Question 1

Advance payment is the least favorable method of payment collection for exporters.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following letters of credit can be modified without obtaining approval from either the exporter or the importer,by the bank issuing the letter of credit?

Accepted Answer

A) revocable letter of credit 
B) confirmed letter of credit 
C) at sight letter of credit 
D) usance letter of credit 
A) revocable letter of credit 
B) confirmed letter of credit 
C) at sight letter of credit 
D) usance letter of credit

Question 3

________ is a payment method commonly used when there is an ongoing relationship between the involved parties.

Accepted Answer

A) Advance payment 
B) Documentary collection 
C) Letter of credit 
D) Open account 
A) Advance payment 
B) Documentary collection 
C) Letter of credit 
D) Open account

Question 4

Which of the following financing methods entails the greatest risk for importers?

Accepted Answer

A) documentary collection 
B) advance payment 
C) letter of credit 
D) open account 
A) documentary collection 
B) advance payment 
C) letter of credit 
D) open account

Question 5

Which of the following is a disadvantage of strategic alliances?

Accepted Answer

A) They are the most expensive among the investment entry modes. 
B) They increase the likelihood that one partner will try to take advantage of the other. 
C) They create future competitors. 
D) They fail to tap into their competitors' specific strengths. 
A) They are the most expensive among the investment entry modes. 
B) They increase the likelihood that one partner will try to take advantage of the other. 
C) They create future competitors. 
D) They fail to tap into their competitors' specific strengths.

Question 6

The sale of goods and services to a country by a company that promises to buy a specific product from that country in the future is called a(n)________.

Accepted Answer

A) counterpurchase 
B) offset 
C) joint venture 
D) barter 
A) counterpurchase 
B) offset 
C) joint venture 
D) barter

Question 7

Advance payment is commonly used for export/import financing when ________.

Accepted Answer

A) two parties are unfamiliar with each other 
B) the buyer has obtained credit for the transaction 
C) the transaction is for a relatively high amount 
D) the buyer has good credit rating at banks 
A) two parties are unfamiliar with each other 
B) the buyer has obtained credit for the transaction 
C) the transaction is for a relatively high amount 
D) the buyer has good credit rating at banks

Question 8

Franchising is primarily used in the manufacturing industries.

Accepted Answer

A) True 
 B)False

Question 9

Scenario: Gro-Tru Grows To Europe
Gro-Tru,a maker of chemical fertilizers and pesticides,sees enormous growth potential in Central Europe.The company has received several inquiries from potential importers in the region,but in most cases,the potential importers have expressed difficulty in obtaining the hard currency to pay for Gro-Tru's products.Alistair Green,vice-president for business development,is exploring how Gro-Tru can meet the needs of the potential market.
-Alistair has identified an option that might help the firm deal with the importer's inability to pay with hard currency.The option involves selling goods or services that are paid for in whole or part with other goods or services.Which of the following methods is Alistair considering?

Accepted Answer

A) auction 
B) bidding 
C) countertrade 
D) tendering 
A) auction 
B) bidding 
C) countertrade 
D) tendering

Question 10

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 11

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 12

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 13

Which of the following requires an importer to pay for the imported goods when they are delivered?

Accepted Answer

A) sight draft 
B) inland bill of lading 
C) air way bill of lading 
D) time draft 
A) sight draft 
B) inland bill of lading 
C) air way bill of lading 
D) time draft

Question 14

Companies can achieve economies of scale by expanding into international markets.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

Companies generally begin exporting for

Question 16

Countertrade is not an option for smaller companies because of the cash outlays involved.

Accepted Answer

A) True 
 B)False

Question 17

Discuss the advantages of licensing,low-cost production,and low-cost shipping for international companies.

Accepted Answer

There are several advantages to using li

Question 18

Which of the following occurs when a company sells its products to intermediaries who then resell to buyers in a target market?

Accepted Answer

A) indirect exporting 
B) counterpurchase 
C) an acquisition 
D) a joint venture 
A) indirect exporting 
B) counterpurchase 
C) an acquisition 
D) a joint venture

Question 19

Which of the following normally takes the form of a wire transfer of money from the bank account of the importer directly to that of the exporter prior to shipment of merchandise?

Accepted Answer

A) documentary collection 
B) letter of credit 
C) advance payment 
D) open account 
A) documentary collection 
B) letter of credit 
C) advance payment 
D) open account

Question 20

Which of the following is a strategic factor that influences a company's international entry mode selection?

Accepted Answer

A) market consumption capacity 
B) market receptivity 
C) market size 
D) market intensity 
A) market consumption capacity 
B) market receptivity 
C) market size 
D) market intensity

Advance payment is the least favorable method of payment collection for exporters.

Which of the following letters of credit can be modified without obtaining approval from either the exporter or the importer,by the bank issuing the letter of credit?

________ is a payment method commonly used when there is an ongoing relationship between the involved parties.

Which of the following financing methods entails the greatest risk for importers?

Which of the following is a disadvantage of strategic alliances?

The sale of goods and services to a country by a company that promises to buy a specific product from that country in the future is called a(n)________.

Advance payment is commonly used for export/import financing when ________.

Franchising is primarily used in the manufacturing industries.

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

Which of the following statements is true of countertrade?

Which of the following requires an importer to pay for the imported goods when they are delivered?

Companies can achieve economies of scale by expanding into international markets.

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

Countertrade is not an option for smaller companies because of the cash outlays involved.

Discuss the advantages of licensing,low-cost production,and low-cost shipping for international companies.

Which of the following occurs when a company sells its products to intermediaries who then resell to buyers in a target market?

Which of the following normally takes the form of a wire transfer of money from the bank account of the importer directly to that of the exporter prior to shipment of merchandise?

Which of the following is a strategic factor that influences a company's international entry mode selection?

Globalization

Cross-Cultural Business

Politics,Law,and Business Ethics

Economics and Emerging Markets

International Trade

Business-Government Trade Relations

Foreign Direct Investment

Regional Economic Integration

International Financial Markets

International Money 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

Advance payment is the least favorable method of payment collection for exporters.

Which of the following letters of credit can be modified without obtaining approval from either the exporter or the importer,by the bank issuing the letter of credit?

________ is a payment method commonly used when there is an ongoing relationship between the involved parties.

Which of the following financing methods entails the greatest risk for importers?

Which of the following is a disadvantage of strategic alliances?

The sale of goods and services to a country by a company that promises to buy a specific product from that country in the future is called a(n)________.

Advance payment is commonly used for export/import financing when ________.

Franchising is primarily used in the manufacturing industries.

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

Which of the following statements is true of countertrade?

Which of the following requires an importer to pay for the imported goods when they are delivered?

Companies can achieve economies of scale by expanding into international markets.

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

Countertrade is not an option for smaller companies because of the cash outlays involved.

Discuss the advantages of licensing,low-cost production,and low-cost shipping for international companies.

Which of the following occurs when a company sells its products to intermediaries who then resell to buyers in a target market?

Which of the following normally takes the form of a wire transfer of money from the bank account of the importer directly to that of the exporter prior to shipment of merchandise?

Which of the following is a strategic factor that influences a company's international entry mode selection?

Globalization

Cross-Cultural Business

Politics,Law,and Business Ethics

Economics and Emerging Markets

International Trade

Business-Government Trade Relations

Foreign Direct Investment

Regional Economic Integration

International Financial Markets

International Money System

International Strategy and Organization

Analyzing International Opportunities

Developing and Marketing Products

Managing International Operations

Hiring and Managing Employees

Filters