Question 1

A confirmed letter of credit is guaranteed by both the exporter's bank in the country of export and the importer's bank in the country of import.

Accepted Answer

A) True 
 B)False

Question 2

Buyback is defined as ________.

Accepted Answer

A)  the export of industrial equipment in return for products produced by that equipment 
B)  an agreement that a company will offset a hard-currency sale to a nation by making a hard-currency purchase of an unspecified product from that nation in the future 
C)  the sale of goods or services to a country by a company that promises to make a future purchase of a specific product from that country 
D)  the exchange of goods or services for a certain amount of money 
A)  the export of industrial equipment in return for products produced by that equipment 
B)  an agreement that a company will offset a hard-currency sale to a nation by making a hard-currency purchase of an unspecified product from that nation in the future 
C)  the sale of goods or services to a country by a company that promises to make a future purchase of a specific product from that country 
D)  the exchange of goods or services for a certain amount of money

Question 3

Which of the following statements is true of countertrade?

Accepted Answer

A)  Countertrade is practiced by countries when there is a lack of hard currency. 
B)  Countertrade involves products whose prices on world markets tend to remain steady. 
C)  Countertrade usually involves industrial products and computer softwares. 
D)  Hedging risk in countertrade is prohibited. 
A)  Countertrade is practiced by countries when there is a lack of hard currency. 
B)  Countertrade involves products whose prices on world markets tend to remain steady. 
C)  Countertrade usually involves industrial products and computer softwares. 
D)  Hedging risk in countertrade is prohibited.

Question 4

Explain why companies consider exporting.Describe the four-step model of developing a successful export strategy.

Accepted Answer

Companies generally begin exporting for

Question 5

Which of the following is a contractual entry mode?

Accepted Answer

A)  wholly owned subsidiaries 
B)  licensing 
C)  joint ventures 
D)  exporting 
A)  wholly owned subsidiaries 
B)  licensing 
C)  joint ventures 
D)  exporting

Question 6

A ________ is a separate company created and owned by two or more independent entities to achieve a common business objective.

Accepted Answer

A)  wholly owned subsidiary 
B)  joint venture 
C)  strategic alliance 
D)  turnkey project 
A)  wholly owned subsidiary 
B)  joint venture 
C)  strategic alliance 
D)  turnkey project

Question 7

A(n)________ is guaranteed by both the exporter's bank in the country of export and the importer's bank in the country of import.

Accepted Answer

A)  confirmed letter of credit 
B)  transferrable letter of credit 
C)  revocable letter of credit 
D)  irrevocable letter of credit 
A)  confirmed letter of credit 
B)  transferrable letter of credit 
C)  revocable letter of credit 
D)  irrevocable letter of credit

Question 8

Advance payment made by an importer to an exporter normally takes the form of a sight draft.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is a method of export/import financing?

Accepted Answer

A)  offset 
B)  buyback 
C)  switch trading 
D)  documentary collection 
A)  offset 
B)  buyback 
C)  switch trading 
D)  documentary collection

Question 10

A way for firms to trade by using either a small amount of hard currency,or even none at all,is called ________.

Accepted Answer

A)  indirect exporting 
B)  countertrade 
C)  licensing 
D)  a joint venture 
A)  indirect exporting 
B)  countertrade 
C)  licensing 
D)  a joint venture

Question 11

Which of the following allows a country to earn back some of the currency it pays out for imports?

Accepted Answer

A)  switch trading 
B)  counterpurchase 
C)  buyback 
D)  barter 
A)  switch trading 
B)  counterpurchase 
C)  buyback 
D)  barter

Question 12

Scenario: Owen's HomeCare Products
Owen McCain, owner of Owen's HomeCare Products, is considering going international. He feels that the products he manufactures will be well-received, especially in developing countries. He wants to understand the exporting process and then scale his exporting activities accordingly.
-Through his research,Owen learns that the first step in developing a successful export strategy is ________.

Accepted Answer

A)  initiation of meetings with intermediaries 
B)  identification of a potential market 
C)  commitment of resources 
D)  matching of market needs to company abilities 
A)  initiation of meetings with intermediaries 
B)  identification of a potential market 
C)  commitment of resources 
D)  matching of market needs to company abilities

Question 13

Scenario: Sports Stuff Inc.
Herb Graham is vice president of Sports Stuff Inc., a business that develops, manufactures, and markets sports products. The company is looking to expand its operations into the European market. Herb believes that if the company expands its product line to include products reflecting sports that are popular in Europe, the company will achieve success there.
-The CEO of Sports Stuff has decided that the company needs to retain complete control over its operations in Europe.To achieve this objective,Herb would most likely recommend that the firm establish a ________.

Accepted Answer

A)  joint venture 
B)  cross licensing agreement 
C)  wholly owned subsidiary 
D)  strategic alliance 
A)  joint venture 
B)  cross licensing agreement 
C)  wholly owned subsidiary 
D)  strategic alliance

Question 14

What is countertrade? Explain the concept of buyback as a type of countertrade,and discuss buyback as a joint venture configuration.

Accepted Answer

Companies are sometimes unable to import

Question 15

Which of the following statements best differentiates between franchising and licensing?

Accepted Answer

A)  Licensing gives a company greater control than franchising over the sale of its product in a target market. 
B)  Franchising is common in manufacturing industries while licensing is primarily used in service industries. 
C)  Franchising requires ongoing assistance from the franchiser while licensing normally involves a one-time transfer of property. 
D)  Licensees must often meet strict guidelines on product quality, day-to-day management duties, and marketing promotions unlike franchisees. 
A)  Licensing gives a company greater control than franchising over the sale of its product in a target market. 
B)  Franchising is common in manufacturing industries while licensing is primarily used in service industries. 
C)  Franchising requires ongoing assistance from the franchiser while licensing normally involves a one-time transfer of property. 
D)  Licensees must often meet strict guidelines on product quality, day-to-day management duties, and marketing promotions unlike franchisees.

