Question 1

The I in OLI refers to an advantage in a firm's home market that is an ________.

Accepted Answer

A) internalization 
B) industry-specific advantage 
C) international abnormality 
D) none of the above 
A) internalization 
B) industry-specific advantage 
C) international abnormality 
D) none of the above

Question 2

Joint ventures have significant advantages as well several disadvantages versus a wholly owned subsidiary with regard to investment abroad.Define the two types of investment opportunities and provide a comprehensive list of the advantages and disadvantages for the joint venture form of international investment.

Accepted Answer

A joint venture is here defined as share

Question 3

The OLI paradigm is an attempt to create a framework to explain why MNEs choose ________ rather than some other form of international venture.

Accepted Answer

A) licensing 
B) joint ventures 
C) foreign direct investment 
D) strategic alliances 
A) licensing 
B) joint ventures 
C) foreign direct investment 
D) strategic alliances

Question 4

Which of the following is NOT an advantage to a joint venture?

Accepted Answer

A) There is possible loss of opportunity to enter the foreign market with FDI later. 
B) The local partner understands the customs and mores of the foreign market. 
C) The local partner can provide competent management at many levels. 
D) It may be a realistic alternative when 100% foreign ownership is not allowed. 
A) There is possible loss of opportunity to enter the foreign market with FDI later. 
B) The local partner understands the customs and mores of the foreign market. 
C) The local partner can provide competent management at many levels. 
D) It may be a realistic alternative when 100% foreign ownership is not allowed.

Question 5

Which of the following is NOT an example of a country-specific risk?

Accepted Answer

A) transfer risk 
B) war and ethnic strife 
C) cultural and religious heritage 
D) All of the above are examples of country-specific risk. 
A) transfer risk 
B) war and ethnic strife 
C) cultural and religious heritage 
D) All of the above are examples of country-specific risk.

Question 6

Licensing is a popular form of foreign investment because it does not need a sizable commitment of funds,and political risk is often minimized.

Accepted Answer

A) True 
 B)False

Question 7

________,also known as micro risks,are political risks that affect the MNE at the project and corporate level but do not originate at the country level.

Accepted Answer

A) Firm-specific risks 
B) Country-specific risks 
C) Global-specific risks 
D) Transfer risks 
A) Firm-specific risks 
B) Country-specific risks 
C) Global-specific risks 
D) Transfer risks

Question 8

A ________ is establishing a production or service facility from the ground up.

Accepted Answer

A) joint venture 
B) licensing agreement 
C) greenfield investment 
D) wholly-owned facility 
A) joint venture 
B) licensing agreement 
C) greenfield investment 
D) wholly-owned facility

Question 9

Negotiations under the General Agreement on Tariffs and Trade (GATT)have NOT had much impact on reducing the level of tariffs over the last several decades.

Accepted Answer

A) True 
 B)False

Question 10

OPIC stands for

Accepted Answer

A) Organization for the Prevention of Insufficient Capitalization. 
B) Organization of Petroleum Importing Countries. 
C) Overseas Private Investment Corporation. 
D) Overseas Public Insurance Commission. 
A) Organization for the Prevention of Insufficient Capitalization. 
B) Organization of Petroleum Importing Countries. 
C) Overseas Private Investment Corporation. 
D) Overseas Public Insurance Commission.

Question 11

A country can react to the potential for blocked funds prior to making an investment,during operations,or by investing in the local country in assets than maintain their value.

Accepted Answer

A) True 
 B)False

Question 12

The L in OLI refers to an advantage in a firm's home market that is a

Accepted Answer

A) liability in the domestic market. 
B) location-specific advantage. 
C) longevity in a particular market. 
D) none of the above. 
A) liability in the domestic market. 
B) location-specific advantage. 
C) longevity in a particular market. 
D) none of the above.

Question 13

Terrorism,cyber attacks,and the anti-globalization movement are each examples of ________ risks.

