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MB0053_Model QP

Sikkim Manipal University

MBA 4th semester Model Question Paper International Business Management MB0053 Total marks: 140 marks
Note: 1. Question paper has three parts i.e. Part A, Part B and Part C (Totally 75 questions) 2. Part A consist 40 questions of 1 mark each 3. Part B consist 20 questions of 2 marks each 4. Part C consist 15 questions of 4 marks each 5. All questions have multiple choices 6. All questions are compulsory

PART A (One mark questions)

1. _________ analysis is the evaluation of possible risks and rewards from business experiences in a country. A. Transfer risk B. Location risk C. Country risk D. Exchange risk

2. Which one of the following splits the countries according to the observed performance and an automatic rating system can be applied to similar countries? A. Exposure limit B. Peer analysis C. External environment D. Dependency level

3. ___________ risk is based on a governments inability to meet its loan obligations. A. Sovereign B. Political C. Economic D. Exchange

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4. Which type of marketing is complex when a firm engages in marketing operations with many countries? A. International marketing B. Domestic marketing C. Global marketing D. Multinational marketing

5. When a car manufacturer manufactures cars in the home country and directly ships them to a foreign country can be an example for _____________. A. Joint venture B. Direct exporting C. Predictable trading D. Indirect exporting

6. The level of risk in ____________________ is more when compared with exporting as the company has limited control. A. Direct investment B. Joint venture C. Transfer pricing D. International advertising

7. A firm should carefully look at their ________________________ and global marketing strategy in order to succeed. A. Product positioning B. Liability C. Geographic expansion D. Diversifying markets

8. Expand GATT. A. Global Agreement of Trade and Tariffs B. Government Acceptance Test Team

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C. Geneva Agreement of Tariff and Trade D. General Agreement of Trade and Tariffs

9. The principle of ______________ states that all equally positioned tax payers should contribute in the cost of operating the government according to the equal rules. A. Tax equity B. Tax neutrality C. Double taxation D. Taxation

10. Which among the following international financial markets includes private placements, bond and equities? A. Foreign currency markets B. International capital markets C. International security markets D. International money markets

11. TPM refers to A. Transfer Process Methodology B. Transfer Pricing Manipulation C. Treaty for Private Management D. Tariff for Processed Materials

12. What is the type of risk that occurs due to the requirement of available counterpart to take the other side of trade? A. Liquidity risk B. Credit risk C. Market risk D. Legal risk

13. The comparison of a nations obligations to service and repay foreign debt with its FOREX earnings shows its ability to remain _____________________.

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A. Insolvent B. Passive C. Active D. Solvent

14. Domestic rivalry creates pressure to innovate, improve quality, and reduce costs which in turn helps to create world-class ___________________. A. Competitors B. Business C. Market D. Economic environment

15. Which of the following refers to the process of settlement of disputes by having independent referees, who are agreeable to both sides, adjudicate the matter? A. Mercantilism B. Litigation C. Arbitration D. Code law

16. ________ is measured in terms of local currency and adjusted for inflation. A. Market growth B. Income levels C. Sector wise trends D. Openness of the economy

17. International Financial Reporting Standards (IFRS) are followed by the _______________. A. International Accounting Standards (IAS) B. Standing Interpretations Committee (SIC) C. International Accounting Standards Board (IASB) D. International Accounting Standards Committee (IASC)

18. What is the other name for C2C model?


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A. Peer to Peer exchanges B. Care to Customer model C. Customer to Client interchanges D. Community to Community interactions

19. Which of these has parallel responsibility of IASCs objective of developing international guidelines for auditing, ethics, education and management accounting? A. European Union (EU) B. International Federation of Accountants (IFA) C. United Nations (UN) D. Organisation for Economic Cooperation and Development (OECD)

20. What indicates the differences between Domestic Accounting Standards (DAS) and International Accounting Standards (IAS) based on different rules on the same accounting issue? A. Indulgence B. Accounting C. Presence D. Divergence

21. Which of the following is one of the main dimensions of international human resource management? A. Employee expense B. Management style C. Countries of operation D. Legal factors related to workforce

22. ________________ of an international business plays a very important role in realising the goals of the company. A. Structural components B. Time zone C. Business structure

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D. Organisational structure

23. In ethnocentric approach, _________________________ are from the parent country. A. Key managers B. Technical workforce C. Engineers D. Programmers

24. Risk management is an integral part of the _________________ policies. A. Employee relations B. International Human Resource Management (IHRM) C. Human Resource Management (HRM) D. International Business Management (IBM)

