İŞLETME FİNANSI II - Deneme Sınavı - 15

The General Agreement on Tariffs and Trade (GATT) which was signed in 1947.

Japan started to liberalize in 1984.

Payments for goods and services are among the type of business according to the balance of payment, not among the economic relations.

The widely used communications network is the Society of Worldwide Interbank Financial Telecommunications (SWIFT), which began operations in Europe in 1973.

Conglomerate multinational corporation produces a different range of products in different countries.

Exporting: It is the most popular low-risk entry strategy as it involves little investment and exit is unproblematic.

International Joint Venture (IJV): An IJV is an agreement by two or more companies, one or more is foreign, to produce a product or service together.

Sovereign risk, on the other hand, relates to the possibility of losses on claims to foreign government or government institutions in the form of bonds and loans.

A derivative security is a financial instrument whose value depends upon the value of another asset.

When two parties agree on the terms of a transaction, a clearinghouse sits in the middle, acting as both the buyer and the seller.

Conglomerate multinational corporation produces a different range of products in different countries. By this diversification process, conglomerate multinationals look to spread risks, and maximize returns by careful buying of assets overseas. The correct answer is E.

Horizontally integrated multinational corporation involves the production of essentially the same product in different countries. The main object here is for the corporation to continue to grow by the means of expansion into many different types of new markets. The correct answer is E.

Vertically integrated multinational corporation commences various stages of production in different countries. The essential motive behind this growth strategy is for the corporations to be able to obtain or have more control over the costs and to reduce the uncertainty of the business environment. The correct answer is D.

Franchising is a more comprehensive type of licensing. The franchisee receives a complete package comprising the franchiser’s trademark, products and services, and a complete set of operating principles thereby creating the illusion of a worldwide company for a fee and royalty payments. the correct answer is A.

International Joint Venture (IJV): An IJV is an agreement by two or more companies, one or more is foreign, to produce a product or service together. It involves a much higher level of investment and therefore of risk than the previous entry strategies. Generally, an IJV consists of a multinational corporation and a local partner. Equity proportions vary but usually relative ownership approximates to 50–50 although there are many variations including IJVs with more than two partners including relatively passive partners with minority holdings. The correct answer is B.

Contract Manufacturing and Service Provision: Firms often prefers to outsource production and the main form of outsourcing in many industries is a contract manufacturing agreement. Outsourcing allows a firm to concentrate on enhancing products by focusing on R&D, marketing and design while enjoying the cost advantages brought in by the expertise of contract manufacturers (CM). For decades, many of the MNCs outsource production in different countries in order to benefit the labor cost advantages, as well as the logistical proximity. The best example is specified as Nike that distinguishes design, product development, and marketing from shoe and clothing manufacturing geographically. The correct answer is D.

Exporting: It is the most popular low-risk entry strategy as it involves little investment and exit is unproblematic. It is a fact that for the firms with insufficient resources for other types of internationalization strategies, exporting is the only way to reach to foreign consumers. However, success is entirely dependent on being able to identify efficient and reliable distribution channels. Other critical factors are import tariffs and quotas as well as freight costs. The correct answer is C.

The ratings lie on a spectrum ranging between highest  credit quality  on one end and  default  or “junk” on the other. Long-term credit ratings are denoted with a letter: a triple A (AAA) is the highest credit quality, and C or D (depending on the agency issuing the rating) is the lowest or junk quality. Within this spectrum, there are different degrees of each rating, which are, depending on the agency, sometimes denoted by a plus or negative sign or a number. The correct answer is B.

It is a fact that the global financial system promotes economic growth by several means: - facilitating specialization and promoting trade; - mobilizing resources globally; - Increasing the set of opportunities available to companies, entrepreneurs, and individuals to participate in and contribute to global economic growth. - facilitating risk management, - obtaining information for the evaluation of businesses and allocating capital. The correct answer is C.

The correct answer is A.