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- Medium-answer Q2. Explain four factors why China is among the huge recipients of foreign direct investment.Foreign direct investment tends to be inexpensive, but it gives companies very little control of business operations in a foreign country. True or falseIf the direct quote for a U.S. investor for British pounds is $1.43/£, then the indirect quote for the U.S. investor would be ________ and the direct quote for the British investor would be ________. A) £0.699/$; £0.699/$ B) $0.699/£; £0.699/$ C) £1.43/£; £0.699/$ D) £0.699/$; $1.43/£ E) None of the Above
- GE Appliance Park in Louisville has been sold to Haier, a Chinese company. What form of Foreign Direct Investment is it for Haier?If you were a foreign investor, would you want to invest in a consumer electronics company in Japan? Does the fact that the company has had past problems requiring government intervention affect your initial decision? How does it impact your decision that you would be competing with a government-backed company during the bid process?Other things equal, the extent of foreign investment depends on relative expected returns. In order to make investments, what must investors in one country do to purchase the foreign currencies needed for the foreign investment? sell their own currency engage in currency arbitrage buy their own currency buy foreign government bonds float their currency
- Give an examples and non-examaples of foreign direct investmentImagine that Sony is having difficulty selling Playstations in Greece because of differences in local tastes. It decides to build a subsidiary in Greece. This is an example of a _______________ motive for foreign direct investment. A. cost factor B. backward integration C. country risk D. demand factorForeign Direct Investment, compared to exports, involves high transportation costs and various trade barriers. Select one:falseFalse
- Peru is growing relatively quickly and has begun to attract large inflows of foreign direct investment. While Peru relishes the benefit of the inflows, it is concerned about the potential negative effects if the foreign investors pull out their investments quickly. One particular reason for Peru to be concerned is that its banks have taken out large loans denominated in U.S. dollars and European euros from foreign banks. If the foreign direct investment is withdrawn quickly from Peru, what will be the effect on each of these items? A. Peru's money supply - B. Peru's exchange rate with other countries - C. Peru's exports - D. Peru's trade deficit - Answer Bank: No Effect, Increase or DecreaseA source of variation to consider in valuing a cross-border M&A is _____. foreign currency exchange rates All of the above accounting principles the timing of cash remittanceWhen making a new Direct Foreign Investment, what should a CEO of an MNC considers in an attempt to assess the feasibility of the investment in terms of the diversification benefits, incentives or any barriers from the host countries towards the organization?