25. Expand EFTA. A. European Free Trade Association B. Eastern Freight Trading Agency C. East-Asian Foreign Trade Agreement D. Emerging Foreign Trading Alliances

26. What is the term used when a company exports services or goods to other countries? A. National business B. Globalisation C. International business D. Legal framework

27. In a _____________________ competitive industry, a companys business gets affected by the changing environments in different countries. A. Global B. Multinational C. Domestic D. Local

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28. What term is used for a joint venture done with an existing competitor? A. Foreign direct investment B. Strategic alliance C. Exports strategy D. Trade blocs

29. Expand OECD. A. Open Environmental and Cultural Disputes B. Outstanding Economic and Cultural Directives C. Operations in Eastern Community Development D. Organisation for Economic Cooperation and Development

30. A business deals with ____________________ culture in its domestic market. A. Homogenous B. Heterogeneous C. Exogenous D. Indigenous

31. This country is an active member of OPEC A. Portugal B. United Kingdom C. Saudi Arabia D. India

32. Which of these bodies have categorised country risk assessment methods into four types? A. US EXIM Bank B. NABARD C. IDH D. World Trade Organisation

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33. Which one of the following is an example of a rating agency? A. Basel Committee B. Economist Intelligence unit C. WTO D. NAFTA

34. Country risk analysis regulates the estimated ____________ and explores the main techniques used to measure a countrys overall riskiness. A. Gross Domestic Product (GDP) B. Economic factors C. Policies D. Cash flows

35. _______________ analysis is used to survey countries where the firm is engaged in international business and avoids countries with excessive risk. A. Exchange risk B. Country risk C. Transfer risk D. Location risk

36. The ________________ method uses a uniform format with predetermined scope. A. Structured qualitative B. Checklist C. Fully qualitative D. Delphi

37. The term ________________ refers to the complete range of strategic decision-making activity in an organisation. A. Strategic management B. Strategic analysis C. Strategic planning D. Strategic competitiveness

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38. Which of the following planning processes is for six months to two years? A. Intermediate planning B. Strategic planning C. Short-term planning D. Long-term planning

39. Strategic formulation is the _________________ phase in the strategic management process. A. Final B. Initial C. Second D. Intermediate

40. This focuses on the level of equality or inequality that exists between individuals in the society of a country. This is referred to as A. Uncertainty Avoidance Index B. Individualistic control C. Long-term Orientation D. Power Distance Index

PART B (Two marks questions)

41. The ratio of a countrys______________ and _____________ to its Gross National Product (GNP) indicates its vulnerability to fluctuations in international trade. A. Degree of urbanisation, balance of payments B. Imports, exports C. Openness of the economy, international debt D. Market growth, income levels

42. Which among these are considered as arbitration bodies? A. International Chamber of Commerce and WTO

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B. American Arbitration Association and American Government C. ICSID and London Court of Arbitration D. International Court of Justice and United Nations

43. There are two types of political risks namely ___________ and __________ risks. A. Macro, Micro B. Major, Minor C. Homogeneous, Heterogeneous D. Internal, external

44. Sony Ericsson has its headquarters in ____________ and research and development setup in USA and ______________. A. Germany, India B. India, Australia C. Sweden, India D. France, China

45. Identify the true (T) and false (F) statements. 1. A subsidiary of a company cannot be formed from scratch. 2. Most developed countries face challenges in sourcing workforce as the average age of the population is getting older. A. 1T, 2T B. 1T, 2F C. 1F, 2F D. 1F, 2T

46. Which among the following are the skills that have to be possessed by a MNC manager? a. Respecting and sharing each other's skills b. Establishing and applying formal structures c. Identifying the importance of informal structures d. Down-playing the importance of cultural diversity A. Statements a and d only

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B. Statements b and c only C. Statements c and d only D. Statements a and b only

47. Apart from law, which are the two factors that influence the ethics of a business and its managers? A. Corporate goals, culture B. Religion, behaviour C. Religion, culture D. Fundamental principles, climate

48. The most prominent issues that managers in MNCs operating in foreign countries face are _____________ and ______________. A. Bribery, corruption B. Theft, bribery C. Racism, corruption D. Racism and gender bias

49. Despite the differences in religious teachings, religions agree on the _____________________ and ______________. A. Fundamental principles, standards B. Religions, cultures C. Values, standards D. Fundamental principles, ethics

