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Finance
Q:
Money markets have a greater variety of investors than borrowers.
Q:
Competition among financial intermediaries tends to force interest rates downward.
Q:
Private placements are the simplest form of direct finance.
Q:
The money market provides short-term liquidity; the capital market finances long-term corporate growth.
Q:
The New York Stock Exchange is an example of an organized exchange.
Q:
Primary markets offer liquidity and ways for investors to alter the risk of their portfolios.
Q:
Secondary markets are important because they provide funds directly to deficit spending units (DSUs).
Q:
Households are the major source of funds to the financial system.
Q:
Mortgages are capital market debt securities.
Q:
"Futures contract" and "forward contract" are interchangeable terms.
Q:
Commercial banks lend to businesses in direct financial markets.
Q:
Deficit spending units (DSUs) and surplus spending units (SSUs) always have some contact with each other in financial markets.
Q:
Financial claims or securities are written for the mutual benefit of both SSU and DSU.
Q:
A surplus spending units surplus spending unit (SSU) must hold a claim until its scheduled maturity.
Q:
A household is a surplus spending units when income for the period exceeds spending.
Q:
Depository intermediaries issue claims that are for the most part highly liquid.
Q:
Without a financial sector, real investment must be financed internally by the deficit spending unit.
Q:
Every financial claim appears on two balance sheets.
Q:
There must be an equal number of DSUs and surplus spending units ( SSUs) in a period.
Q:
Direct finance requires a more or less exact match of preferences.
Q:
Liabilities of financial intermediaries are indirect financial claims.
Q:
Finance companies take small consumer deposits and make large consumer loans.
Q:
Assets of financial intermediaries include direct financial claims only.
Q:
When a surplus spending units (SSU) owns a financial claim created by financial intermediation, its residual claim is against a deficit spending units (DSU).
Q:
Deposits in a credit union by a household are an example of direct finance.
Q:
Investment bankers help deficit spending units (DSUs) bring new primary security issues to market.
Q:
A financial claim is an "IOU" from a deficit spending unit.
Q:
Businesses are never deficit spending units (DSUs).
Q:
The purpose of the financial system is to bring savers and borrowers together.
Q:
The incentive to securitize a portfolio of loans isa. the profit from the loan revenue.b. the profit from the interest on the asset-backed securities issued.c. the profit from the fees paid for financial guarantees.d. the profit from the difference between the loan revenue and the costs of guarantees and return on the asset-backed securities.
Q:
List the five basic factors which explain the differences in interest rates on different securities at any point in time.
Q:
Yield differences between two securities may be explained by differences ina. maturity.b. default risk.c. marketability.d. call provision.e. all of the above
Q:
Describe the relationship between international strategy and other corporate strategies.
Q:
Agrestal Cosmetics, Inc. is a leading U.S. manufacturer of natural, herb-based cosmetic products. It started out purely as a domestic company but in 1983 established operations in India primarily to gain access to that country's abundant supply of hibiscus, a plant that provided important raw materials to the company's products. In 2009, Agrestal did business in 29 countries around the world. It has factories in Malaysia and Taiwan to use the low labor cost in those countries in making its labor-intensive products. In the late 1990s, it had to close it operations in a foreign country when, due to a change in the country's leadership, all foreign companies had to cease doing business there. During the Brazilian financial crisis, Agrestal adopted the practice of using revenues generated in Brazil to buy orange concentrate locally and sell that concentrate in the United States. Agrestal's corporate finance department aggressively uses hedging in all the countries where it operates. In a few select countries, Agrestal licenses its brand names and know-how to local licensees. Currently, Agrestal is organized whereby all strategic and operational decisions are made at its Princeton, New Jersey headquarters.
To optimize both local responsiveness and international integration, Agrestal has to move to a ________ structure.
A) matrix
B) transnational
C) operational
D) coordinated federation
Q:
Agrestal Cosmetics, Inc. is a leading U.S. manufacturer of natural, herb-based cosmetic products. It started out purely as a domestic company but in 1983 established operations in India primarily to gain access to that country's abundant supply of hibiscus, a plant that provided important raw materials to the company's products. In 2009, Agrestal did business in 29 countries around the world. It has factories in Malaysia and Taiwan to use the low labor cost in those countries in making its labor-intensive products. In the late 1990s, it had to close it operations in a foreign country when, due to a change in the country's leadership, all foreign companies had to cease doing business there. During the Brazilian financial crisis, Agrestal adopted the practice of using revenues generated in Brazil to buy orange concentrate locally and sell that concentrate in the United States. Agrestal's corporate finance department aggressively uses hedging in all the countries where it operates. In a few select countries, Agrestal licenses its brand names and know-how to local licensees. Currently, Agrestal is organized whereby all strategic and operational decisions are made at its Princeton, New Jersey headquarters.
