When a Company ________ a Foreign Country,it Makes a Direct

question 22

Multiple Choice

When a company ________ a foreign country,it makes a direct investment to establish a business that it solely owns and controls there.

• A) creates a new, wholly-owned subsidiary in
• B) enters into a licensing arrangement with
• C) exports goods to
• D) purchases a local firm to enter

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Definitions:

Interest

The cost of borrowing money, typically expressed as an annual percentage rate, or the income earned from lending funds or making an investment.

Fair Value Hedge

A hedge of the exposure to changes in fair value of a recognized asset or liability, or an unrecognized firm commitment, that is attributable to a particular risk.

Forward Contract

A financial contract obligating the buyer to purchase, and the seller to sell a specific asset at a predetermined future date and price.

Spot Rates

The current market price at which a particular security can be bought or sold for immediate delivery.