Which of the Following Is Characteristic of Cross-Border Contractual Relationships

question 70

Multiple Choice

Which of the following is characteristic of cross-border contractual relationships?

• A) When compared to FDI, they are less susceptible to volatility and risk, and tend to bring both parties a predictable stream of revenue.
• B) The focal firm attains maximum control by establishing a physical presence, and ownership of key assets, in the foreign market.
• C) It attracts high attention and criticism for the focal firm because of the local perception of foreign entities.
• D) They are governed by a contract that provides the focal firm with no control over the foreign partner.

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Definitions:

Calls

A financial instrument giving the holder the right, but not the obligation, to buy an asset at a specified price within a specific period.

Period Cost

Costs that are not directly associated with the production of goods and are expensed in the period they are incurred, such as administrative and selling expenses.

Variable Cost

Charges that adjust according to the volume of goods produced or sold, specifically materials and labor costs.

Opportunity Cost

The foregone benefit that could have been achieved from options not chosen when selecting one among several alternatives.