Hewlett-Packard Licenses Some of Its Intellectual Property Through Strategic Alliances

question 125

Multiple Choice

Hewlett-Packard licenses some of its intellectual property through strategic alliances. Which of the following is correct about this relationship?

• A)This is a joint venture because in licensing arrangements, a new company is created.
• B)This is an equity strategic alliance because licensing does not involve the creation of a new company, but does involve an equity commitment.
• C)The firms risk charges of collusion because most licensing relationships between competitors involve explicit collusion.
• D)This is a nonequity strategic alliance with Hewlett-Packard leveraging its unique capabilities.

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Definitions:

Total Utility

The complete fulfillment gained from the consumption of a specific quantity of products or services.

Total Utility

The overall satisfaction or happiness a consumer gets from consuming a particular quantity of goods or services.

Risk-neutral

A risk preference suggesting indifference between taking a risk with a potential gain or loss and a certain outcome with the same expected payout.

Utility

A measure of satisfaction, happiness, or benefit derived from consuming a product or service.