Paul Samuelson argued that contrary to the standard interpretation, in certain circumstances the theory of comparative advantage predicts that […]

The move toward a global economy has strengthened the adoption of conservative economic policies by developing nations. Answer: Since its establishment in January 1, 1999, the euro has steadily appreciated against the U.S. dollar, reaffirming the ability of the European […]

For international firms, an ethnocentric staffing approach is compatible with a localization strategy. Answer: When the Bretton Woods participants established the World Bank, the need to lend money to third-world nations was foremost in their minds. Answer: FALSE When the […]

Ricardo’s theory of comparative advantage is a major intellectual weapon for advocates of free trade because it provides a strong rationale for encouraging free trade. Answer: Consumer surplus captures some of the value of a product thereby reducing the price […]

Strategies that increase profitability can also expand a firm’s business and thus enable it to attain a higher rate of profit growth. Answer: Limits on imports are often in the interests of domestic consumers, but not domestic producers. Answer: FALSE […]

There is generally a critical link among channel length, the final selling price, and the firm’s profit margin because each intermediary in a channel adds its own markup to the products. Answer: Many totalitarian regimes failed to deliver economic progress […]

Viewed from an Asian or European perspective, Vernon’s argument that most new products are developed and introduced in the United States seems ethnocentric and increasingly dated. Answer: As a result of international trade, the economies of the world’s nation-states are […]

The architects of the Bretton Woods agreement wanted to avoid high unemployment, so they built the fixed exchange rate system to be highly inflexible. Answer: According to the free market view, countries should specialize in the production of those goods […]

Although most international trade and investment are still conducted by large firms, many medium-size and small businesses are becoming increasingly involved in international trade and investment. Answer: Firms that actively export often lose out on significant opportunities for growth and […]

Most economists prefer Ricardo’s theory to the Heckscher-Ohlin theory because it makes fewer simplifying assumptions. Answer: According to Michael Porter, all positions on the efficiency frontier are viable. Answer: FALSE Porter emphasizes that it is very important for management to […]

The purchasing power parity for different countries is adjusted (up or down) depending upon whether a country’s cost of living is lower or higher than the cost of living in the United States. Answer: The growing income inequality is a […]

The strategic trade policy arguments of the new trade theorists suggest an economic justification for government intervention in international trade and this justification challenges the rationale for unrestricted free trade. Answer: The foreign exchange market offers complete insurance against foreign […]

Trade barriers encourage firms to disperse their productive activitiesdesign, production, and assemblyto foreign nations. Answer: Although mercantilism is an old and largely discredited doctrine, its echoes remain in modern political debate and in the trade policies of many countries. Answer: […]

“Facilitating payments” are payments to secure contracts that would not otherwise be secured. Answer: The Andean Pact was largely based on the European Union model and was highly successful at achieving its stated goals. Answer: FALSE Bolivia, Chile, Ecuador, Colombia, […]

In _____ type cases, the focus is on the discriminatory consequences rather than the intent to discriminate? A.disparate treatment B.access discrimination C.disparate impact D.valuation discrimination Answer: Which of the following is not classified as exempt under FLSA? A.Computer employee B.Commission […]

Which of the following is not a reason a company might pay base wages above market competitors? A.Employees are more productive B.Turnover will be lower C.Competitor production costs are lower D.To attract more job applicants Answer: In situations in which […]

Egalitarian pay structures have all but which of the following characteristics? A.Few levels B.Small differentials C.Supports equal treatment D.Supports individual performers Answer: All the following are true of compensable factors except: A.reinforce an organization’s culture. B.support the business direction. C.represent […]

US expatriates believe their organizations do not value their international expertise. Answer: Group incentive pay increases turnover of better performers while individual incentive increases turnover of poorer performers. Answer: TRUE Pay-for-knowledge plans pay new employees for the skills that they […]

Research shows that one quarter to one third of employees question the fairness of their pay frequently. Answer: Many contracts specify a premium be paid above the worker’s base wage for working nonstandard shifts. Answer: TRUE A fast and efficient […]

A study of both U.S. and Slovenian MBAs found that risk taking was higher among Slovenians. Answer: Surveys find 360-degree ratings are used for both development and pay decisions. Answer: FALSE The point of the behavior = f (M, A, […]

When management shows little concern for its employees and workplace relations are bad, employees may support a unionization effort. Answer: Egalitarian pay structures send the message that the organization values differences in work content, individual skills and contributions to the […]