From its organization structure, it appears that Agrestal is attempting to maximize ________ in its operations.
A) local responsiveness
B) strategic coordination
C) operational coordination
D) international integration
Q:
Agrestal Cosmetics, Inc. is a leading U.S. manufacturer of natural, herb-based cosmetic products. It started out purely as a domestic company but in 1983 established operations in India primarily to gain access to that country's abundant supply of hibiscus, a plant that provided important raw materials to the company's products. In 2009, Agrestal did business in 29 countries around the world. It has factories in Malaysia and Taiwan to use the low labor cost in those countries in making its labor-intensive products. In the late 1990s, it had to close it operations in a foreign country when, due to a change in the country's leadership, all foreign companies had to cease doing business there. During the Brazilian financial crisis, Agrestal adopted the practice of using revenues generated in Brazil to buy orange concentrate locally and sell that concentrate in the United States. Agrestal's corporate finance department aggressively uses hedging in all the countries where it operates. In a few select countries, Agrestal licenses its brand names and know-how to local licensees. Currently, Agrestal is organized whereby all strategic and operational decisions are made at its Princeton, New Jersey headquarters.
Agrestal's organizational structure is most likely the ________ structure.
A) centralized hub
B) transnational
C) decentralized federation
D) coordinated federation
Q:
Agrestal Cosmetics, Inc. is a leading U.S. manufacturer of natural, herb-based cosmetic products. It started out purely as a domestic company but in 1983 established operations in India primarily to gain access to that country's abundant supply of hibiscus, a plant that provided important raw materials to the company's products. In 2009, Agrestal did business in 29 countries around the world. It has factories in Malaysia and Taiwan to use the low labor cost in those countries in making its labor-intensive products. In the late 1990s, it had to close it operations in a foreign country when, due to a change in the country's leadership, all foreign companies had to cease doing business there. During the Brazilian financial crisis, Agrestal adopted the practice of using revenues generated in Brazil to buy orange concentrate locally and sell that concentrate in the United States. Agrestal's corporate finance department aggressively uses hedging in all the countries where it operates. In a few select countries, Agrestal licenses its brand names and know-how to local licensees. Currently, Agrestal is organized whereby all strategic and operational decisions are made at its Princeton, New Jersey headquarters.
Agrestal's use of hedging is a way for the company to guard against ________ risks.
A) political
B) market
C) business
D) financial
Q:
Agrestal Cosmetics, Inc. is a leading U.S. manufacturer of natural, herb-based cosmetic products. It started out purely as a domestic company but in 1983 established operations in India primarily to gain access to that country's abundant supply of hibiscus, a plant that provided important raw materials to the company's products. In 2009, Agrestal did business in 29 countries around the world. It has factories in Malaysia and Taiwan to use the low labor cost in those countries in making its labor-intensive products. In the late 1990s, it had to close it operations in a foreign country when, due to a change in the country's leadership, all foreign companies had to cease doing business there. During the Brazilian financial crisis, Agrestal adopted the practice of using revenues generated in Brazil to buy orange concentrate locally and sell that concentrate in the United States. Agrestal's corporate finance department aggressively uses hedging in all the countries where it operates. In a few select countries, Agrestal licenses its brand names and know-how to local licensees. Currently, Agrestal is organized whereby all strategic and operational decisions are made at its Princeton, New Jersey headquarters.
What Agrestal did in Brazil was an example of
A) hedging.
B) countertrade.
C) diversification.
D) strategizing.
Q:
Agrestal Cosmetics, Inc. is a leading U.S. manufacturer of natural, herb-based cosmetic products. It started out purely as a domestic company but in 1983 established operations in India primarily to gain access to that country's abundant supply of hibiscus, a plant that provided important raw materials to the company's products. In 2009, Agrestal did business in 29 countries around the world. It has factories in Malaysia and Taiwan to use the low labor cost in those countries in making its labor-intensive products. In the late 1990s, it had to close it operations in a foreign country when, due to a change in the country's leadership, all foreign companies had to cease doing business there. During the Brazilian financial crisis, Agrestal adopted the practice of using revenues generated in Brazil to buy orange concentrate locally and sell that concentrate in the United States. Agrestal's corporate finance department aggressively uses hedging in all the countries where it operates. In a few select countries, Agrestal licenses its brand names and know-how to local licensees. Currently, Agrestal is organized whereby all strategic and operational decisions are made at its Princeton, New Jersey headquarters.
