Final Exam MGMT 448 - Mark The Correct Answer

Final Exammgt 448final Examplace A Mark Next To The Correct Answer Pl

Final Exammgt 448final Examplace A Mark Next To The Correct Answer Pl

Final Exam MGT 448 FINAL EXAM Place a mark next to the correct answer. Please be careful to answer all 20 questions.

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.

Paper For Above instruction

Globalization has fundamentally reshaped the financial landscape, making international investments more accessible and efficient for individuals and institutions. The ability to invest across borders has led to increased capital mobility, fostering economic integration and growth. Systematic risk, often influenced by macroeconomic factors such as interest rates, inflation, and political stability, impacts entire markets and portfolios, differentiating it from unsystematic risk associated with specific companies or sectors.

Market makers play a crucial role in the functioning of financial markets by providing liquidity. They are financial institutions or individuals who stand ready to buy and sell securities, facilitating smooth transactions. Equity loans, distinguished from other loans, involve the issuance of stock and do not require repayment based on profits, unlike debt obligations such as bonds or bank loans. Furthermore, a company's political economy greatly influences its operations and culture; these two facets are interconnected, reflecting a nation's policy environment and societal values alike.

In a market economy, the fundamental principle of supply and demand determines prices. When demand exceeds supply, prices rise, signaling producers to increase production. Logistics, the management of the transmission of physical materials, encompasses procurement, production, and distribution activities that ensure the efficiency of the supply chain. The just-in-time (JIT) inventory system minimizes costs by reducing inventory levels and speeding up turnover, thereby avoiding excess stockpiles and associated storage costs.

Outsourcing component parts or full products offers several advantages, including flexibility and access to specialized expertise. This strategy allows firms to respond swiftly to market changes and focus on core competencies. Theories justifying government intervention in developing specific industries include the national competitive advantage, which emphasizes the importance of factors like innovation, infrastructure, and supporting policies, contrasting with classical trade theories such as the theory of comparative advantage.

Foreign exchange (Forex) rates are crucial in international trade, with spot rates reflecting immediate transactions and forward rates covering future exchanges. Exchange rate risk manifests in various forms, including translation risk, which affects foreign subsidiaries' financial statements, and transaction risk arising from currency fluctuations between contract inception and settlement. The World Bank, established in 1944, aimed to promote global economic development through financial assistance and technical support, initially focusing on European reconstruction and subsequently expanding globally.

Trade policies like tariffs raise the cost of imports, protecting domestic industries but potentially leading to trade wars or retaliation. Strategic considerations such as political instability, exemplified by coups, necessitate exit strategies for businesses operating in volatile environments. Organizational structures supporting diversification and responsiveness include functional, hybrid, matrix, and worldwide product divisions, each suited for different strategic goals.

Transnational strategies involve tailoring products and marketing to local markets while maintaining global efficiency, exemplifying a 'think global, act local' approach. Conversely, advantages of such strategies include exploiting experience and location economies but often face challenges in implementation. Staffing policies such as geocentric recruiting aim to identify the best global talent, regardless of nationality, fostering a diverse and skilled workforce.

The value of a weak dollar typically results in exports becoming more competitive, potentially boosting domestic employment but also increasing inflationary pressures due to higher import costs. Thus, currency fluctuations have profound impacts on economic stability, trade balances, and corporate strategies, emphasizing the importance of currency risk management in international finance.

References

  • Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. (2014). International Business. Pearson.
  • Hill, C. W. L. (2019). Global Business Today. McGraw-Hill Education.
  • Shapiro, A. C. (2014). Multinational Financial Management. Wiley.
  • Krugman, P. R., Obstfeld, M., & Melitz, M. J. (2018). International Economics. Pearson.
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  • Frieden, J. (2019). International Political Economy. W. W. Norton & Company.
  • Rugman, A., & Verbeke, A. (2004). A perspective on regional and global strategies of multinational enterprises. Journal of International Business Studies, 35(1), 3-18.
  • Porter, M. E. (1990). The Competitive Advantage of Nations. Free Press.
  • Bhagwati, J. (2004). In Defense of Globalization. Oxford University Press.
  • Levithal, M. (2007). Managing treasury risk: Exchange rate risk management strategies. Journal of Corporate Treasury Management, 7(2), 89-102.

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