The Minimum That a Firm Has to Do to Engage

question 57

Multiple Choice

The minimum that a firm has to do to engage in international business is to

• A) export or import products from other countries.
• B) invest directly in operations in another country.
• C) establish joint ventures or strategic alliances with companies in other countries.
• D) export low-wage manufacturing jobs to companies in other countries.
• E) develop franchises and subsidiaries in other countries.

---

Definitions:

Amortized Cost

The initial investment cost adjusted for amortization or depreciation over the period of the investment.

Effective Interest Rate

The real cost of borrowing after adjusting for compounding interest and all fees. It provides a more accurate representation of the actual financial charge associated with a loan.

Trading Security

A financial instrument that is bought and sold for the purpose of generating profits on short-term fluctuations in price.

Available-for-sale Security

A debt or equity security not classified as a held-to-maturity or trading security, which can be sold in the short term for capital gains.