Which of the Following Is Not a Drawback to Licensing

question 15

Multiple Choice

Which of the following is not a drawback to licensing?

• A) A company does not have tight control over operations in foreign countries.
• B) Licensing limits a company's ability to coordinate strategy.
• C) A company may lose control of technological know-how.
• D) A company's brand could become damaged if the licensee does not perform up to established standards.
• E) All of these are drawbacks to licensing.

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Definitions:

Inflation Rates

The rate at which the cost of general goods and services inflates, consequently eroding the power to buy.

Relative Purchasing Power Parity

An economic theory that states the rates of change in price levels between two countries should equal the rate of change in the exchange rate between their currencies.

Triangle Arbitrage

A practice of profiting from the price differential between three different currencies in the foreign exchange market.

Forward Trades

Non-standardized contracts between two parties to buy or sell an asset at a specified future date for a price agreed upon today.