GMS Test Bank 8 questions with
complete correct answers
Which of the following is NOT a cost associated with negotiating a licensing agreement? - correct answer
✔✔Arbitrage cost
International joint ventures (IJVs) may help foreign firms overcome existing market access restrictions in
countries such as China and open up market opportunities that otherwise would not be available.
True/False? - correct answer ✔✔True
Entry modes may be classified by their risk/reward profile. In this context intermediate modes represent
a sharing of the risks and rewards between two or more firms. True/False? - correct answer ✔✔True
Which mode of entry carries the lowest risk and has the lowest potential return? - correct answer
✔✔Exporting
Export management companies are firms that assist other firms in marketing their products in foreign
markets. What is the generic term for such companies? - correct answer ✔✔Intermediaries
Companies interested in indirect exporting may find themselves approached by a(n)
______________________ based in their own home country working on behalf of a foreign - correct
answer ✔✔Export buying agent
Which of the following (if any) is a method of calculating royalty payments in a licensing transaction? -
correct answer ✔✔(a) Running
(b) Lump sum
(c) Minimum
Foreign sales subsidiaries are wholly owned by their parent firms and are incorporated under the laws of
their home country. True/False? - correct answer ✔✔False
complete correct answers
Which of the following is NOT a cost associated with negotiating a licensing agreement? - correct answer
✔✔Arbitrage cost
International joint ventures (IJVs) may help foreign firms overcome existing market access restrictions in
countries such as China and open up market opportunities that otherwise would not be available.
True/False? - correct answer ✔✔True
Entry modes may be classified by their risk/reward profile. In this context intermediate modes represent
a sharing of the risks and rewards between two or more firms. True/False? - correct answer ✔✔True
Which mode of entry carries the lowest risk and has the lowest potential return? - correct answer
✔✔Exporting
Export management companies are firms that assist other firms in marketing their products in foreign
markets. What is the generic term for such companies? - correct answer ✔✔Intermediaries
Companies interested in indirect exporting may find themselves approached by a(n)
______________________ based in their own home country working on behalf of a foreign - correct
answer ✔✔Export buying agent
Which of the following (if any) is a method of calculating royalty payments in a licensing transaction? -
correct answer ✔✔(a) Running
(b) Lump sum
(c) Minimum
Foreign sales subsidiaries are wholly owned by their parent firms and are incorporated under the laws of
their home country. True/False? - correct answer ✔✔False