When Agrestal (along with other companies) was asked to leave a foreign country in the 1990s, it was a victim of
A) corporate risk.
B) cultural risk.
C) political risk.
D) financial risk.
Q:
Agrestal Cosmetics, Inc. is a leading U.S. manufacturer of natural, herb-based cosmetic products. It started out purely as a domestic company but in 1983 established operations in India primarily to gain access to that country's abundant supply of hibiscus, a plant that provided important raw materials to the company's products. In 2009, Agrestal did business in 29 countries around the world. It has factories in Malaysia and Taiwan to use the low labor cost in those countries in making its labor-intensive products. In the late 1990s, it had to close it operations in a foreign country when, due to a change in the country's leadership, all foreign companies had to cease doing business there. During the Brazilian financial crisis, Agrestal adopted the practice of using revenues generated in Brazil to buy orange concentrate locally and sell that concentrate in the United States. Agrestal's corporate finance department aggressively uses hedging in all the countries where it operates. In a few select countries, Agrestal licenses its brand names and know-how to local licensees. Currently, Agrestal is organized whereby all strategic and operational decisions are made at its Princeton, New Jersey headquarters.
Agrestal's use of licensing in certain countries is an example of ________ governance organizing option.
A) market
B) corporate
C) hierarchical
D) intermediate market
Q:
Agrestal Cosmetics, Inc. is a leading U.S. manufacturer of natural, herb-based cosmetic products. It started out purely as a domestic company but in 1983 established operations in India primarily to gain access to that country's abundant supply of hibiscus, a plant that provided important raw materials to the company's products. In 2009, Agrestal did business in 29 countries around the world. It has factories in Malaysia and Taiwan to use the low labor cost in those countries in making its labor-intensive products. In the late 1990s, it had to close it operations in a foreign country when, due to a change in the country's leadership, all foreign companies had to cease doing business there. During the Brazilian financial crisis, Agrestal adopted the practice of using revenues generated in Brazil to buy orange concentrate locally and sell that concentrate in the United States. Agrestal's corporate finance department aggressively uses hedging in all the countries where it operates. In a few select countries, Agrestal licenses its brand names and know-how to local licensees. Currently, Agrestal is organized whereby all strategic and operational decisions are made at its Princeton, New Jersey headquarters.
An important economy of scope for Agrestal in pursuing international opportunities is
A) technology.
B) access to raw materials.
C) organizational learning.
D) synergy.
Q:
There are relatively few examples of pure ________ in today's economy.
A) decentralized federations
B) transnational structures
C) centralized hubs
D) coordinated federations
Q:
Firms pursuing an international strategy have ________ basic organizational structural alternatives.
A) 3
B) 5
C) 4
D) 2
Q:
In a ________ structure, operational decisions are delegated to division general managers/country presidents, but broader strategic decisions are made at corporate headquarters.
A) transnational
B) centralized hub
C) coordinated federation
D) decentralized federation
Q:
In a ________ structure, corporate staff functions are generally limited to the collection of accounting and other performance information from divisions/country companies and to reporting this aggregate information to appropriate government officials and to the financial markets.
A) transnational
B) decentralized federation
C) centralized hub
D) coordinated federation
Q:
General Electric (GE) uses a ________ structure to manage its global operations.
A) transnational
B) centralized hub
C) decentralized federation
D) coordinated federation
Q:
Toyota is an example of a firm that uses the ________ structure.
A) centralized hub
B) transnational
C) decentralized federation
D) coordinated federation
Q:
Firms that have been successful in adopting the transnational structure include
A) Sony.
B) Disney.
C) Ford.
D) Nokia.
Q:
Firms that attempt to optimize both local responsiveness and international integration will choose a ________ organizational structure.
A) centralized hub
B) transnational
C) coordinated federation
D) decentralized federation
Q:
Firms that seek to balance the need for local responsiveness and international integration will typically choose ________.
A) centralized federations
B) transnational structures
C) decentralized federations
D) matrix structures
Q:
Firms that seek to maximize international integration in their operations will typically opt for ________ structures.
A) transnational
B) decentralized federation
C) coordinated federation
D) centralized hub
Q:
Firms that seek to maximize their local responsiveness will tend to choose a ________ structure
A) transnational
B) centralized hub
C) decentralized federation
D) coordinated federation
Q:
The role of corporate headquarters in a ________ is to constantly scan business operations across different countries for resources and capabilities that might be a source of competitive advantage for other divisions/country companies in the firm.
