Which of the Following Items Is an Advantage of International

question 100

Multiple Choice

Which of the following items is an advantage of international expansion for an FI?

• A)An FI faces the political risk that a change in government may lead to the nationalization of fixed assets.
• B)A global FI must master the rules and regulations of each market in which it operates.
• C)The fixed costs of establishing overseas organizations may be very high in certain markets.
• D)International expansions allow an FI to maintain contact with and provide service to the needs of domestic multinational corporations.
• E)The absolute level of risk exposure in certain markets can be very high.

---

Definitions:

Direct Materials

Raw materials that can be directly traced to the production process and are a significant part of the finished product.

Raw Material

The basic substances or components that are processed and transformed into finished goods in manufacturing.

Fixed Overhead Volume Variance

The difference between the budgeted and actual volume of production, multiplied by the fixed overhead rate, indicating how fixed costs are allocated over different levels of output.

Fixed Overhead Budget Variance

This term refers to the difference between the budgeted fixed overhead costs and the actual fixed overhead costs incurred.