Q&A Hero

Q: Which of the following statements is true with regard to Geert Hofstede's cultural dimensions? A. In societies where collectivism was emphasized, the ties between individuals were loose. B. Low power distance cultures were found in countries that let inequalities grow over time into inequalities of power and wealth. C. Members of high uncertainty avoidance cultures had a strong need for rules and regulations. D. In masculine cultures, little differentiation was made between men and women in the same job. E. Members of low uncertainty avoidance cultures placed a premium on job security, career patterns, and retirement benefits.

Q: Discuss the risks associated with transaction exposure and how to hedge them.

Q: _____ isolated four dimensionspower distance, uncertainty avoidance, individualism versus collectivism, and masculinity versus femininitythat he claimed summarized different cultures. A. Abraham Maslow B. B.F Skinner C. Geert Hofstede D. Michael Porter E. Max Weber

Q: Financial statements in Germany and the United States are: A. vastly different. B. exactly the same, allowing for comparisons. C. the same in all areas except for the income statement. D. the same in only the income statement; they are different in all other areas.

Q: Managers at the Blue Dragon Inc., an international company with operations in China and the United States, are often heard complaining about the difficulties in achieving synergy and cooperation between the employees of both the countries. On extensive research it was concluded that the cultural differences between these countries, which resulted in different work-related values, caused the lack of cooperation. In order to effectively tackle this problem, Blue Dragon Inc. should: A. vary its management process and practices to account for these differences. B. adopt the host countries management processes and practices in both countries. C. opt to exit one of the countries to avoid a conflict. D. provide incentives to the employees based only on their individual performance. E. adopt the home countries management processes and practices in both countries.

Q: Part of the problems with international accounting convergence efforts has to do with: A. cultural differences in value systems between the EU and the United States. B. stubbornness on the part of U.S. negotiators. C. accounting's objectivity. D. difficulties related to quantification.

Q: The recent trend to outsource information technology jobs to countries such as India indicates that: A. the availability of unskilled labor has increased in these countries. B. these countries have benefited by moving toward communism. C. a good education system is a determinant of national competitive advantage. D. the availability of a pool of unskilled labor has reduced in Western countries. E. these countries are taking an advantage of their latitudinal location.

Q: Economic exposure occurs at the operations level and results from: A. poor decision making in foreign markets. B. higher tax rates in foreign operations. C. risks incurred during foreign transactions. D. exchange rate changes on projected cash flows.

Q: When schools emphasize respect for others, obedience to authority, honesty, neatness, being on time, and use a grading system, they are: A. teaching children to be noncompetitive. B. impinging on fundamental freedoms and values. C. indirectly teaching cultural values and norms. D. indirectly creating a rigid caste system. E. unnecessarily deviating from formal education.

Q: Which of the following statements best defines personal space? A. It is the amount of distance to be maintained from the audience in order to be audible to them. B. It is a psychological phase wherein a person has free flowing thoughts. C. In ergonomics, it is the minimum amount of space required by an average employee in order to work efficiently. D. It is the comfortable amount of distance between you and someone you are talking with. E. It is the amount of space a country has per person and is arrived at by dividing the country's total geographical area by its total population.

Q: What is a controlled foreign corporation? A. A foreign company with one major stockholder in a foreign country B. A subsidiary with the parent company having at least 50 percent ownership and control C. An FDI in which foreign owners own the corporation fully D. A centralized structure for foreign ownership

Q: Which of the following is an aspect of nonverbal communication? A. Grammar B. Punctuation C. Speech tone D. Personal space E. Voice modulation

Q: Tax liability on foreign earnings is controlled by: A. the tax treaties in place between the two relevant countries. B. the tax rates in the local jurisdictions. C. how the foreign operations of a company are organized. D. negotiations between the company and the host country.

Q: Jack, the CEO of Silver Touch Inc., raised his eyebrow in surprise at a new employee's valid suggestion to improve the sales turnover. He made a thumbs-up gesture as a sign of approval for the implementation of the employee's suggestion. Jack is typically using: A. spoken communication. B. nonverbal communication. C. explicit communication. D. oral communication. E. grapevine communication.

