International Business and Investment Strategies Quiz

Study Notes

The markets are imperfect in reality, allowing for the exploitation of exclusive advantages.
When analyzing a project's feasibility, a company should consider cash flow fluctuations and the correlation with MNC cash flow.
The higher the ability to change a project's cash flow and the lower the correlation with MNC cash flow, the lower the project risk.
Most FDI from UK companies is in the US.
A company is more likely to have stable cash flow if the percentage of foreign sales is higher and the number of foreign countries where the company sells products is larger.
A company can achieve a more effective investment project portfolio by focusing solely on one product and marketing it in one location.
A host government is less likely to provide incentives for FDI if the company plans to compete with local companies.
If countries have a significant influence on each other, the correlation in their economic growth rates may be high and positive, and a company benefits from diversifying sales between these countries.
A company benefits the most from diversification when the correlation between national economies is low.
A company may consider direct foreign investment in a country with a perceived undervalued currency because of the relatively low initial costs.