WGU D080 Managing in a Global Business Environment
questions with verified answers
- Currency swap contracts are coordinated transactions with a simultaneous buy
and sell of a currency for two different dates.
- Currency option contracts are the option or the right—but not the obligation—
to exchange a specific amount of currency on a specific future date and at a
specific agreed-on rate.
- Currency futures contracts are contracts that require the exchange of a specific
amount of currency at a specific future date and at a specific exchange rate.
- internal forward rate is a company-generated forecast of future spot exchange
rates.
- Companies use additional strategies to make money in the exchange markets by
taking either a long position or a short position on an asset. Essentially, taking a
long position is purchasing an asset and forecasting that the value is going to
increase. Taking a short position is looking for the value of an asset to go down.
Ans✓✓✓ Describe the four derivative currency instruments used to hedge
against currency risk.
- Host countries offer businesses a combination of tax incentives and loans to
invest.
- Host governments improve or enhance local infrastructure—energy,
transportation, and communications—to encourage specific industries to invest.
- Host-country governments streamline the process of establishing offices or
production in their countries.
- Countries seek to improve their workforce through education and job training.
- Host-country governments seek to reassure businesses that the local operating
conditions are stable, transparent (i.e., policies are clearly stated and in the public
domain), and unlikely to change.
, - Export processing zones or special economic zones are usually a distinct
geographic area near a port that is ready to promote export industries. Ans✓✓✓
Identify the strategies that governments use to promote FDI.
- Host governments can specify ownership restrictions if they want to keep
control of local markets or industries in their citizens' hands.
- A company's home government usually imposes tax rates and a sanction to
persuade companies to invest in the domestic market rather than a foreign one.
- Foreign investors may be required to purchase a certain percentage of
intermediate goods from the host countries.
- Changes in governments or changes in policies may lead to governments
choosing to expropriate foreign assets to nationalize critical industries such as oil,
electric power, mines, and telecommunications. Ans✓✓✓ Identify the strategies
that governments use to restrict FDI.
- Quotas restrict competition for domestic commodities, which raises prices and
reduces the selection.
- Quotas may also foster negative economic activities. Import quotas may
promote administrative corruption, especially in countries where import quotas
are given to selected importers. Ans✓✓✓ Explain the impact of quotas
- Some parts of the economy may not be able to compete with cheaper or better
imports.
- Global demand may shift so there is no longer a demand for the goods or
services produced by a country.
- Relying on another country for vital resources makes a country dependent on
that country. Ans✓✓✓ What are some downsides to specializaton?
- the first involves core principles regarding nondiscrimination
questions with verified answers
- Currency swap contracts are coordinated transactions with a simultaneous buy
and sell of a currency for two different dates.
- Currency option contracts are the option or the right—but not the obligation—
to exchange a specific amount of currency on a specific future date and at a
specific agreed-on rate.
- Currency futures contracts are contracts that require the exchange of a specific
amount of currency at a specific future date and at a specific exchange rate.
- internal forward rate is a company-generated forecast of future spot exchange
rates.
- Companies use additional strategies to make money in the exchange markets by
taking either a long position or a short position on an asset. Essentially, taking a
long position is purchasing an asset and forecasting that the value is going to
increase. Taking a short position is looking for the value of an asset to go down.
Ans✓✓✓ Describe the four derivative currency instruments used to hedge
against currency risk.
- Host countries offer businesses a combination of tax incentives and loans to
invest.
- Host governments improve or enhance local infrastructure—energy,
transportation, and communications—to encourage specific industries to invest.
- Host-country governments streamline the process of establishing offices or
production in their countries.
- Countries seek to improve their workforce through education and job training.
- Host-country governments seek to reassure businesses that the local operating
conditions are stable, transparent (i.e., policies are clearly stated and in the public
domain), and unlikely to change.
, - Export processing zones or special economic zones are usually a distinct
geographic area near a port that is ready to promote export industries. Ans✓✓✓
Identify the strategies that governments use to promote FDI.
- Host governments can specify ownership restrictions if they want to keep
control of local markets or industries in their citizens' hands.
- A company's home government usually imposes tax rates and a sanction to
persuade companies to invest in the domestic market rather than a foreign one.
- Foreign investors may be required to purchase a certain percentage of
intermediate goods from the host countries.
- Changes in governments or changes in policies may lead to governments
choosing to expropriate foreign assets to nationalize critical industries such as oil,
electric power, mines, and telecommunications. Ans✓✓✓ Identify the strategies
that governments use to restrict FDI.
- Quotas restrict competition for domestic commodities, which raises prices and
reduces the selection.
- Quotas may also foster negative economic activities. Import quotas may
promote administrative corruption, especially in countries where import quotas
are given to selected importers. Ans✓✓✓ Explain the impact of quotas
- Some parts of the economy may not be able to compete with cheaper or better
imports.
- Global demand may shift so there is no longer a demand for the goods or
services produced by a country.
- Relying on another country for vital resources makes a country dependent on
that country. Ans✓✓✓ What are some downsides to specializaton?
- the first involves core principles regarding nondiscrimination