A) centralized hub
B) coordinated federation
C) decentralized federation
D) transnational structure
Q:
In a coordinated federation structure, shared activities and other cross-divisional/cross-country economies of scope are managed by the
A) country unit.
B) corporate center.
C) local unit.
D) country manager.
Q:
In many ways, the transnational structure is similar to the
A) coordinated federation.
B) centralized hub.
C) decentralized federation.
D) decentralized hub.
Q:
Which one of the following structural options combines a high level of both global integration and local responsiveness?
A) centralized hub
B) decentralized hub
C) transnational structure
D) coordinated federation
Q:
Which one of the following is not a structural option for firms pursuing international strategies?
A) corporate federation
B) decentralized federation
C) transnational structure
D) centralized hub
Q:
In a ________, strategic and operational decisions are delegated to divisions/country companies.
A) transnational structure
B) decentralized federation
C) coordinated federation
D) centralized hub
Q:
Strategic alliances fall within the ________ governance option for firms pursuing international strategies.
A) corporate
B) market
C) intermediate market
D) hierarchical
Q:
Acquisitions are an example of the ________ governance option for firms pursuing international strategies.
A) market
B) hierarchical
C) corporate
D) intermediate market
Q:
Which one of the following is an example of the hierarchical governance option for firms pursuing international strategies?
A) mergers
B) exporting
C) licensing
D) joint ventures
Q:
Exporting is a form of
A) intermediate market governance.
B) hierarchical governance.
C) vertical governance.
D) market governance.
Q:
A firm implements a(n) ________ strategy when it diversifies its business operations across country boundaries.
A) functional
B) operational
C) international
D) transnational
Q:
Even if direct duplication of a firm's international strategies is ________, ________ might still exist that limit the ability of that strategy to generate sustained competitive advantages.
A) costly; substitutes
B) inexpensive; substitutes
C) costly; fragmentation
D) inexpensive; fragmentation
Q:
One survey indicated that the foreign experience of ________ percent of U.S. CEOs was limited to vacation travel.
A) 14
B) 56
C) 48
D) 61
Q:
The ability to develop detailed local knowledge of nondomestic markets may require firms to have management teams with a great deal of ________ experience.
A) foreign
B) technical
C) corporate
D) functional
Q:
One survey of CEOs from around the world reported that ________ percent of U.S. CEOs had no foreign experience.
A) 2
B) 14
C) 34
D) 64
Q:
Improvements in the ________ infrastructure of business are one of the important contributors to the growth in the number of firms pursuing international strategies.
A) pecuniary
B) cultural
C) technological
D) corporate
Q:
Broad changes in the political situation in a foreign country is an example of political risk that affects the international strategies at the ________ level.
A) macro
B) micro
C) functional
D) cultural
Q:
Hedging is a way to counter the ________ risks of doing business in foreign markets.
A) political
B) financial
C) cultural
D) business
Q:
A ________ strategy exploits all the advantages of both international integration and local responsiveness.
A) corporate
B) multinational
C) transnational
D) global
Q:
________ can help firms be successful in addressing the local needs of nondomestic customers, thereby increasing demand for a firm's current products or services.
A) Globalization
B) Internationalization
C) Target responsiveness
D) Local responsiveness
Q:
________ requires a firm to modify or abandon traditional ways of engaging in business.
A) Unlearning
B) Learning
C) Relearning
D) Absorbing
Q:
Which one of the following is not a determinant of the ability of a firm to learn from its international operations?
A) the intent to learn
B) the transparency of business partners
C) receptivity to learning
D) the resources for learning
Q:
The second stage in the product life cycle is the ________ stage.
A) introduction
B) growth
C) maturity
D) decline
Q:
________ currencies are currencies that are traded, and thus have value, on international money markets.
A) Soft
B) Variable
C) Operational
D) Hard
Q:
Variable levies are an example of
A) quotas.
B) tariffs.
C) nontariff barriers.
D) countertrade.
Q:
Countervailing duties are an example of
A) quotas.
B) nontariff barriers acquisition.
C) tariffs.
D) countertrade.
Q:
Embargoes are an example of
A) quotas.
B) tariffs.
C) nontariff barriers.
D) subsidies.
Q:
Japanese retail distribution has historically been much more ________ than the system that exists in the United States or Western Europe.
A) closely held
B) fragmented
C) consolidated
D) open