50. When and where was IMF created? A. 1944 at Bretton Woods International conference B. 1956 at International Accounting Standards committee C. 1960 at GAAP final meeting D. 1949 at International Standards of Accounting and Reporting Council


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51. Establishment of ______________ and _____________ is one of the objectives of a well designed organisational structure. A. Reporting hierarchy, accountability B. Internal environment, external environment C. Regional structure, international matrix structure D. Region-centric approach, geocentric approach

52. Which of the following aspects are covered under cross-border valuation and financing? 1. The association of firms with local firms. 2. The assessment of investments in order to raise the markets. 3. The differences in legal rules. 4. The consideration on the price of capital around the world. A. 1 and 2 only B. 1 and 3 only C. 2 and 3 only D. 2 and 4 only

53. The aim of business is to attract and retain a customer, which can be done through ____________ and _____________. A. Product marketing, product support B. Product marketing, product differentiation C. Price competition, product differentiation D. Cost discounts, product marketing

54. Operating in ___________________ depends on the level of control on the operations in the foreign country and it also depends on the ___________________________. A. Foreign market, capital expenditure B. Global marketing, international approval C. Divergence, capital expenditure D. Foreign market, global marketing

55. Identify the true and false statements.


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1. A GAP analysis is a simple tool that helps the planning team to allocate resources to firms. 2. Top-down planning helps to maintain the decision-making process at the senior level. A. 1 True, 2 True B. 1 False, 2 True C. 1 True, 2 False D. 1 False, 2 False

56. Which of the following are the objectives of Gulf Cooperation Council? 1. Formulate scientific research centres. 2. Strengthen business liberalisation. 3. Encourage cooperation of private sector. 4. Improve the levels of productivity and quality. A. 1 and 2 only B. 1 and 3 only C. 2 and 3 only D. 2 and 4 only

57. Apart from packaging, the pre-shipment credit is mainly used for which of the following two purposes? A. Profit Analysis, Customs charges B. Production, Transport C. Production, Processing D. Processing, Export subsidies

58. Regional understanding is a strategy that has __________________ and __________________ forms. A. Globalisation, global sourcing B. Corporate governance, competitiveness C. Telecom, ITES D. Macroscopic, microscopic


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59. According to Standard and Poors credit rating system, a credit rating of BBB and CCC respectively indicates A. Uncertainties leading to inadequate capacity to pay; Vulnerable to default B. Vulnerable to default; In payment default C. Adequate capacity to pay; Vulnerable to default D. Strong capacity to pay; In payment default

60. The two implementation models related to the business to consumer (B2C) are _____________ and _____________. A. Generic B2C model, Dedicated B2C model B. Generic B2C model, Direct B2C model C. Dedicated B2C model, Online B2C model D. Direct B2C model, Online B2C model

PART C (Four marks questions)

61. Match the following: Part A a. Quality b. Forfaiting c. Export production d. Factoring

Part B 1. Purchase of an exporters receivables 2. Modernising and upgrading the test houses and laboratories 3. To realise cash immediately 4. Sharpen the competitive edge A. a-2, b-1, c-4, d-3 B. a-3, b-4, c-1, d-2 C. a-4, b-3, c-2, d-1 D. a-1, b-2, c-3, d-4

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62. Match the following: Part A a. Cash-in-Advance b. Freight prepaid c. Bankers acceptance d. Import of second hand capital goods

Part B 1. Credit instrument developed by the non-financial firm and guaranteed by a bank for payment 2. Removing the risks of credit by the exporter 3. Minimum residual life of five years 4. Paid for the shipper A. a-1, b-3, c-4, d-2 B. a-2, b-4, c-1, d-3 C. a-4, b-2, c-3, d-1 D. a-3, b-1, c-2, d-4

63. Identify the true (T) and false (F) statements: 1. It is important to set the globalisation parameters after setting the localisation and regionalisation parameters. 2. The customers select the product by seeing all the information about the product on the internet. 3. The micro factors determine the environment in which the organisation functions. 4. The mission statement describes what the leaders of an organisation see in the future. A. 1T, 2F, 3F, 4T B. 1F, 2F, 3T, 4T C. 1T, 2T, 3F, 4F D. 1F, 2T, 3T, 4F

64. Identify the true (T) and false (F) statements.


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1. Regional integration reflects a country's willingness to share or unify as a whole. 2. The level of integration of a country with other countries is determined by what it shares and how it shares. 3. Policy makers make use of the wealth of knowledge that is made possible by the rise of global economy. 4. Regional integration provides some sort of reduction on tariffs and prohibitions. A. 1T, 2T, 3F, 4F B. 1F, 2T, 3F, 4T C. 1T, 2T, 3T, 4T D. 1F, 2F, 3T, 4T

