BUSN 410 COMPREHENSIVE STUDY GUIDE
COMPLETE QUESTIONS AND CORRECT
ANSWERS
●● the three main forms of international business
Answer: trade, licensing of intellectual property, and foreign direct
investment (FDI)
●● foreign direct investment (FDI)
Answer: ownership or control of productive assets
●● commercial risk
Answer: risk that one party to a transaction will fail to perform its
contractual obligations
●● transport risk
Answer: risk of loss, damage, or delay of goods during air, land, or sea
transportation
●● currency exchange risk
Answer: risk arising from fluctuations in the relative value of currencies
used in a transaction
, ●● regulatory compliance risk
Answer: risk arising from the need to comply with the laws and
regulations of every country in which a firm operates
●● business environment
Answer: policies, laws, regulations, and institutions governing private
sector activity
●● How does investment climate differ from business environment
Answer: Includes broader factors like political stability, infrastructure,
labor markets, and economic predictability
●● Gaskin v. Stumm Handel
Answer: A contract written in a foreign language is enforceable even if
one party does not understand the language.
Connected Term/Risk: Language & cultural risk; contract enforceability
●● Coker v. Burlington Industries
Answer: Buyer assumed the commercial risk; inability to obtain import
license does not void contract absent risk allocation.
Connected Term/Risk: Commercial risk; allocation of risk
●● Bernina Distributors v. Bernina Sewing Machine
COMPLETE QUESTIONS AND CORRECT
ANSWERS
●● the three main forms of international business
Answer: trade, licensing of intellectual property, and foreign direct
investment (FDI)
●● foreign direct investment (FDI)
Answer: ownership or control of productive assets
●● commercial risk
Answer: risk that one party to a transaction will fail to perform its
contractual obligations
●● transport risk
Answer: risk of loss, damage, or delay of goods during air, land, or sea
transportation
●● currency exchange risk
Answer: risk arising from fluctuations in the relative value of currencies
used in a transaction
, ●● regulatory compliance risk
Answer: risk arising from the need to comply with the laws and
regulations of every country in which a firm operates
●● business environment
Answer: policies, laws, regulations, and institutions governing private
sector activity
●● How does investment climate differ from business environment
Answer: Includes broader factors like political stability, infrastructure,
labor markets, and economic predictability
●● Gaskin v. Stumm Handel
Answer: A contract written in a foreign language is enforceable even if
one party does not understand the language.
Connected Term/Risk: Language & cultural risk; contract enforceability
●● Coker v. Burlington Industries
Answer: Buyer assumed the commercial risk; inability to obtain import
license does not void contract absent risk allocation.
Connected Term/Risk: Commercial risk; allocation of risk
●● Bernina Distributors v. Bernina Sewing Machine
