INTERNATIONAL FINANCIAL MANAGEMENT
EXAM PREP QUESTIONS AND ANSWERS FULLY
VERIFIED
◉ Which of the following theories identifies the non-transferability
of resources as a reason for international business?
a. theory of comparative advantage
b. imperfect markets theory
c. product cycle theory
d. None of these are correct
Answer: b. imperfect markets theory
◉ Which of the following theories suggests that firms seek to
penetrate new markets over time?
a. theory of comparative advantage
b. imperfect markets theory
c. product cycle theory
d. None of these are correct.
Answer: c. product cycle theory
,◉ An industry based on which of the following would most likely
take advantage of lower costs in some less developed foreign
countries?
a. assembly line production
b. specialized professional services
c. nuclear missile programs
d. development of more sophisticated computer technology
Answer: a. assembly line production
◉ Four MNCs generate the same level of sales. The MNC that
______________________would likely have the most direct foreign
investment.
a. exports all of its products
b. produces and sells its products locally
c. imports products from unrelated firms in other countries and sells
them locally
d. acquires a foreign firm that produces most of its products to be
sold in that foreign country
Answer: d. acquires a foreign firm that produces most of its products
to be sold in that foreign country
◉ Which of the following is an example of direct foreign investment?
,a. exporting to a country
b. establishing licensing arrangements in a country
c. purchasing existing companies in a country
d. investing directly (without brokers) in foreign stocks
Answer: c. purchasing existing companies in a country
◉ According to the text, licensing allows a firm to:
a. import without being subject to government restrictions.
b. provide its technology for a fee.
c. export without government restrictions.
d. None of these are correct.
Answer: b. provide its technology for a fee
◉ Assume that an MNC purchases a foreign building, and then leases
the building to another party and allows that party to operate the
business in the building for 30 years if the party follows standards
set by the MNC. This process is referred to as:
a. a foreign acquisition
b. franchising
, c. a licensing agreement
d. exporting
Answer: b. franchising
◉ Licensing obligates a firm to provide ____, while franchising
obligates a firm to provide ____.
a. a specialized sales or service strategy; its technology
b. its technology; a specialized sales or service strategy
c. its technology; its technology
d. a specialized sales or service strategy; a specialized sales or
service strategy
e. its technology; an initial investment
Answer: b. its technology; a specialized sales or service strategy
◉ International trade:
a. is a relatively conservative approach to foreign market
penetration.
b. entails minimal risk.
c. does not require a large amount of investment.
d. All of these are correct.
EXAM PREP QUESTIONS AND ANSWERS FULLY
VERIFIED
◉ Which of the following theories identifies the non-transferability
of resources as a reason for international business?
a. theory of comparative advantage
b. imperfect markets theory
c. product cycle theory
d. None of these are correct
Answer: b. imperfect markets theory
◉ Which of the following theories suggests that firms seek to
penetrate new markets over time?
a. theory of comparative advantage
b. imperfect markets theory
c. product cycle theory
d. None of these are correct.
Answer: c. product cycle theory
,◉ An industry based on which of the following would most likely
take advantage of lower costs in some less developed foreign
countries?
a. assembly line production
b. specialized professional services
c. nuclear missile programs
d. development of more sophisticated computer technology
Answer: a. assembly line production
◉ Four MNCs generate the same level of sales. The MNC that
______________________would likely have the most direct foreign
investment.
a. exports all of its products
b. produces and sells its products locally
c. imports products from unrelated firms in other countries and sells
them locally
d. acquires a foreign firm that produces most of its products to be
sold in that foreign country
Answer: d. acquires a foreign firm that produces most of its products
to be sold in that foreign country
◉ Which of the following is an example of direct foreign investment?
,a. exporting to a country
b. establishing licensing arrangements in a country
c. purchasing existing companies in a country
d. investing directly (without brokers) in foreign stocks
Answer: c. purchasing existing companies in a country
◉ According to the text, licensing allows a firm to:
a. import without being subject to government restrictions.
b. provide its technology for a fee.
c. export without government restrictions.
d. None of these are correct.
Answer: b. provide its technology for a fee
◉ Assume that an MNC purchases a foreign building, and then leases
the building to another party and allows that party to operate the
business in the building for 30 years if the party follows standards
set by the MNC. This process is referred to as:
a. a foreign acquisition
b. franchising
, c. a licensing agreement
d. exporting
Answer: b. franchising
◉ Licensing obligates a firm to provide ____, while franchising
obligates a firm to provide ____.
a. a specialized sales or service strategy; its technology
b. its technology; a specialized sales or service strategy
c. its technology; its technology
d. a specialized sales or service strategy; a specialized sales or
service strategy
e. its technology; an initial investment
Answer: b. its technology; a specialized sales or service strategy
◉ International trade:
a. is a relatively conservative approach to foreign market
penetration.
b. entails minimal risk.
c. does not require a large amount of investment.
d. All of these are correct.