Accepted Answer

A) firm-specific 
B) country-specific 
C) institutional 
D) global-specific 
A) firm-specific 
B) country-specific 
C) institutional 
D) global-specific

Question 14

What does the OLI Paradigm propose to explain? Define each component and provide an example of each.

Accepted Answer

The OLI Paradigm is an attempt to develo

Question 15

MNEs typically used licensing with independent firms rather than with their own foreign subsidiaries.

Accepted Answer

A) True 
 B)False

The I in OLI refers to an advantage in a firm's home market that is an ________.

The OLI paradigm is an attempt to create a framework to explain why MNEs choose ________ rather than some other form of international venture.

Which of the following is NOT an advantage to a joint venture?

Which of the following is NOT an example of a country-specific risk?

Licensing is a popular form of foreign investment because it does not need a sizable commitment of funds,and political risk is often minimized.

________,also known as micro risks,are political risks that affect the MNE at the project and corporate level but do not originate at the country level.

A ________ is establishing a production or service facility from the ground up.

Negotiations under the General Agreement on Tariffs and Trade (GATT)have NOT had much impact on reducing the level of tariffs over the last several decades.

OPIC stands for

A country can react to the potential for blocked funds prior to making an investment,during operations,or by investing in the local country in assets than maintain their value.

The L in OLI refers to an advantage in a firm's home market that is a

Terrorism,cyber attacks,and the anti-globalization movement are each examples of ________ risks.

What does the OLI Paradigm propose to explain? Define each component and provide an example of each.

MNEs typically used licensing with independent firms rather than with their own foreign subsidiaries.

Current Multinational Challenges and the Global Economy

Financial Goals and Corporate Governance

The International Monetary System

The Balance of Payments

Current Multinational Financial Challenges: the Credit Crisis of 2007 - 2009

The Foreign Exchange Market

International Parity Conditions

Foreign Currency Derivatives and Swaps

Foreign Exchange Rate Determination and Forecasting

Transaction and Translation Exposure

Operating Exposure

The Global Cost and Availability of Capital

Sourcing Equity and Debt Globally

Multinational Tax Management

Multinational Capital Budgeting and Cross-Border Acquisitions

International Portfolio Theory and Diversification

Working Capital Management

International Trade Finance

Filters

Exam 15: Foreign Direct Investment and Political Risk

The I in OLI refers to an advantage in a firm's home market that is an ________.

The OLI paradigm is an attempt to create a framework to explain why MNEs choose ________ rather than some other form of international venture.

Which of the following is NOT an advantage to a joint venture?

Which of the following is NOT an example of a country-specific risk?

Licensing is a popular form of foreign investment because it does not need a sizable commitment of funds,and political risk is often minimized.

________,also known as micro risks,are political risks that affect the MNE at the project and corporate level but do not originate at the country level.

A ________ is establishing a production or service facility from the ground up.

Negotiations under the General Agreement on Tariffs and Trade (GATT)have NOT had much impact on reducing the level of tariffs over the last several decades.

OPIC stands for

A country can react to the potential for blocked funds prior to making an investment,during operations,or by investing in the local country in assets than maintain their value.

The L in OLI refers to an advantage in a firm's home market that is a

Terrorism,cyber attacks,and the anti-globalization movement are each examples of ________ risks.

What does the OLI Paradigm propose to explain? Define each component and provide an example of each.

MNEs typically used licensing with independent firms rather than with their own foreign subsidiaries.

Current Multinational Challenges and the Global Economy

Financial Goals and Corporate Governance

The International Monetary System

The Balance of Payments

Current Multinational Financial Challenges: the Credit Crisis of 2007 - 2009

The Foreign Exchange Market

International Parity Conditions

Foreign Currency Derivatives and Swaps

Foreign Exchange Rate Determination and Forecasting

Transaction and Translation Exposure

Operating Exposure

The Global Cost and Availability of Capital

Sourcing Equity and Debt Globally

Multinational Tax Management

Multinational Capital Budgeting and Cross-Border Acquisitions

International Portfolio Theory and Diversification

Working Capital Management

International Trade Finance

Filters