Incentive effect means pay can motivate people to perform better. Answer: External competitiveness decisions focus on both pay levels. Answer: TRUE Both skills and competencies can be used as the basis for developing an internal structure. Answer: TRUE Strategy refers […]

An important criteria for determining the value of research is/are there alternative An 80. An important criteria for determining the value of research is/are there alternative explanations for the research findings? Answer: Most organizations rely upon the market to determine […]

Discrepancies in job analysis information may indicate that more than one job has been lumped under one title. Answer: Vacation and holiday entitlements are among the clauses frequently found in holiday contracts. Answer: FALSE Job-based and person-based job analysis methods […]

Anytime Ted analyzes a proposed project, he always assigns a much higher probability of success to the project than is warranted by the information he has gathered. Ted suffers from which one of the following? A. frame dependence B. overconfidence […]

Several rumors concerning Value Rite stock are causing the market price of the stock to be quite volatile. Given this situation, you decide to buy both a one-month European $25 put and a one-month European $25 call on this stock. […]

An investment project provides cash flows of $1,190 per year for 10 years. If the initial cost is $8,000, what is the payback period? A. 3.36 years B. 5.28 years C. 6.72 years D. 8.13 years E. never Answer: Which […]

Lucinda owns a convertible bond that matures in six years. The bond has a 9 percent coupon and pays interest annually. The face value of the bond is $1,000 and the conversion price is $22. Similar bonds have a market […]

The change in revenue that occurs when one more unit of output is sold is referred to as: A. marginal revenue. B. average revenue. C. total revenue. D. erosion. E. scenario revenue. Answer: The Eliot Co. needs $185,000 a week […]

Farmer Mac owns a large orange grove in Florida. The value of his business is directly related to the price of oranges. Which one of the following is a graphical representation of this price-value relationship? A. exchange line B. net […]

There are two distinct discount rates at which a particular project will have a zero net present value. In this situation, the project is said to: A. have two net present value profiles. B. have operational ambiguity. C. create a […]

You just settled an insurance claim. The settlement calls for increasing payments over a 10-year period. The first payment will be paid one year from now in the amount of $10,000. The following payments will increase by 4.5 percent annually. […]

Which of the following statements are true based on the historical record for 1926-2010? I. Risk and potential reward are inversely related. II. Risk-free securities produce a positive real rate of return each year. III. Returns are more predictable over […]

Which one of the following is the electronic system used by the NYSE for directly transmitting orders to specialists? A. OTCDOT B. SuperDOT C. Instinet D. Internet E. Floornet Answer: Which one of the following statements related to corporate dividends […]

Which one of the following is an advantage of the average accounting return method of analysis? A. easy availability of information needed for the computation B. inclusion of time value of money considerations C. the use of a cutoff rate […]

Long-run exposure to exchange rate risk relates to: A. daily variations in exchange rates. B. variances between spot and future rates. C. unexpected changes in relative economic conditions. D. differences between future spot rates and related forward rates. E. accounting […]

Which of the following apply to a partnership that consists solely of general partners? I. double taxation of partnership profits II. limited partnership life III. active involvement in the firm by all the partners IV. unlimited personal liability for all […]

What is the operating cash flow for 2011? A. $1,226 B. $1,367 C. $1,644 D. $1,766 E. $1,823 Answer: Which of the following help convince managers to work in the best interest of the stockholders? Assume there are no golden […]

The Miller-Orr model: A. recommends selling securities in an amount equal to (U* – C) when the cash balance reaches L. B. requires that marketable securities be sold whenever the cash balance falls below the target level. C. bases the […]

The Wire House purchases its inventory one quarter prior to the quarter of sale. The purchase price is 55 percent of the sales price. The accounts payable period is 45 days. The accounts payable balance at the beginning of quarter […]

The LIBOR is primarily used as the basis for the rate charged on: A. short-term debt in the Lisbon market. B. mortgage loans in the Lisbon market. C. Eurodollar loans in the London market. D. U.S. federal funds. E. interbank […]

In the Black-Scholes model, the symbol “σ” is used to represent the standard deviation of the: A. option premium on a call with a specified exercise price. B. rate of return on the underlying asset. C. volatility of the risk-free […]

The Motor Plant wants to raise $21.4 million through a rights offering so it can modernize its facilities. The subscription price for the offering is set at $11 a share. Currently, the company has 2.6 million shares of stock outstanding […]

All else equal, the market value of a stock will tend to decrease by roughly the aftertax value of the dividend on the: A. dividend declaration date. B. ex-dividend date. C. date of record. D. date of payment. E. day […]