Q: What is the essential difference between an income tax and a VAT? A. VAT is European; income tax is American. B. VAT is indirect; income tax is direct. C. VAT is greater than income tax. D. VAT is reimbursable; income tax is not.

Q: When a Japanese and a German businessperson get together to do business, it is most likely that they will communicate in _____ . A. French B. Spanish C. English D. Chinese E. Arabic

Q: Regardless of the functional currency, retained earnings are translated at: A. their market value based on recent stock price. B. the rate in effect when the earnings were posted. C. the rate in effect the day of consolidation. D. a reasonable rate of the company's choice.

Q: Chinese is the mother tongue of the largest number of people, but English is the most widely spoken language in the world. This indicates that: A. many people speak English as a second language. B. many native English speakers are learning Chinese. C. the population of native English speakers exceeds that of China. D. Chinese will soon overtake English as the most widely spoken language. E. Chinese is increasingly becoming the language of international business.

Q: Whether the functional currency is local or the parent company's currency, owner's equity is always translated at: A. the rate in effect when the stock was issued. B. the rate in effect the day of the consolidation. C. the rate in effect the day of the journal entry. D. the method of the company's choice, but consistency is required.

Q: _____ is the most widely spoken language in the world, and is increasingly becoming the language of international business. A. Chinese B. French C. English D. Spanish E. German

Q: The key issue related to translation exposure is: A. the local interest rates. B. what method to use for the translation, current rate or temporal. C. strategic planning. D. A and C.

Q: _____ is the mother tongue of the largest number of people in the world. A. Chinese B. Hindi C. English D. Spanish E. French

Q: Economic exposure results from: A. exchange rate variations on projected cash flows. B. operating exposure. C. A and B. D. poor planning.

Q: Which of the following is the cause behind the Basque separatist movement that is going on in Spain for decades? A. Language and culture differences B. Loss of jobs due to increased globalization C. Injustice toward women D. Rigid caste system E. Fight over the use natural resources

Q: Translation exposure would not occur with firms that: A. do not have foreign operations. B. operate in the same currency, their home market currency, everywhere. C. use their home market language in all foreign operations. D. A and B.

Q: A person seeking and receiving help through a guanxi network is: A. liable to a social sanction if he or she does not reciprocate when called upon. B. considered to be disloyal to his or her superiors. C. free from reciprocal obligations. D. not a follower of confucian ethics. E. hesitant to commit to cooperative ventures.

Q: The value-added tax is levied on: A. luxury items and paid by the consumer. B. export items only and thus a direct tax. C. nonessential goods and paid by the consumer. D. all goods and is indirect, collected from the value adder.

Q: Which of the following Confucian ethics is central to the Chinese concept of guanxi? A. Holding all material possessions in trust for God B. Renunciation of the material world C. Devoting life to a spiritual quest D. Reciprocal obligations E. Individual progress

Q: Swap contracts are agreements to exchange: A. currencies at specified rates at specified times in the future. B. equity shares in the future at today's rates. C. supplier information to ensure competitive pricing. D. B and C.

Q: In a Confucian culture, loyalty of the subordinates to their superiors should be: A. absolute and blind in nature. B. reciprocated by the superiors by bestowing blessings on them. C. free of expectations of reward and personal gain. D. aimed at attaining spiritual perfection. E. based on the superiors' spiritual achievements.

Q: Why is a currency option sometimes preferred to a forward market hedge? A. It is an optional contract, so the company could not exercise it and be able to benefit from upside swings in the foreign currency value. B. The rates are cheaper. C. Currency options are available for longer periods. D. The IRS favors currency options for tax credits when they are exercised.

Q: China Innovation Inc. is a devout follower of Confucian ethics. Hence, it hires people who live by similar principles. Which of the following is most likely to be a characteristic of this company? A. The conflict between management and labor will be high in China Innovation Inc. B. The company's management will expect blind loyalty from the workers. C. China Innovation Inc. will often indulge in violations of business agreements. D. The cost of doing business will be low for those companies that enter into a business with China Innovation Inc. E. China Innovation Inc. will not have any relationship networks that are supported by reciprocal obligations.