65. Which of the following risks associated with a country help in country risk analysis? 1. Transfer risk 2. Location risk 3. Attitude risk 4. Sovereign risk 5. Historical risk 6. Political risk A. 1, 2, 3, 4, 5 only B. 2, 3, 4 only C. 1, 2, 4, 6 only D. 4, 5, 6 only

66. Mr. Lakhan is a realty broker and deals with purchase and sale of properties especially for middle-east clients. He also engages in purchase of securities in Dubai and would immediately sell them in Indian market, thereby earning profits from the difference. This type of transaction can also be called as A. Equity B. Hedging C. Liquidity D. Arbitrage


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67. From the following, identify the country risk assessment methods that are classified by the US EXIM bank 1. Checklist method 2. Data sourcing 3. Delphi technique 4. Regression tree method 5. Inspection visits 6. ERP method A. 1, 2, 4, 5 only B. 2, 3, 4 only C. 1, 2, 4, 6 only D. 1, 3, 5 only

68. Identify the true (T) and false (F) statements. 1. WTO is regarded as the predecessor of GATT. 2. WTO was established on 1st January 1996. 3. Green room negotiations are informal negotiation meetings at the WTO. 4. ILO is another name for WTO. A. 1T, 2T, 3F, 4F B. 1F, 2T, 3F, 4T C. 1T, 2T, 3T, 4T D. 1F, 2F, 3T, 4F

69. If ABC Company is interested to invest in its foreign business operations, in which of the following ways could ABC Company make foreign direct investments? 1. Franchising 2. Licensing 3. Acquisition 4. Joint Ventures 5. Exporting 6. Whole owned subsidiary A. 1, 2, 4, 5 only

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B. 2, 3, 4 only C. 3, 4, 6 only D. 1, 3, 5, 6 only

70. Match the following: Part A a. International business b. Global marketplace c. Multinational strategies d. Trading blocs

Part B 1. Good product, right strategy and an appetite to take risk 2. Countrys market needs treated as self contained 3. Eliminates investment barriers 4. Involves cross-border transactions A. a-1, b-3, c-2, d-4 B. a-4, b-1, c-2, d-3 C. a-3, b-4, c-1, d-2 D. a-2, b-1, c-4, d-3

71. Match the following: Part A a. Outright cash b. Swap c. Spot contract d. Forward contract

Part B 1. Foreign exchange currency deals take places on the date of deal 2. Simultaneous sale and purchase of identical amounts of currency for different maturities 3. Buying or selling a definite amount of foreign currency at the existing market

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4. Buying and selling foreign currency amounts at the pre-agreed rate of exchange on or before a certain date A. a-1, b-4, c-3, d-2 B. a-3, b-2, c-4, d-1 C. a-1, b-2, c-3, d-4 D. a-4, b-1, c-2, d-3

72. Geocentric approach of international business is based upon which of the following assumptions? 1. Host country employees will not be in good terms with their foreign managers. 2. There will be non-availability of highly skilled employees at the subsidiaries. 3. Ambitious mangers will try to move to other multi-national companies after global experience. 4. Mangers will adapt themselves to different countries after international exposure over a period of time. A. 1 and 2 only B. 2 and 3 only C. 1, 2 and 3 only D. Only 4

73. Arrange the following in ascending order of their formation/occurrence 1. GATT 2. WTO 3. IBRD 4. World War I 5. British East India company A. 5, 4, 3, 1, 2 B. 4, 5, 1, 3, 2 C. 2, 1, 4, 3, 5 D. 1, 5, 4, 2, 3


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74. A developing country has taken huge amounts of loans and funds from IMF. The country has done well in the past years but presently its position is critical due to the instability in the political and economic conditions. Standard and Poors rating of the countrys credit worthiness is that the country has the capacity to pay in the current situations but it has greater vulnerability to default. What is the rating given by the agency? A. Grade B B. Grade D C. Grade C D. Grade BB

75. Identify the benefits of international business from the following: 1. Exploitation of labour 2. Low cost of production 3. Utilisation of valuable resources 4. Diversifies risk 5. Large customer base 6. Hampers domestic business growth A. 1, 2, 3 only B. 2, 3, 4, 6 only C. 4, 5, 6 only D. 2, 3, 4, 5 only