Q&A Hero

Q: Individuals from the home country manage operations outside the home country in ________ staffing. A) ethnocentric B) polycentric C) regiocentric D) geocentric

Q: Currency speculation is the purchase or sale of a currency with the expectation that its value will remain constant.

Q: Which of the following is an appropriate and widely-used method for staffing international business operations? A) collective narcissism B) cronyism C) nepotism D) geocentric approach

Q: If ABC Software holds a currency option to purchase Swiss francs at SF 1.67/$ in 30 days, at the end of which the exchange rate is SF1.70/$, then ABC Software ________. A) is required to follow through on a currency exchange B) has succeeded in hedging against exchange rate risk C) would exercise its currency option D) would not exercise its currency option

Q: The customary means by which a company fills up vacancies in its offices is called ________. A) a staffing policy B) an employment policy C) onboarding D) outsourcing

Q: If ABC Software simultaneously purchases and sells foreign exchange for two different dates, the company is said to be involved in ________. A) increasing its foreign exchange rate risk B) conducting a currency swap C) entering an arbitrage situation D) buying and selling at the spot rate

Q: Alec is an American working for a software company in Texas. He has been assigned to work on a project in China for a year. He would be considered as a(n) ________ in China. A) domicile resident B) expatriate C) host-country national D) third-country national

Q: Which of the following is true about a quote of ¥117.87/$?A) It is equal to $.008484/¥.B) The quote is in U.S. dollars.C) This is an indirect quote on the yen.D) It costs a little more than a dollar to buy one yen.

Q: Citizens of one country who are living and working in another are called ________. A) local employees B) domicile residents C) repatriates D) expatriates

Q: If Sally sees a quote of ¥117.87/$, she should know that ________. A) the yen is the base currency here B) this is a direct quote on the dollar C) this is a direct quote on the yen D) the quote is in U.S. dollars

Q: ________ is the process of staffing a company and ensuring that employees are as productive as possible. A) Business process reengineering B) Human resource management C) Organizational diagnostics D) Industrial relations

Q: A(n) ________ is a right to exchange a specific amount of a currency on a specific date at a specific rate. A) forward contract B) currency option C) currency hedging D) interest arbitrage

Q: ________ is the simultaneous purchase and sale of foreign exchange for two different dates. A) Currency hedging B) Currency speculation C) Currency swap D) Currency arbitrage

Q: Codetermination allows labor representatives to participate in high-level company meetings.

Q: The exchange rate at which two parties agree to exchange currencies on a specified future date is called a ________ rate. A) forward B) prime C) spot D) cross

Q: Centralizing the decisions that directly impact workers' lives contribute to better labormanagement relations.

Q: The exchange rate at which a bank will purchase a currency is called a ________ rate. A) prime B) buy C) ask D) forward

Q: The compensation of nonmanagerial workers is strongly influenced by increased cross-border business investment.

Q: Which of the following is an exchange rate that requires delivery of the traded currency within two business days? A) forward rate B) spot rate C) cross rate D) prime rate

Q: Training local workers on how to work on an assembly line is an example of cultural assimilation.

Q: Sensitivity training constitutes the most basic level of cultural training for managers on international assignments.

Q: An exchange rate calculated using two other exchange rates is called a(n) ________. A) interest arbitrage B) forward contract C) forward rate D) cross rate

Q: Guerrilla linguistics is often used in the cultural assimilation stage.

Q: The exchange rate between the euro (€) and the dollar is €0.8461/$. Which of the following is the correct direct quote on the dollar? A) $2.20/€ B) $1.1819/€ C) $5.50/€ D) $0.8461/€

Q: Reverse culture shock is much milder than the initial culture shock an expatriate faces.

Q: While designating an exchange rate, the ________ is always the denominator. A) counter currency B) base currency C) cross currency D) quoted currency

Q: The psychological process of readapting to one's home culture is seldom difficult for expatriates who have successfully adapted to new cultures.

Q: While designating an exchange rate, the numerator indicates the ________. A) base currency B) transaction currency C) quoted currency D) cross currency

Q: Expatriate failure refers to an employee's early return from an international assignment because of inadequate job performance.

Q: An exchange rate of ¥117.87/$ indicates ________. A) that 117.87 yen buys one dollar B) that 117.87 dollars buys one yen C) a direct quote on the dollar D) an indirect quote on the yen

Q: In a quoted exchange rate of $1.69/British pound, the British pound is called the ________. A) base currency B) counter currency C) cross currency D) quoted currency

Q: Reverse culture shock is the trouble expatriates face while adjusting to a new environment in which they find themselves.

Q: The purchase or sale of a currency with the expectation that its value will change and generate a profit is called ________. A) currency hedging B) currency arbitrage C) currency speculation D) currency conversion

Q: The process of identifying and attracting a qualified pool of applicants for vacant positions is called selection.

Q: The profit-motivated purchase and sale of interest-paying securities denominated in different currencies is called ________. A) currency conversion B) currency hedging C) interest arbitrage D) interbank interest rates

Q: Companies typically recruit locally for nonmanagerial positions.