Q: In a forward market hedge for transaction exposure, the firm sells forward: A. foreign currency receivables for the home currency, matched to the due date of the receivables. B. domestic currency receivables for the foreign currency, matched to the due date of the receivable. C. its anticipated sales in the foreign currency. D. its projected earnings in the foreign currency, which will be repatriated.

Q: Which of the following statements is true of Confucianism? A. Confucianism is a religion principally followed in China, Korea, and Japan. B. Confucianism preaches about the supernatural, the concept of a supreme being, and afterlife. C. Confucian ethics raise the costs of doing business in China, Japan, South Korea, and Taiwan. D. Conflict between management and labor tends to be high in the countries that follow Confucianism. E. In Confucian thought, loyalty to ones superiors is regarded as a sacred duty.

Q: Exposure netting is a transaction exposure hedging technique that is similar to: A. leading and lagging. B. a forward market contract. C. multilateral netting. D. a spot currency contract.

Q: _____ is not concerned with the supernatural, has little to say about the concept of a supreme being or an afterlife, and believes that loyalty to ones superiors is an absolute obligation. A. Buddhism B. Christianity C. Hinduism D. Confucianism E. Islam

Q: One way to avoid transaction exposure is to: A. issue all bonds in the home currency. B. use home-country currency for all transactions. C. hedge the risk by a forward money market contract. D. A and C.

Q: Which of the following is a non-religious system of ethics that considers the values of loyalty, reciprocal obligations, and honesty in dealings with others central to its ideology? A. Buddhism B. Christianity C. Hinduism D. Confucianism E. Judaism

Q: Microloans are usually: A. loans made in small, developing economies. B. loans made to small, entrepreneurial businesses. C. small loans made to small businesses, usually in developing countries. D. pharmaceutical-backed loans.

Q: _____ is a non-religious, ethical system principally followed in China, Korea, and Japan. A. Shinto B. Buddhism C. Judaism D. Confucianism E. Hinduism

Q: Transaction exposure occurs when: A. the value of the currency changes between when the asset or liability is recorded and when results are consolidated. B. the firm has transactions in a foreign currency. C. the firm's strategic projections use a currency value that has changed. D. the recorded value of an asset or liability changes between its being reported and its consolidation.

Q: For more than 2,000 years until the 1949 Communist revolution, _____, which teaches the importance of attaining personal salvation through right action, was the official ethical system of China. A. Maoism B. Feng Shui C. Confucianism D. Shinto E. Buddhism

Q: Foreign exchange riskstransaction, translation, or economicare caused most directly by: A. unanticipated political actions by foreign governments. B. anticipated movements in interest rates in foreign economies. C. trade-related distribution risks such as weather, the price of fuel, and transport strikes. D. unanticipated movements in exchange rates.

Q: Sami follows a religion founded by an Indian princeSiddhartha Gautama. Unlike the other Indian religions his religion does not propagate the caste system. Also, his religion emphasizes right seeing, thinking, speech, action, living, effort, mindfulness, and meditation as a route for spiritual transformation. According to this information, Sami can be considered as a: A. Hindu. B. Buddhist. C. Confucian. D. Sikh. E. Muslim.

Q: Which of the following statements is true about Buddhism? A. Buddhism was founded in the fifth century b.c. by Kung- Fu-tzu, in China. B. The emphasis on wealth creation that is embedded in Protestantism is not found in Buddhism. C. Buddhism advocates the kind of extreme ascetic behavior that is encouraged by Hinduism. D. Like Hinduism, Buddhism also supports the caste system. E. Unlike Hinduism, Buddhism does not stress afterlife and spiritual achievement.

Q: Leading and lagging is a practice: A. of timing, leading with receivables in a weakening currency and payables in strengthening currencies. B. a defensive marketing strategy with finance implications. C. of interest rate manipulation, borrowing in low-rate environments and lending in high-rate environments. D. of leading with payables in weakening currencies and with receivables in strengthening currencies.

