1.A mutual fund that buys stock in foreign companies to diversify its holdings w

Question

1.A mutual fund that buys stock in foreign companies to diversify its holdings without expecting to exercise any control over the companies engages in foreign:

a.direct investment

b.flight capital

c.portfolio investment

d.franchising

2. Licensing is when a firm:

a.buys products from another firm in another country

b. grants the use of intellectual property to another firm

c.purchases foreign financial assets for a purpose other than control

d. sells some products to another firm in another country

3. A firm that switches from FIFO to LIFO changes the way it:

a. moves its inventory

b.warehouses its inventory

c.values its inventory

d.counts its inventory

Explanation / Answer

1) the answer is C i.e portfolio investment becasue the company is not seeking any control or authority in the foreign companies. Direct investment would mean direct setup in foreign company maybe factory or offcie but this is not the case.

2) the answer is B i.e grants the use of intellectual property to another firm, licencing means that you can given licence to somebody else to maybe copy your product or you have given process knowledge to other company.

3) the answer is C i.e values its inventory, LIFO and FIFO are cost layering methods are used to value the cost of goods sold and ending inventory. FIFO means first in first out and means that goods first added in the inventory are assumed to be the first goods removed from inventory for sale.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.