IM-1 CHAPTER 20 INTERNATIONAL TRADE FINANCE
SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER
QUESTIONS AND PROBLEMS
QUESTIONS
1. Discuss some of the reasons why international trade is more difficult and risky from the exporter’s
perspective than is domestic trade.
Answer: International trade is more difficult and risky for a firm than is domestic trade. In foreign trade,
the exporter may not be familiar with the buyer, and thus not know if the importer is creditworthy. If
merchandise is exported abroad and the buyer does not pay, it may prove difficult, if not impossible, for
the exporter to have any legal recourse. Additionally, political instability makes it risky to ship
merchandise abroad to certain parts of the world.
2. What three basic documents are necessary to conduct a typical foreign commerce trade? Briefly
IM-1 CHAPTER 16 FOREIGN DIRECT INVESTMENT
SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER
QUESTIONS AND PROBLEMS
QUESTIONS
1. Recently, many foreign firms from both developed and developing countries acquired high-tech U.S.
firms. What might have motivated these firms to acquire U.S. firms?
Answer: Many foreign firms might have been motivated to gain access to technical know-how residing
in U.S. firms and at the same time monopolize its use. Refer to the reverse-internalization hypothesis
discussed in the text.
2. Japanese MNCs, such as Toyota, Toshiba, Matsushita, etc., made extensive investments in the
Southeast Asian countries like Thailand, Malaysia and Indonesia. In your opinion, what forces are driving
Japanese investments in the region?
Answer: Most likely, these Japanese MNCs have invested heavily in Southeast Asia in order to take
Chapter 01 - Introduction to Operations Management
1-1 Chapter 01 Introduction to Operations Management True / False Questions 1. Operations managers are responsible for assessing consumer wants and needs and selling and promoting the organization's goods or services. FALSE Difficulty: Easy TLO: 4 Taxonomy: Knowledge 2. Often, the collective success or failure of companies' operations functions will impact the ability of a nation to compete with other nations. TRUE Difficulty: Easy TLO: 1 Taxonomy: Knowledge 3. Companies are either producing goods or delivering services. This means that only one of the two types of operations management strategies are used. FALSE Difficulty: Medium TLO: 3 Taxonomy: Application Chapter 01 - Introduction to Operations Management
1-2 4. Operations, marketing, and finance function independently of each other in most organizations. FALSE Difficulty: Medium TLO: 2 Taxonomy: Knowledge 5. The greater the degree of customer involvement, the more challenging the design and management of operations. TRUE Difficulty: Easy TLO: 4 Taxonomy: Application 6. Goods producing organizations are not involved in service activities FALSE Difficulty: Medium TLO: 3 Taxonomy: Knowledge 7. Service operations require additional inventory because of the unpredictability of consumer demand. FALSE Difficulty: Easy TLO: 3 Taxonomy: Knowledge Chapter 01 - Introduction to Operations Management
CHAPTER 12 INTERNATIONAL BOND MARKETS
SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER
QUESTIONS AND PROBLEMS QUESTIONS 1. Describe the differences between foreign bonds and Eurobonds. Also
discuss why Eurobonds make up the lion’s share of the international bond
market. Answer: The two segments of the international bond market are: foreign
bonds and Eurobonds. A foreign bond issue is one offered by a foreign
borrower to investors in a national capital market and denominated in that
nation’s currency. A Eurobond issue is one denominated in a particular
currency, but sold to investors in national capital markets other than the
country which issues the denominating currency.
Eurobonds make up over 80 percent of the international bond market. The
two major reasons for this stem from the fact that the U.S. dollar is the
