IBT
International Business and Finance Quiz
Test your knowledge on the key concepts of international business and finance with this engaging quiz! Dive into topics such as foreign investment, currency valuation, and strategic alliances that shape the global market.
- 50 carefully crafted questions.
- Covers a wide range of international finance topics.
- Perfect for students, professionals, and anyone eager to learn.
Refers to holding securities, such as stocks and bonds, of companies in countries outside one’s own but does not entail the active management of foreign assets.
FPI (foreign portfolio investment)
FDI (foreign direct investment)
Horizontal FDI
Vertical FDI
Is an increase in the value of the currency
Formal and informal institutions
Appreciation
Strategic alliances
Depreciation
Refers to direct, hands-on management of foreign assets
MANAGEMENT CONTROL RIGHT
Strong demand
FPI (foreign portfolio investment)
FDI (foreign direct investment)
Are voluntary agreements between firms involving exchange, sharing, or co-developing of products, technologies, or services.
LOCATION-SPECIFIC ADVANTAGES
JOINT VENTURE
Strategic alliances
Equity
Possessing and leveraging of certain valuable, rare, hard-to-imitate, and organizationally embedded (VRIO) assets overseas in the context of FDI.
OWNERSHIP
LOCATION
MNE (MULTINATIONAL ENTERPRISE)
Oversupply
Is a loss in the value of the currency.
NON-EQUITY ALLIANCE
Depreciation
Loss of control
ACQUISITION
Buying and selling of technology and intellectual property rights.
LICENSING
MERGER
MARKET-SEEKING
SYNERGISTIC
PPP is the conversion that determines the equivalent amount of goods and services different currencies can purchase.
True
False
is to leverage superior resources.
MANAGERIAL MOTIVES
HUBRIS
SYNERGISTIC
Is a child company of two parent companies. It is maintained by sharing their resources and equity (alliances in which some form of shareholding exists) with a given agreement.
EQUITY STRATEGIC ALLIANCE
JOINT VENTURE
NON-EQUITY ALLIANCE
Loss of control
Firms go to countries that have a strong demand for their products and services.
Loss of control
EFFICIENCY SEEKING
MARKET-SEEKING
INNOVATION SEEKING
CATEGORIES OF STRATEGIC ALLIANCES
JOINT VENTURE
Strategic alliances
Increased liability
EQUITY STRATEGIC ALLIANCE
NON-EQUITY ALLIANCE
Innovation seeking - firms often single out the most efficient locations featuring a combination of scale economies and low-cost factors.
True
False
Non Equity Alliance is part of the Supply and Demand of Foreign Exchange
True
False
Innovation Seeking - firms target countries and regions renowned for generating world-class innovations, such as Silicon Valley (IT), Dallas (in telecom), and Paris (in perfumes).
True
False
PROS AND CONS OF FDI Three primary political views on FDI.
RADICAL VIEW ON FDI
Productivity and Balance of Payments
CULTURAL DISTANCE
FREE MARKET VIEW ON FDI
PRAGMATIC NATIONALISM VIEW ON FDI
Considering both the pros and cons of FDI when its benefits outweigh its costs.
FREE MARKET VIEW ON FDI
PRAGMATIC NATIONALISM VIEW ON FDI
RADICAL VIEW ON FDI treats FDI
More advanced technology form abroad can create technology spillovers that benefit domestic firms and industries)
CAPITAL INFLOW
JOB CREATION
TECHNOLOGY
ADVANCED MANAGEMENT KNOW-HOW
Loss of Sovereignty - Lost of some, but not all of the economic sovereignty associated with FDI. Because of FDI, decisions to produce and market products and services in a host country are being made by foreigners.
True
False
Relative Price Differences and Purchasing Power Parity (PPP), Interest Rates and Money Supply, Productivity and Balance of Payments, Exchange Rate Policies, and Investor Psychology are called Supply and Demand of Foreign Exchange.
True
False
May be high valued. It many developing countries, it is often difficult for the development of management know-how to reach a world-class level in the absence of FDI.
ADVANCED MANAGEMENT KNOW-HOW
TECHNOLOGY SPILLOVER
CAPITAL INFLOW
JOB CREATION
Is the difference between two cultures along identifiable dimensions such as individualism. Considering culture as an informal part of institutional frameworks governing a particular country.
CULTURAL DISTANCE
INSTITUTIONAL DISTANCE
FIRST-MOVER ADVANTAGES
LATE-MOVER ADVANTAGE
Benefit that accrues to firms that enter the market later and that early entrants do not enjoy, is First-Mover-Advantage
True
False
FIRST-MOVER ADVANTAGES defined as the benefits that accrue to firms that enter the market first and that later entrants do not enjoy.
True
False
Is the willingness of a government to let demand and supply conditions determine exchange rates.
