Test bank International Finance MCQ (word)Chap 17.doc

Fundamentals of Multinational Finance, 3e (Moffett) Chapter 17 Foreign Direct Investment Theory and Strategy 17.1 Multiple Choice and True/False Questions 1) An example of economies of scale in financing include A) being able to access the Euroequity, Eurobond, and Eurocurrency markets. B) being able to ship product in shiploads or carloads. C) being able to use large-scale plant and equipment. D) all of the above. Answer: A Topic: Economies of Scale Skill: Conceptual 2) Which of the following is NOT a factor of Porters diamond of national advantage? A) factor conditions B) demand conditions C) related and supporting industries D) All of the above are factors of the diamond of national advantage. Answer: D Topic: Porters Diamond Skill: Recognition 3) The OLI paradigm is an attempt to create a framework to explain why MNEs choose ________ rather than some other form of international venture. A) licensing B) joint ventures C) foreign direct investment D) strategic alliances Answer: C Topic: OLI Skill: Recognition 4) The O in OLI refers to an advantage in a firms home market that is ________. A) operator independent B) owner-specific C) open-market D) official designation Answer: B Topic: OLI Skill: Recognition 5) The owner-specific advantages of OLI must be ________. A) firm-specific B) not easily copied C) transferable to foreign subsidiaries D) all of the above Answer: D Topic: OLI Skill: Recognition 6) A/n ________ would be an example of an owner-specific advantage for an MNE. A) patent B) economy of scale C) economy of scope D) all of the above Answer: A Topic: OLI Skill: Conceptual 7) The L in OLI refers to an advantage in a firms home market that is a A) liability in the domestic market. B) location-specific advantage. C) longevity in a particular market. D) none of the above.