MGT 448 Global Business Strategies Final Exam Answers


  1. List two benefits of Foreign Direct Investment (FDI) for the Host Country (CH 8)


  1. a) Transfer of resources and technology
  2. b) Increases competition and leads to economic growth.



  1. 2. In which type of economic system are all productive activities privately owned? (CH 3)


  1. a) a mixed economy
  2. b) a command economy
  3. c) a representative economy
  4. d) a market economy



  1. Which is not one of Geert Hofstede’s Cultural Dimensions?(CH 4)


  1. Individualism
  2. Language
  3. Power Distance
  4. d) Uncertainty Avoidance



  1. The establishment of a wholly new operation in a foreign country is called?(CH 8)


  1. a) an Acquisition
  2. b) a Merger
  3. c) a Greenfield Investment
  4. d) a Multinational Venture



  1. The _______ is the rate at which a foreign exchange dealer converts one currency intoanother currency on a particular day. (CH 10)



  1. a) Currency swap rate
  2. b) Forward rate
  3. c) Specific rate
  4. d) Spot rate


  1. The ________ is the rate at which one currency is converted into another. (CH 10)


  1. a) Exchange rate
  2. b) Cross rate
  3. c) Conversion rate
  4. d) Foreign exchange market


  1. A _________ is a situation in which a country cannot service its foreign debt obligations, whether private sector or government debt.(CH 11)



  1. a) Currency crisis
  2. b) Banking crisis
  3. c) Foreign debt crisis
  4. d) Foreign exchange crisis


  1. NAFTA is an example of a(n) ________________ ?(CH 9)



  1. a) Customs Union

b)Common Market

  1. c) Free Trade Area
  2. d) Economic Union




  1. Which of the following is not an advantage of buying from independent global suppliers? (CH 17)



a)it gives the firm greater flexibility

b)it helps drive down the firm’s cost structure

  1. c) it protects proprietary property

d)it helps the firm to capture orders from international customers



10:  List three purposes of the bill of lading?  (CH 16)




  1. a) __evidence to the contract of carriage_____________
  2. b) ___it shows or proves receipt of goods___________
  3. c) ___it documents the title of goods___________



  1. List four potentialentry modes for a foreign market: (CH 15)



  1. a) ___franchising and licensing___________
  2. b) __ Joint ventures, strategic alliances and other collaborative strategies___________
  3. c) _Direct and indirect exporting and importing._____________
  4. d) ____foreign direct investment__________


12:  Which of the following is notimportant to a successful strategic alliance? (CH 15)

  1. a) establishing a 50:50 relationship with partner

b)creating strong interpersonal relationships

c)a shared vision

d)learning from the partner




13:  The World Bank was created in 1944 to ?(CH 11)

a)enhance economic development through grants (particularly in Latin America)

  1. b) enhance economic development through subsidized loans
  2. c) facilitate foreign currency exchanges between countries.
  3. d) enhance social development through low interest loans.


  1. Standardized advertising makes sense in all of the following situations except (ch 18)
  2. a) when cultural differences among nations are significant
  3. b) when a firm is trying to save money

c)when creative talent is scarce and one large effort to develop a campaign will be more successful than numerous smaller efforts

  1. d) when brand names are global


  1. Which of the following does nothelp predict a Manager’s success in a foreign posting?(ch 19)
  2. a) Cultural toughness
  3. b) Technical expertise
  4. c) Others-orientation
  5. d) Perceptual ability


  1. Compared to developed nations, less developed nations have ____________ ? (ch 12)
  2. a) similar costs of capital
  3. b) more investment opportunities
  4. c) smaller capital markets

d)greater liquidity




  1. Firms using _______ fill all key management positions with parent-country nationals. (ch 19)
  2. An geocentric staffing policy
  3. A ethnocentric staffing policy
  4. A polycentric staffing policy
  5. A transcentric staffing policy


  1. The term euro-currency refers to __________ .  (ch 12)
  2. a) any currency banked outside its country of origin

b)the currency used by the European Union countries

  1. c) currencies purchased in the international equities market
  2. d) bonds sold outside the borrower’s country that are denominated in the currency of the country in which they are issued


  1. The Exchange Rate for the Euro was 1.3 Dollars in February 2015. How many $US is a 225 Euro Hotel Room?$US__292.5____     (Ch 10- Wk4 Instructor’s Post)

(Instructor’s Note: This is a manual calculation. Do not use online Currency Converters as they will give you the wrong answer because it will not reflect the Exchange Rate specified in this test question. )


  1. According to ________, a company’s home-country standards of ethics are the appropriate ones to follow in foreign countries. (ch5)
  2. a) cultural relativism
  3. b) the naïve immoralist

c)the Friedman doctrine

  1. d) the righteous moralist



  1. Translation Exposure is; (ch 10)
  2. a) amisunderstanding caused by cross-cultural humor.
  3. b) an Economic Risk that changes in foreign exchange rates will affect the reported financial statements of corporations.
  4. c) The Political Risk of a language misunderstanding between Global Leaders from different countries caused by differences in their interpreters.
  5. d) a Legal/Regulatory Risk that a Law or Regulation will be misinterpreted by the Corporate Lawyers in the Home country.


  1. List 3 factors to be considered when considering outsourcing to a Foreign Supplier. (ch 17 & Wk4 Discussion Starter)
  2. a) ___quality of product offered by the supplier____________
  3. b) ____Cost efficiency and trade regulation________
  4. c) ____location and logistics capabilities__________

23   List 3 risks of starting an overseas business venture. (Wk3 LT Assignment)

  1. a) ____political risks___________
  2. b) ____Economic risks such as currency risks__________
  3. c) ____socio-cultural risks __________


  1. What is the advantage of “Countertrade” in global trade? (ch 16)
  2. a) it is a form of global competition.
  3. b) it enables trade without the need for repatriation of funds.

c)it mitigates Interest Rate Risk


  1. What is a company’s formal statement of ethical priorities called? (ch 5)
  2. a) Mission Statement
  3. b) Code of Ethics
  4. c) Code of Company Values
  5. d) Organizational Culture


Short Answer Question.   Describe how a Host Country’s “Culture” can potentially impact a global Business venture (5 points per sentence to a maximum of 25 points)(ch 4, 5, 18, & 19)