Exchange Rate Policies
FIXED EXCHANGE RATE POLICY
FLOATING (or FLEXIBLE) EXCHANGE RATE POLICY
Refers to the amount of resources committed to entering a foreign market. Large-scale entries demonstrate a strategic commitment to certain markets.
SCALE OF ENTRY
MODES OF ENTRY
NONEQUITY MODE
EQUITY MODE
Organizations create an agreement to share resources without creating a separate entity or sharing equity. This is more loose and informal strategy.
JOINT VENTURE
EQUITY STRATEGIC ALLIANCE
NON-EQUITY ALLIANCE
This only occurs when one company purchases equity in another business (partial acquisition), or each business equity in each other (cross-equity transactions).
EQUITY STRATEGIC ALLIANCE
NON-EQUITY ALLIANCE
JOINT VENTURE
A Merger is the combination of operations and management of two firms to establish a new legal entity.
True
False
Hubris - more power, prestige, and money.
True
False
An Acquisition is transfer of the control of operations and management from one firm (target) to another (acquirer), the former becoming a unit of the latter.
True
False
Clients pay contractors to design and construct new facilities and train personnel.
Licensing or franchising
Build-operate-transfer (BOT)
Research and Development Contracts
Turnkey Projects
The licensor/ franchisor sells the rights to intellectual property such as patents and know-how to the licensee/franchisee for a royalty fee.
Licensing or franchising
Turnkey Projects
Research and Development Contracts
Co-marketing
Investors (currency traders), foreign portfolio investors, and average citizens may move in the same direction at the same time
Relative Price Differences and Purchasing Power Parity (PPP)
Interest Rates and Money Supply
Productivity and Balance of Payments
Investor Psychology
Exchange Rate Policies
Refer to outsourcing agreements in R&D between firms. Firm A agrees to perform certain R&D work for Firm B.
Turnkey Projects
Co-marketing
Licensing or franchising
Research and Development Contracts
For more power, prestige, and money.
SYNERGISTIC
HUBRIS
MANAGERIAL MOTIVES
Refers to efforts among a number of firms to jointly market their products and services.
Research and Development Contracts
Co-marketing
Turnkey Projects
Licensing or franchising
A nonequity mode of entry used to build longer-term presence by building and then operating a facility for a period of time before transferring operations to a domestic agency or firm is called Build-operation-Transfer
True
False
The possibility of unauthorized diffusion of firm-specific know- how is Dissemination Risk
True
False
The imperfect rules governing international market transactions is "Free Market"
True
False
Advantages enjoyed by a firm that derive from the places in which it operates.
OWNERSHIP
LOCATION
INTERNALIZATION
Is the clustering of economic activities in certain locations.
Agglomeration
Dissemination risk
Market imperfections
A rise in a country’s productivity relative to other countries will improve its competitive position in international trade.
Exchange Rate Policies
Productivity and Balance of Payments
Interest Rates and Money Supply
Relative Price Differences and Purchasing Power Parity (PPP)
Investor Psychology
A subsidiary located in a foreign country that is entirely owned by the parent multinational.
JOINT VENTURE (JV)
Co-marketing
WHOLLY OWNED SUBSIDIARY (WOS)
Research and Development Contracts
A new corporate entity jointly created and owned by two or more parent companies.
JOINT VENTURE (JV)
WHOLLY OWNED SUBSIDIARY (WOS)
Licensing or franchising
Turnkey Projects
Methods used to enter a foreign market – at the same time.
SCALE OF ENTRY
NONEQUITY MODE
MODES OF ENTRY
EQUITY MODE
What are the Four Strategic Goals?
NATURAL RESOURCES
CULTURAL DISTANCE
INNOVATION SEEKING
MARKET-SEEKING
INSTITUTIONAL DISTANCE
EFFICIENCY SEEKING
This policy fixes the exchange rate of its domestic currency relative to other currencies.
FIXED EXCHANGE RATE POLICY
FLOATING (or FLEXIBLE) EXCHANGE RATE POLICY
Productivity and Balance of Payments
Exchange Rate Policies
If one country’s interest rates are high relative to other countries, that country will attract foreign funds.
Relative Price Differences and Purchasing Power Parity (PPP)
Interest Rates and Money Supply
Productivity and Balance of Payments
Investor Psychology
Exchange Rate Policies
{"name":"IBT", "url":"https://www.quiz-maker.com/QPREVIEW","txt":"Test your knowledge on the key concepts of international business and finance with this engaging quiz! Dive into topics such as foreign investment, currency valuation, and strategic alliances that shape the global market.50 carefully crafted questions.Covers a wide range of international finance topics.Perfect for students, professionals, and anyone eager to learn.","img":"https:/images/course1.png"}