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

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

Accepted Answer

A) operator independent 
B) owner-specific 
C) open-market 
D) official designation 
A) operator independent 
B) owner-specific 
C) open-market 
D) official designation

Question 3

Which of the following is NOT an advantage to exporting goods to reach international markets rather than entering into some form of FDI?

Accepted Answer

A) Fewer political risks. 
B) Greater agency costs. 
C) Lower front-end investment. 
D) All of the above are advantages. 
A) Fewer political risks. 
B) Greater agency costs. 
C) Lower front-end investment. 
D) All of the above are advantages.

Question 4

Forming regional alliances is one way to help mitigate the practice of government protectionism. Which of the following is NOT a regional trade organization formed by government treaty?

Accepted Answer

A) EU 
B) NAFTA 
C) NATO 
D) MERCOSUR 
A) EU 
B) NAFTA 
C) NATO 
D) MERCOSUR

Question 5

Blocked funds are cash flows that

Accepted Answer

A) come in regular intervals in standardized amounts or blocks. 
B) have been restricted in transfer out of a local country. 
C) come from a certain sector or region of the world. 
D) none of the above 
A) come in regular intervals in standardized amounts or blocks. 
B) have been restricted in transfer out of a local country. 
C) come from a certain sector or region of the world. 
D) none of the above

Question 6

________ is NOT one of the three main country-specific risks as outlined by your authors.

Accepted Answer

A) Transfer risk 
B) Cultural differences 
C) Thin equity base 
D) Protectionism 
A) Transfer risk 
B) Cultural differences 
C) Thin equity base 
D) Protectionism

Question 7

________ industries are NOT typically "protected" by government policy.

Accepted Answer

A) Textiles 
B) Defense 
C) Agriculture 
D) "Infant" industries 
A) Textiles 
B) Defense 
C) Agriculture 
D) "Infant" industries

Question 8

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 9

A/n ________ would be an example of a location-specific advantage for an MNE.

Accepted Answer

A) patent 
B) economy of scale 
C) unique source of raw materials 
D) possession of proprietary information 
A) patent 
B) economy of scale 
C) unique source of raw materials 
D) possession of proprietary information

Question 10

List and explain three strategic motives why firms become multinationals and give an example of each.

Accepted Answer

The authors provide 5 strategic motives

Question 11

Of the following, which would NOT be considered an issue for an investment agreement prior to investing in a foreign country?

Accepted Answer

A) The basis for setting transfer prices. 
B) The right to export to third-country markets. 
C) Provision for arbitration of disputes. 
D) All of the above could be negotiated prior to investing. 
A) The basis for setting transfer prices. 
B) The right to export to third-country markets. 
C) Provision for arbitration of disputes. 
D) All of the above could be negotiated prior to investing.

Question 12

________ risks are those that affect the MNE at the local or project level, but originate at the country level.

Accepted Answer

A) Country-specific 
B) Firm-specific 
C) Global-specific 
D) none of the above 
A) Country-specific 
B) Firm-specific 
C) Global-specific 
D) none of the above

Question 13

Which of the following is an advantage to exporting goods to reach international markets rather than entering into some form of FDI?

Accepted Answer

A) Fewer agency costs. 
B) Fewer direct advantages from research and development. 
C) A greater risk of losing markets to copycat goods producers. 
D) An inability to exploit R&D as effectively as if also invested abroad. 
A) Fewer agency costs. 
B) Fewer direct advantages from research and development. 
C) A greater risk of losing markets to copycat goods producers. 
D) An inability to exploit R&D as effectively as if also invested abroad.

Question 14

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

Accepted Answer

A) 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) May be a realistic alternative when 100% foreign ownership is not allowed. 
A) 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) May be a realistic alternative when 100% foreign ownership is not allowed.

Question 15

A/n ________ would be an example of an owner-specific advantage for an MNE.

Accepted Answer

A) patent 
B) economy of scale 
C) economy of scope 
D) all of the above 
A) patent 
B) economy of scale 
C) economy of scope 
D) all of the above

Question 16

Which of the following could be considered an example of forced reinvestment if the blockage of funds was expected to be temporary?

Accepted Answer

A) Vertical reinvestment by an automobile manufacturer to buy parts suppliers and showrooms. 
B) A lumber cutting company subsequently builds a paper mill with blocked funds. 
C) Purchase of local money market instruments and short-term loans. 
D) all of the above 
A) Vertical reinvestment by an automobile manufacturer to buy parts suppliers and showrooms. 
B) A lumber cutting company subsequently builds a paper mill with blocked funds. 
C) Purchase of local money market instruments and short-term loans. 
D) all of the above

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

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

Which of the following is NOT an advantage to exporting goods to reach international markets rather than entering into some form of FDI?

Forming regional alliances is one way to help mitigate the practice of government protectionism. Which of the following is NOT a regional trade organization formed by government treaty?

Blocked funds are cash flows that

________ is NOT one of the three main country-specific risks as outlined by your authors.

________ industries are NOT typically "protected" by government policy.

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

A/n ________ would be an example of a location-specific advantage for an MNE.

List and explain three strategic motives why firms become multinationals and give an example of each.

Of the following, which would NOT be considered an issue for an investment agreement prior to investing in a foreign country?

________ risks are those that affect the MNE at the local or project level, but originate at the country level.

Which of the following is an advantage to exporting goods to reach international markets rather than entering into some form of FDI?

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

A/n ________ would be an example of an owner-specific advantage for an MNE.

Which of the following could be considered an example of forced reinvestment if the blockage of funds was expected to be temporary?

Globalization and the Multinational Enterprise

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

Interest Rate and Currency Swaps

Foreign Exchange Rate Determination and Forecasting

Transaction Exposure

Operating Exposure

Translation Exposure

The Global Cost and Availability of Capital

Sourcing Equity Globally

Sourcing Debt Globally

International Portfolio Theory and Diversification

Multinational Capital Budgeting

Multinational Tax Management

Working Capital Management

International Trade Finance

Filters

Exam 18: Foreign Direct Investment Theory and Political Risk

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

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

Which of the following is NOT an advantage to exporting goods to reach international markets rather than entering into some form of FDI?

Forming regional alliances is one way to help mitigate the practice of government protectionism. Which of the following is NOT a regional trade organization formed by government treaty?

Blocked funds are cash flows that

________ is NOT one of the three main country-specific risks as outlined by your authors.

________ industries are NOT typically "protected" by government policy.

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

A/n ________ would be an example of a location-specific advantage for an MNE.

List and explain three strategic motives why firms become multinationals and give an example of each.

Of the following, which would NOT be considered an issue for an investment agreement prior to investing in a foreign country?

________ risks are those that affect the MNE at the local or project level, but originate at the country level.

Which of the following is an advantage to exporting goods to reach international markets rather than entering into some form of FDI?

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

A/n ________ would be an example of an owner-specific advantage for an MNE.

Which of the following could be considered an example of forced reinvestment if the blockage of funds was expected to be temporary?

Globalization and the Multinational Enterprise

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

Interest Rate and Currency Swaps

Foreign Exchange Rate Determination and Forecasting

Transaction Exposure

Operating Exposure

Translation Exposure

The Global Cost and Availability of Capital

Sourcing Equity Globally

Sourcing Debt Globally

International Portfolio Theory and Diversification

Multinational Capital Budgeting

Multinational Tax Management

Working Capital Management

International Trade Finance

Filters