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The rapid globalization of capital markets enables individuals and institutions based in one nation to invest in corporations based elsewhere with...

1. The rapid globalization of capital markets enables individuals and institutions based in one nation to invest in corporations based elsewhere with relative ease.
a. True
b. False
2. Systematic risk refers to movements in a stock portfolio's value that are attributable to macroeconomic forces affecting all firms in an economy, rather than factors specific to an individual firm.
a. True
b. False
3. Market makers are:
a. Financial service companies that connect investors and borrowers.
b. Those who want to borrow money including individuals, companies and governments.
c. Nonbank financial institutions who want to invest money.
d. High net worth individuals with surplus cash to invest.
4. An equity loan
a. Is a share of stock that does not give the holder a claim to a firm's profit stream.
b. Is made when a corporation sells stock to investors.
c. Includes cash loans from banks and funds raised from the sale of corporate bonds.
d. Requires the corporation to repay a predetermined portion of the loan amount at regular intervals regardless of how much profit it is making.
5. A company's political economy and culture are independent of each other.
a. True
b. False
6. In a market economy if demand for a product exceeds supply, prices will rise, signaling to producers to produce more.
a. True
b. False
7. The activity that controls the transmission of physical materials through the value chain, from procurement through production and into distribution is known as logistics.
a. True
b. False
8. The major cost savings associated with JIT comes from
a. Speeding up inventory turnover.
b. Having materials arrive at a manufacturing plant before they are needed.
c. Avoiding production slowdowns by ensuring inventory is stockpiled.
d. Using warehouse space to maintain on-hand inventory.
9. An advantage of buying component parts or even an entire product, from independent suppliers is that
a. The firm can maintain its flexibility of switching orders between suppliers as circumstances dictate.
b. It can make planning, coordination and scheduling of adjacent processes easier for the firm.
c. It reduces the risk for the firm that suppliers will expropriate the technology for their own use.
d. The firm is able to maintain firm control over its proprietary technology.
10. Identify the theory that can be interpreted as justifying some limited government intervention to support the development of certain export-oriented industries.
a. Theory of national competitive advantage.
b. Heckscher-Ohlin theory
c. Theory of comparative advantage.
d. Theory of absolute advantage.
11. The exchange rate is the rate at which a dealer converts currency on a particular day.
a. Forward
b. Backward
c. Spot
d. Speculative
12. Which of the following is a type of foreign exchange risk?
a. Political exposure
b. Translation exposure
c. Transfer exposure
d. Investment exposure
13. The world Bank was created in 1944 primarily to
a. Enhance economic development through grants-exclusively in Latin America.
b. Enhance economic development through subsidized loans.
c. Enhance socioeconomic development through low interest rate loans.
d. Promote bilateral and multilateral financing of global business operations.
14. The effect of a tariff is to lower the cost of imported goods.
a. True
b. False
15. Which of the following would cause you to consider an exit strategy?
a. Reduction of labor costs.
b. Increasing sales.
c. Political coup.
d. Increased training costs.
16. Which organizational strategy best supports horizontal differentiation?
a. Functional
b. Hybrid
c. Informal matrix
d. Worldwide product division
17. Customizing a product offering, marketing strategy, and business strategy to various national conditions is an example of
a. A global strategy.
b. A transnational strategy.
c. An international strategy.
d. A multidomestic strategy.
18. Which of the following is not an advantage of a transnational strategy?
a. Organizations can implement a transnational strategy easily.
b. Organizations can exploit experience curve effects.
c. Organizations can exploit location economics.
d. Organizations can customize product offerings and marketing strategy in accordance with local responsiveness.
19. A staffing policy seeks the best person for key jobs throughout the multinational organization, regardless of their nationality.
a. Multicentric
b. Polycentric
c. Expatriate
d. Geocentric
20.            A weak dollar is normally expected to cause
a. High unemployment and high inflation in the United States.
b. High unemployment and low inflation in the United States.
c. Low unemployment and low inflation in the United States.
d. Low unemployment and high inflation in the United States.

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