In Selecting Joint Venture Partners in a Foreign Country, a Company

question 53

Multiple Choice

In selecting joint venture partners in a foreign country, a company should do all of the following EXCEPT:

• A) choose a partner with shared interests in meeting customer needs.
• B) choose a partner that is a new entrant to your firm's line of business.
• C) choose a partner with a strong local market for its own products.
• D) choose a partner with future expansion possibilities.
• E) choose a partner with good profit potential.

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Definitions:

Expected Value

The anticipated value for a given investment or decision in probability and statistics, calculated as the sum of all possible values each multiplied by the probability of occurrence.

Risk Trading

The act of exchanging financial instruments or commodities with a variable level of risk, often in the hope of gaining a higher return.

Adverse Selection

A situation in economics and insurance where parties with higher risk are more likely to engage in an agreement, leading to unbalanced and unfavorable outcomes for one of the parties.

Diversification

An investment strategy aimed at reducing risk by allocating investments among various financial instruments, industries, or other categories.