Question 16

Scenario: Sports Stuff Inc.
Herb Graham is vice president of Sports Stuff Inc., a business that develops, manufactures, and markets sports products. The company is looking to expand its operations into the European market. Herb believes that if the company expands its product line to include products reflecting sports that are popular in Europe, the company will achieve success there.
-Herb has been exploring another type of entry mode that requires ongoing assistance on the part of one firm,often in the form of start-up capital,management training,or location advice.Herb is most likely considering ________.

Accepted Answer

A)  a strategic alliance 
B)  franchising 
C)  licensing 
D)  a joint venture 
A)  a strategic alliance 
B)  franchising 
C)  licensing 
D)  a joint venture

Question 17

________ refers to any one of several different arrangements that business parties negotiate so that they can trade goods for good,primarily with countries that have limited amounts of foreign exchange.

Accepted Answer

A)  Factoring 
B)  Offset 
C)  Countertrade 
D)  Barter 
A)  Factoring 
B)  Offset 
C)  Countertrade 
D)  Barter

Question 18

Which of the following steps of the strategy development process for exports involves establishing relationships with potential local distributors?

Accepted Answer

A)  identification of a potential market 
B)  match market needs to the company's abilities 
C)  initiation of meetings 
D)  commitment of resources 
A)  identification of a potential market 
B)  match market needs to the company's abilities 
C)  initiation of meetings 
D)  commitment of resources

Question 19

Which of the following is an advantage of wholly owned subsidiaries?

Accepted Answer

A)  The parent company receives all profits generated by the subsidiary. 
B)  They are the least expensive investment entry modes. 
C)  They help in the sharing of the cost of an international investment project. 
D)  They are the least risky when compared to other investment entry modes. 
A)  The parent company receives all profits generated by the subsidiary. 
B)  They are the least expensive investment entry modes. 
C)  They help in the sharing of the cost of an international investment project. 
D)  They are the least risky when compared to other investment entry modes.

Question 20

Products for which there are fewer substitutes can more easily absorb higher shipping and production costs.

Accepted Answer

A) True 
 B)False

A confirmed letter of credit is guaranteed by both the exporter's bank in the country of export and the importer's bank in the country of import.

Buyback is defined as ________.

Which of the following statements is true of countertrade?

Explain why companies consider exporting.Describe the four-step model of developing a successful export strategy.

Which of the following is a contractual entry mode?

A ________ is a separate company created and owned by two or more independent entities to achieve a common business objective.

A(n)________ is guaranteed by both the exporter's bank in the country of export and the importer's bank in the country of import.

Advance payment made by an importer to an exporter normally takes the form of a sight draft.

Which of the following is a method of export/import financing?

A way for firms to trade by using either a small amount of hard currency,or even none at all,is called ________.

Which of the following allows a country to earn back some of the currency it pays out for imports?

What is countertrade? Explain the concept of buyback as a type of countertrade,and discuss buyback as a joint venture configuration.

Which of the following statements best differentiates between franchising and licensing?

________ refers to any one of several different arrangements that business parties negotiate so that they can trade goods for good,primarily with countries that have limited amounts of foreign exchange.

Which of the following steps of the strategy development process for exports involves establishing relationships with potential local distributors?

Which of the following is an advantage of wholly owned subsidiaries?

Products for which there are fewer substitutes can more easily absorb higher shipping and production costs.

Globalization

Cross-Cultural Business

Political Economy and Ethics

Economic Development of Nations

International Trade Theory

Political Economy of Trade

Foreign Direct Investment

Regional Economic Integration

International Financial Markets

International Monetary System

International Strategy and Organization

Analyzing International Opportunities

Developing and Marketing Products

Managing International Operations

Hiring and Managing Employees

Filters

Exam 13: Selecting and Managing Entry Modes

A confirmed letter of credit is guaranteed by both the exporter's bank in the country of export and the importer's bank in the country of import.

Buyback is defined as ________.

Which of the following statements is true of countertrade?

Explain why companies consider exporting.Describe the four-step model of developing a successful export strategy.

Which of the following is a contractual entry mode?

A ________ is a separate company created and owned by two or more independent entities to achieve a common business objective.

A(n)________ is guaranteed by both the exporter's bank in the country of export and the importer's bank in the country of import.

Advance payment made by an importer to an exporter normally takes the form of a sight draft.

Which of the following is a method of export/import financing?

A way for firms to trade by using either a small amount of hard currency,or even none at all,is called ________.

Which of the following allows a country to earn back some of the currency it pays out for imports?

What is countertrade? Explain the concept of buyback as a type of countertrade,and discuss buyback as a joint venture configuration.

Which of the following statements best differentiates between franchising and licensing?

________ refers to any one of several different arrangements that business parties negotiate so that they can trade goods for good,primarily with countries that have limited amounts of foreign exchange.

Which of the following steps of the strategy development process for exports involves establishing relationships with potential local distributors?

Which of the following is an advantage of wholly owned subsidiaries?

Products for which there are fewer substitutes can more easily absorb higher shipping and production costs.

Globalization

Cross-Cultural Business

Political Economy and Ethics

Economic Development of Nations

International Trade Theory

Political Economy of Trade

Foreign Direct Investment

Regional Economic Integration

International Financial Markets

International Monetary System

International Strategy and Organization

Analyzing International Opportunities

Developing and Marketing Products

Managing International Operations

Hiring and Managing Employees

Filters