Q: ________ is the instantaneous purchase and sale of a currency in different markets for profit. A) Currency hedging B) Currency arbitrage C) Currency speculation D) Currency conversion

Q: To speed up the process of getting government approval for local operations, companies must hire home country nationals.

Q: The practice of insuring against potential losses that result from adverse changes in exchange rates is called currency ________. A) hedging B) arbitrage C) speculation D) conversion

Q: The process of recruitment involves screening and hiring the best-qualified applicants with the greatest performance potential.

Q: The process of reducing the size of an organization's workforce is called decruitment.

Q: Investors use the foreign exchange market for ________. A) stock dilution B) currency speculation C) market capitalization D) mean reversion

Q: The first phase of human resource planning is estimating the company's future HR needs.

Q: The bid-ask spread in the foreign exchange market is the ________. A) price at which a bank will buy a currency B) price of currency in the foreign exchange market C) difference between the bid and ask quotes for a currency D) the time lapsed between a bid quote and an ask quote

Q: A major drawback of geocentric staffing is that it is expensive.

Q: The rate at which one currency is interchanged for another is called the ________. A) exchange rate B) interbank interest rate C) official cash rate D) prime rate

Q: An ethnocentric policy toward staffing is typically reserved for top-level managers.

Q: In geocentric staffing, operations outside the home country are managed by the best-qualified individuals, regardless of their nationality.

Q: ________ refers to the most commonly quoted interest rate that London banks charge other large banks that borrow Eurocurrency. A) London Interbank Offer Rate (LIBOR) B) London Interbank Bid Rate (LIBID) C) Spot rate D) Cross rate

Q: A(n) ________ is a system that allocates financial resources in the form of debt and equity according to their most efficient uses. A) international equity market B) forward market C) capital market D) eurocurrency market

Q: The major drawback of polycentric staffing is the potential for losing control of the host-country operation.

Q: What is the foreign exchange market? Explain why investors use this market.

Q: Polycentric staffing places managerial responsibility in the hands of people intimately familiar with the local business environment.

Q: In the interbank market, the process of aggregating the currencies that one bank owes another and then carrying out that transaction is called ________. A) swapping B) dumping C) hedging D) clearing

Q: In ethnocentric staffing, operations outside the home country are managed by individuals from the host country.

Q: Banks in the interbank market ________. A) provide long-term loans to small-sized and medium-sized companies B) provide long-term loans to large companies C) offer advice on trading strategies D) exchange currencies exclusively at spot rates

Q: An ethnocentric staffing strategy can facilitate the transfer of special know-how to branch operations.

Q: The world's largest banks exchange currencies at spot and forward rates in the ________. A) International Finance Corporation B) Eurocurrency market C) interbank market D) World Bank

Q: Companies use polycentric staffing to re-create local operations in the image of home-country operations.

Q: The ________ is the currency that dominates the foreign exchange market. A) Japanese yen B) British pound C) U.S. dollar D) Australian dollar

Q: Citizens who are working and living in their home country are called expatriates.

Q: The market in which currencies are bought and sold and their prices determined is called the ________. A) Eurocurrency market B) international capital market C) international bond market D) foreign exchange market

Q: The process of staffing a company and ensuring employees are as productive as possible is called human resource management.

Q: Foreign bonds issued and traded in Asia outside Japan and normally denominated in dollars are called ________. A) bulldog bonds B) yankee bonds C) samurai bonds D) dragon bonds

Q: What challenges do international labor unions face as they try to accomplish their objectives?

Q: Briefly describe any two of the three main components of the international capital market.

Q: What factors influence the wages of nonmanagerial workers?

Q: What is the role of debt in national capital markets, and what form does company debt normally take? Describe the different types of international bonds.

Q: Discuss the disadvantages of an ethnocentric staffing policy. How do bonuses, tax incentives, and employee expectations contribute to high personnel costs?

Q: How does the international capital market reduce the cost of money for borrowers? What are the two components for every quoted exchange rate?

Q: Briefly explain how companies compensate managers in international markets.

Q: What is an offshore financial center? Differentiate between an operational center and a booking center, providing examples for each.

Q: Explain why a person's ability to bridge cultural differences must be considered during "selection" for international assignments. How can eTraining help in bridging cultural differences?

Q: Interest arbitrage is the profit-motivated purchase and sale of interest-paying securities denominated in different currencies.

Q: Compare and contrast the methods of cultural training. Is any single method better than all the others?

Q: The practice of insuring against potential losses that result from adverse changes in exchange rates is called currency arbitrage.

Q: Differentiate between culture shock and reverse culture shock. How can companies help employees deal with such issues?

Q: The forces of supply and demand determine currency prices.

Q: Explain the advantages and disadvantages of a geocentric staffing policy, and discuss the effects of culture shock when assigning an employee to work in another country.

Q: The London Interbank Bid Rate (LIBID) is the interest rate that London banks charge other large banks for borrowing Eurocurrency.