International Business and Trade

Questions and Answers

Foreign portfolio investment

To protect local businesses and generate revenue

Licensing agreement

Trade quota Signup and view all the answers

To protect domestic producers and decrease foreign competition Signup and view all the answers

Franchising Signup and view all the answers

Standards and criteria for products Signup and view all the answers

To profit from fluctuating exchange rates Signup and view all the answers

The currency becomes less valuable Signup and view all the answers

To regulations around foreign investments Signup and view all the answers

Study Notes

Foreign portfolio investment involves buying foreign stocks, bonds, and other financial instruments to invest in businesses.
Importing involves bringing products or services into a country.
Global sourcing involves buying equipment, capital goods, raw materials, or services from around the world.
Exporting involves selling goods or services to another country.
Licensing agreements grant permission to use a product, service, brand name, or patent in exchange for a fee or royalty.
Exclusive distribution rights allow a company to be the only distributor of a product in a geographic area or specific country.
Franchising involves an agreement to use a company's name, service, products, and marketing, with the franchisee signing a contract and agreeing to follow the franchisor's rules.
Joint ventures occur when two businesses form a new company with shared ownership.
Foreign subsidiaries, also known as "wholly owned subsidiaries", are independent entities of a parent company in another country.

Trade barriers are government-set rules and regulations to protect local businesses, generate revenue, and protect citizens from harmful products.
Protectionism is a shield against foreign competition.
Tariffs are taxes or duties charged on imported products or services, raising the cost to encourage local purchases.
Trade quotas are government-imposed limits on the amount of product that can be imported in a certain period.
Trade embargos are complete bans on trade between countries.
Trade sanctions are partial embargos limiting trade of specific products or with specific countries or individuals.

Regulations around foreign investments include the Investment Canada Act, the Bank Act, the Transportation Act, the Broadcasting Act, and the Telecommunications Act.

Standards, such as environmental protection, voltage, health, and safety, vary depending on the country.
Time zone differences create challenges in the international business world.
Currency fluctuations create uncertainty in pricing goods and services.
Exchange rates are affected by economic conditions, trade, politics, and psychological factors.

Currency speculating involves buying, holding, or selling foreign currency to profit from value changes.
The Canadian dollar is relatively lower than the USD due to currency speculating.
Factors affecting exchange rates include economic conditions, trade, politics, and psychological factors.