Q: What is the purpose of multilateral netting? A. To increase market penetration B. To increase levels of standardization C. To decrease inflation risk D. To reduce transaction costs and increase efficient use of funds

Q: What is the common aspect of the teachings of Hinduism and Buddhism? A. Both stress the afterlife and spiritual achievement rather than material progress. B. Both support the existence of caste system. C. Both advocate the same kind of extreme ascetic behavior. D. Both propagate the Noble Eightfold Path as a route for transformation. E. Both condemn the payment or the receipt of interests on loans and deposits.

Q: The following conditions led to the establishment of international finance centers: A. the end of the gold standard and the Bretton Woods Accord. B. WTO guidelines and IMF regulations. C. floating exchange rates and growth in the FX markets. D. growth of sustainable business practices and social responsibility.

Q: _____ was founded in India in the sixth century b.c. by Siddhartha Gautama, an Indian prince who renounced his wealth to pursue an ascetic lifestyle and spiritual perfection. A. Hinduism B. Buddhism C. Confucianism D. Islam E. Judaism

Q: Firms have developed international finance centers in order to: A. centralize the financial management function and thereby reduce costs and increase both profits and efficiencies. B. meet WTO guidelines. C. compete with international banks. D. facilitate interfirm and intrafirm transfer pricing.

Q: Maya is a follower of a religion which emphasizes that individuals should be judged solely by their spiritual achievements. The caste Maya belongs to is of the highest order in her religion, and hence is highly respected. She also firmly believes that she was born into the high caste as a result of her spiritual development in her previous life. Maya follows: A. Hinduism. B. Buddhism. C. Confucianism. D. Islam. E. Christianity.

Q: Please provide an overview of the major issues a compensation package for expatriates should address.

Q: Zain finds it hard to dine with his American colleagues as his religion prohibits the consumption pork and alcohol. He also quit his previous job in a bank on the base that his religion considers the payment or receipt of interest as exploitative and unjust. According to this information, Zain is a follower of: A. Protestantism. B. Hinduism. C. Judaism. D. Confucianism. E. Islam.

Q: What challenges often confront the spouses of expatriates, and what options are available for managing these challenges?

Q: Hindus see mobility between castes as something that can be achieved through: A. appropriate schooling and occupation. B. individual economic achievements over the course of one's lifetime. C. spiritual progression and reincarnation. D. hard work that results in gradual upward mobility over generations. E. offering prayer five times a day, and by refraining from the payment or receipt of interest.

Q: What are the primary opportunities and challenges associated with expatriate positions?

Q: Max Weber argued that the ascetic principles embedded in _____ do not encourage entrepreneurial activity in pursuit of wealth creation because it is perceived that such activities make the attainment of nirvana more difficult. A. Islam B. Hinduism C. Confucianism D. Protestantism E. Capitalism

Q: According to Hinduism, the way to achieve spiritual perfection is: A. to lead a severe ascetic lifestyle of material and physical self-denial. B. to immerse oneself in creation of wealth to be used to aid the disadvantaged. C. through hard work, wealth creation, and frugality. D. to earn legitimate profits through trade and commerce. E. to oppose the caste system by allowing mobility between castes.

Q: Discuss the advantages and disadvantages of employing third-country managers.

Q: Which of the following statements is true about Hinduism? A. Hinduism supported India's caste system. B. Hinduism allows mobility between castes within an individuals lifetime. C. Max Weber argued that Hinduism encourages entrepreneurial activity. D. Hindus do not believe in reincarnation, or rebirth into a different body, after death. E. Hinduism was founded by Siddhartha Gautama, an Indian prince.

Q: Explain the ethnocentric, polycentric, regiocentric, and geocentric approaches toward international human resource management, including when and how each is best used.

Q: Explain what a "global mindset" includes and why this may be important for international companies and their managers.

