Refer to the Scenario Below to Answer the Following Questions

question 84

Multiple Choice

Refer to the scenario below to answer the following questions.
Selman & Saks,a maker of men's and women's razors and electric hair trimmers,had little reason to become involved in the global arena.But after acquiring Wellman Enterprises,whose largest division engages in a licensing agreement with a German firm to produce women's hosiery,managers at Selman & Saks wondered just whether a company- wide global focus would be more profitable after all.
Managers at Selman & Saks studied Wellman's licensing agreement in great detail.Though seeing first- hand the benefits Wellman found with the licensing agreement,managers decided that Selman & Saks would target the French market merely via exporting.
With the assistance of a domestic export department,the Selman & Saks razors and hair trimmers entered France.For six months,sales were mediocre.But after that,sales suffered.Opinions varied among numerous managers as to the cause of the failure."Who knows the local market better than people who live there?" was a comment heard throughout Selman & Saks."Maybe we needed an alliance with a French firm,or a licensing agreement,before racing to get there."
-Based on the passage,Selman & Saks entered the French market to gain which of the following benefits of global trade?

• A)the ability to offset domestic economic cycles
• B)access to less expensive labor
• C)access to less expensive materials
• D)access to new consumer markets
• E)access to foreign investment incentives

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Definitions:

Variance

A statistical measure that represents the dispersion of data points in a data set around the mean, indicating how spread out the data is.

American Call Option

An option contract that gives the holder the right, but not the obligation, to buy a security at a specified price before the option expires.

Expiration Date

The specified date on which an options or futures contract becomes null and void.

ESOs

Employee Stock Options refer to the rights given to employees, included in their remuneration package, enabling them to buy shares of the company stock at a predetermined price.