Intl 220 Quiz 8

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Centennial College *

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220

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Economics

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Feb 20, 2024

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Question 1 (1 point) Saved Listen Which of the following financing methods entails the lowest risk for exporters? Question 1 options: 1) supersedeas bond 2) advance payment 3) letter of credit 4) open account Question 2 (1 point) Saved Listen Which of the following is an investment entry mode? Question 2 options: 1) licensing 2) franchising 3) joint venture 4) turnkey project Question 3 (1 point) Saved Listen 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?

Question 3 options: 1) revocable letter of credit 2) confirmed letter of credit 3) at sight letter of credit 4) irrevocable letter of credit Question 4 (1 point) Saved Listen 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. Gro-Tru would be engaging in ________, if it decides that in exchange for a hard-currency sale it would make a hard- currency purchase of an unspecified product from the importing nation in the future. Question 4 options: 1) barter 2) offset 3) switch trading 4) buyback

Question 5 (1 point) Saved Listen 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 ________. Question 5 options: 1) initiation of meetings with intermediaries 2) identification of a potential market 3) commitment of resources 4) matching of market needs to company abilities Question 6 (1 point) Saved Listen Which of the following types of joint ventures involve parties investing together in downstream business activities? Question 6 options: 1) backward integration 2) forward integration

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3) multistage 4) buyback Question 7 (1 point) Saved Listen Which of the following statements is true of countertrade? Question 7 options: 1) Countertrade is practiced by countries when there is a lack of hard currency. 2) Countertrade involves products whose prices on world markets tend to remain steady. 3) Countertrade usually involves industrial products and computer softwares. 4) Hedging risk in countertrade is prohibited. Question 8 (1 point) Saved Listen Which of the following is an advantage of exporting? Question 8 options: 1) vulnerability to tariffs 2) logistical complexities 3) potential conflicts with distributors 4) access to new markets Question 9 (1 point) Saved Listen

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 knows that much of the success his company enjoys is due to the patents and copyrights that protect the company's products. If Sports Stuff chooses an entry mode in which it grants another firm the right to use its intangible property for a specified period of time, it would be engaging in ________. Question 9 options: 1) a turnkey project 2) franchising 3) licensing 4) a joint venture Question 10 (1 point) Saved Listen Which of the following steps of the strategy development process for exports involves establishing relationships with potential local distributors? Question 10 options: 1) identification of a potential market 2) match market needs to the company's abilities 3) initiation of meetings

4) commitment of resources Question 11 (1 point) Saved Listen Which of the following steps of the strategy development process for exports involves performing market research and interpreting results obtained from the research? Question 11 options: 1) identification of a potential market 2) match needs of the market to the company's abilities 3) initiation of meetings 4) commitment of resources Question 12 (1 point) Saved Listen 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

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achieve this objective, Herb would most likely recommend that the firm establish a ________. Question 12 options: 1) joint venture 2) cross licensing agreement 3) wholly owned subsidiary 4) strategic alliance Question 13 (1 point) Saved Listen Scenario: Wang's Techno Toys Ann Wang has been successfully running Wang's Techno Toys that sells high-tech toys in the domestic market. Continually increasing and stiff competition at home has now forced Wang's Techno Toys to enter international markets through direct exports. In some countries, people exchange electronic goods for Techno Toys instead of paying money for them. This practice is known as ________. Question 13 options: 1) offset 2) counterpurchase 3) switch trading 4) barter Question 14 (1 point)

Saved Listen 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. In his research, Alistair discovers a type of arrangement in which industrial equipment is exported in return for products produced by that equipment. This arrangement is known as ________. Question 14 options: 1) barter 2) offset 3) switch trading 4) buyback Question 15 (1 point) Saved Listen ________ take ownership of the merchandise when it enters their country and accept all the risks associated with generating local sales. Question 15 options: 1) Agents

2) Distributors 3) Sales representatives 4) Freight forwarders Question 16 (1 point) Saved Listen Martin Exporting requests ABC Bank to add its own guarantee of payment to a letter of credit, which creates a(n) ________. Question 16 options: 1) advised letter of credit 2) confirmed letter of credit 3) irrevocable letter of credit 4) unconfirmed letter of credit Question 17 (1 point) Saved Listen Which of the following is a contractual entry mode in which one company supplies another with intangible property and other assistance over an extended period? Question 17 options: 1) franchising 2) management contract 3) licensing 4) strategic alliance

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Question 18 (1 point) Saved Listen An offset agreement differs from a counterpurchase agreement in that an offset agreement ________. Question 18 options: 1) fails to specify the type of product that must be purchased 2) fails to specify the amount that will be spent on the purchase 3) fails to give a business greater freedom in fulfilling its end of a countertrade deal 4) fails to make a hard-currency purchase of any product from that nation in the future Question 19 (1 point) Saved Listen What is the first step in selecting a foreign market? Question 19 options: 1) identification of potential market 2) monitoring major markets 3) evaluating host country's trade policies 4) assessing general legal and political environments Question 20 (1 point) Saved Listen Which of the following statements best differentiates between franchising and licensing? Question 20 options:

1) Licensing gives a company greater control than franchising over the sale of its product in a target market. 2) Franchising is common in manufacturing industries while licensing is primarily used in service industries. 3) Franchising requires ongoing assistance from the franchiser while licensing normally involves a one- time transfer of property. 4) Licensees must often meet strict guidelines on product quality, day-to-day management duties, and marketing promotions unlike franchisees.

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