Q: Many _____ believe that the way to achieve nirvanaa state of complete spiritual perfection is to lead a severe ascetic lifestyle of material and physical self-denial, devoting life to a spiritual rather than material quest. A. Christians B. Hindus C. Muslims D. Protestants E. Confucians

Q: Executive compensation packages sometimes include payments called perks that are extras and are: A. usually illegal. B. always legal. C. uncommon. D. symbols of rank in the company hierarchy. E. none of the above.

Q: Dharma, karma, and nirvana are terms related to: A. Confucianism. B. Hinduism. C. Judaism. D. Islam. E. Protestantism.

Q: International status is the status of: A. every expatriate employee. B. third-country nationals. C. employees of international organizations. D. the IC employee who is receiving all applicable allowances and bonuses plus perks. E. two of the above.

Q: Which of the following religions does not owe its founding to any one particular individual? A. Buddhism B. Hinduism C. Christianity D. Islam E. Confucianism

Q: Nancy Adler's research suggests that women: A. will never get to the top because they take time-out for children. B. are more likely than men to succeed if they quit the company and start their own businesses. C. have been remarkably successful in international assignments, which does not seem to be related to gender. D. are less likely than men to succeed in international assignments. E. two of the above.

Q: _____ began in the Indus Valley in India, and is the worlds oldest major religion. A. Judaism B. Hinduism C. Buddhism D. Islam E. Confucianism

Q: With regard to the use of women versus men for expat management assignments: A. few qualified women candidates are available. B. few women candidates are accepting assignments and enjoying the experience. C. those women who go into expatriate positions tend to do well. The hurdle is in getting the assignment. D. the women expatriates are making more money than their male counterparts. E. two of the above.

Q: Which of the following is true about the Islamic banking method the mudarabah? A. A mudarabah contract is similar to a profit-sharing scheme. B. Under mudarabah, when an Islamic bank lends money to a business, it charges interest on the loan. C. It is the most widely used banking method among the worlds Islamic banks, primarily because it is the easiest to implement. D. It has been proven that a mudarabah contract discourages both long-term savings and long-term investment. E. A mudarabah contract uses a price markup method to make profits.

Q: Home leave is: A. a standard allowance. B. a bonus standard for every employee. C. a periodic trip back to the home country made by employees and their families. D. an encouragement for the employee to travel outside the home country. E. two of the above.

Q: "Mudarabah" and the "murabaha" are: A. Islamic banking methods. B. Arabic words for interest and profit, respectively. C. banking practices that are prohibited by Islam. D. laws governing international trade and commerce in Islamic countries. E. laws limiting the right to private property.

Q: Contract termination payments are: A. made to induce the employee to quit. B. made to induce the employee to work out the contract term. C. frequently made for work in hardship areas. D. two of the above. E. none of A, B, and C.

Q: A major distinction between a conventional bank and an Islamic bank is that: A. Islamic banks are allowed to charge higher interest rates on loans. B. Islamic banks cannot accept private deposits. C. Islamic banks cannot pay or charge interest. D. Islamic banks are not subject to any form of law. E. Islamic banks are supposed to refrain from making a profit through any source.

Q: _____ are paid by firms in recognition of the fact that expatriates and their families undergo some hardships and inconveniences and make sacrifices while living abroad. A. Bonuses B. Allowances C. Perks D. Tax exemptions E. Two of the above

Q: Which of the following does Islam prohibit? A. Right to private property B. Free enterprise and earning profit through trade and commerce C. Charitable acts toward the disadvantaged D. Earning profits by breaking contractual obligations E. Market-based economic systems

Q: For cost-of-living allowances, the U.S. State Department index: A. is suitable for all locations. B. is adjusted frequently. C. neither A, B, nor D. D. accounts adequately for inflation and currency value changes. E. two of A, B, and D.

Q: Muslim countries are likely to be receptive to international businesses as long as those businesses: A. behave in a manner that is consistent with Islamic ethics. B. do not hold affiliations with supranational organizations like the WTO or IMF. C. adopt western ideologies of doing business. D. generate income in the form of interest on the loans. E. do not undertake any charitable activities because Islam has very strict rules about the way these activities should be conducted.