International Investments: Factors, Types, and Risks for Business Administration

Question 1

Which of the following is NOT a primary factor influencing foreign investment decisions?

Accepted Answer

Cultural preferences

Answer

Political stability

Answer

Economic growth prospects

Answer

Currency exchange rates

Question 2

Which of the following is a political risk specifically associated with international investment?

Accepted Answer

Expropriation

Answer

Currency devaluation

Answer

Inflation

Answer

Technological obsolescence

Question 3

Which of the following is NOT a significant challenge associated with investing in emerging markets?

Accepted Answer

Well-developed legal frameworks

Answer

Political instability

Answer

Currency volatility

Answer

Lack of reliable financial information

Question 4

What is the term used to describe the relocation of production facilities or services to a country with lower labor costs?

Accepted Answer

Offshoring

Answer

Outsourcing

Answer

Nearshoring

Answer

Reshoring

Question 5

What is the primary function of the International Monetary Fund (IMF) in the context of international investment?

Accepted Answer

Promoting global economic stability through surveillance and policy advice

Answer

Providing financial assistance to developing countries facing economic difficulties

Answer

Regulating currency exchange rates to maintain stability

Answer

Protecting intellectual property rights of foreign investors

Question 6

Which of the following is not an advantage of foreign direct investment for host countries?

Accepted Answer

Deforestation

Answer

Job creation

Answer

Technology transfer

Answer

Increased tax revenue

Question 7

What is the main benefit of international portfolio diversification for investors?

Accepted Answer

Reduced investment risk

Answer

Increased return on investment

Answer

Lower transaction costs

Question 8

Which type of international investment offers investors the most control over a foreign company?

Accepted Answer

Foreign direct investment with a majority stake

Answer

Portfolio investment

Answer

Joint venture with equal ownership

Answer

Minority investment

Question 9

Which potential challenge arises when investing in a country with a different legal system from your own?

Accepted Answer

Contract enforcement difficulties

Answer

Cultural differences

Answer

Language barriers

Answer

Economic instability

Question 10

How do international organizations like the World Bank help reduce risks in international investments?

Accepted Answer

Provide political risk insurance to foreign investors.

Answer

Offer financial aid to developing countries to attract foreign investments.

Answer

Enforce international investment treaties.

Answer

Negotiate trade agreements that benefit foreign investors.

Question 11

Which risk arises from economic downturns in foreign countries?

Accepted Answer

Recession

Answer

Terrorism

Answer

Political instability

Answer

Currency devaluation

Question 12

When evaluating the return on an international investment, which factor is crucial to consider?

Accepted Answer

Currency exchange rate fluctuations

Answer

Local inflation rates

Answer

Cultural differences

Answer

Political stability

Question 13

What is the primary political risk associated with international investment?

Accepted Answer

Expropriation (seizure of assets by the government)

Answer

Interest rate fluctuation

Answer

Inflation

Answer

Currency devaluation

Question 14

Which of the following is NOT a potential challenge associated with investing in foreign markets?

Accepted Answer

Absence of language barriers

Answer

Legal and regulatory complexities

Answer

Currency fluctuations

Answer

Cultural differences

Question 15

What is a key benefit of diversifying investments internationally?

Accepted Answer

Reduced exposure to risks specific to individual countries

Answer

Guaranteed increased return on investment

Answer

Improved liquidity

Question 16

What is the primary role of the International Monetary Fund (IMF) in international investment?

Accepted Answer

To promote international monetary cooperation and financial stability

Answer

To regulate international trade

Answer

To set exchange rates

Answer

To provide financial assistance to developing countries exclusively