State Farm Estimatics Exam 2025 Study Guide (Latest Questions & Practice)

State Farm Estimatics Exam Latest Questions and Answers (2026
/2027) (Verified Answers)

if a company seeks to limit foreign exchange rate exposure in the forward direction,
what is the most effective way to do this? - currency hedging

exchange rate risk associating with the time delay between entering a contract and
settling it - transaction risk

forward transaction that protects traders and investors from exposure to
fluctuations of the spot rate - hedging

a means of spreading out activities in different currency zones in order to offset the
currency losses in certain regions through gains in other regions - strategic heding

amount of resources committed to entering a foreign market - scale of entry
how do institutions reduce uncertainty? - by signaling which conduct is legit and
which is not

pillar of formal institution, coercive power of government - regulatory

pillar of informal institution, the mechanism through which norms influence individual
and firm behavior - normative

pillar of informal institution, taken for granted values and beliefs that guide behavior
- cognitive

institutions represented by laws, regulations and rules - formal

institutions represented by norms, culture and ethics - informal

,the necessity of making rational decisions in the absence of complete information -
bounded rationality

bounded rationality is a position in which view of global business - institution

political system that affects global business with an individuals right to freedom of
expression and organization - democracy

political system that affects global business with hostility towards business, higher
political risk such as nationalism - totalitarianism

political system where citizens elect representatives to govern the country on their
behalf - democracy

political system where one person or party exercises absolute political control over
the population - totalitarianism

law that uses comprehensive statutes and codes as a primary means to form legal
judgements - civil

law that is shaped by precedents and traditions from previous judicial decisions -
common

law that is based on religious teachings - theocratic

less confrontational, shorter, less specific form of law - civil


what costs exist to a country receiving FDI? - loss of sovereignty, adverse effects on
competition, net outflow in the capital account

The aggregation of importing and exporting that leads to the country-level trade

,surplus or deficit. - balance of trade
X X X X X X




firms with adegree of resource similarity are likely to have similar competitive actions-
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high
X




a high degree of resource similarity but low market commonality =
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intensity of X X




rivalry-highest X X




little resource similarity but high market commonality = intensity of rivalry - lowest
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mercantilism, absolute advantage and comparative advantage belong to what theory of int X X X X X X X X X X X




ernational trade - classical X X X




theory of international trade that relies on more realistic product life cycles and first mover ad
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vantages - modern X X




under free trade, a nation gains by specializing in economic activities in which it has advantage -
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absolute X




focuses on the idea that if a country does not have absolute advantage, they can still choose to sp
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ecialize in the production of one good where it has advantage - comparative
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comparative advantage and absolute advantage stem from - factor endowments X X X X X X X X X




theory that the wealth of the world is fixed and that a nation that imports more and exports less will
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be richer - mercantilism
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stage of the product life cycle where production of a new product that commands a price pr
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emium will concentrate in the US - new
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stage of the product life cycle where demand and ability to produce grow in other
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, developed nations - maturing
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view that claims phenomenon of globalization was initially driven by the desire of Western eco
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nomies to exploit their power through MNE's - new
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