A Firm Would Be Most Likely to Use Backward Invention

question 64

Multiple Choice

A firm would be most likely to use backward invention in which of the following situations?

• A) when it needs to offer a less complex product in a foreign market than it sells elsewhere
• B) when it has decided to rely on a straight extension strategy
• C) when it first markets a product internationally
• D) when it participates in a free trade zone
• E) when it relies on the practice of dumping

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Definitions:

Managed Investment Company

A company that pools funds from investors to collectively invest in securities.

Hedge Funds

Investment funds that employ various strategies to earn returns for their investors, often involving higher risk.

Unit Investment Trusts

Investment companies that offer shares in a fixed portfolio of securities in a one-time public offering, which then terminate at a specific date.

Profit

The financial gain obtained when the revenue generated from business activities exceeds the expenses, costs, and taxes involved in sustaining the operation.