Which of the Following Theories Identifies Specialization as a Reason

question 14

Multiple Choice

Which of the following theories identifies specialization as a reason for international business?

• A) Theory of comparative advantage
• B) Imperfect markets theory
• C) Product cycle theory
• D) None of the above

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Definitions:

Equity Kickers

Additional equity given to lenders or investors as an incentive, usually in the form of warrants or options.

Option Contract

A financial contract that allows the purchaser the option, without any compulsory enforcement, to purchase or dispose of a base asset at an agreed-upon price, either on or prior to a predetermined date.

Exercise Price

The rate at which an option contract's holder has the right to purchase (for a call option) or dispose of (for a put option) the fundamental asset.

Strike Price

The predetermined price at which a call option can be purchased or a put option can be sold upon exercise.