1. (2pts) Licensing is an international business method in which involves taking the ownership of foreign operation.

1. True b) False

2. (2pts) Non-U.S. firms may issue _________, which are certificates representing bundles of stock when they sell their stocks in the U.S. stock market.

1. Bankers Acceptance
2. ADRs
3. BWs
4. Euro bonds

3. (2pts) A higher home inflation rate relative to other countries would _______ the home countrys current account balance, as import _______ and exports _________.

1. increase; increase; decrease
2. decrease; increase; decrease
3. increase; decrease; increase
4. decrease; decrease; increase

4. (2pts) Firms typically prefer to invest in countries where the local currency is expected to strengthen against their own.

1. True b) False

5. (2pts) Under direct quotation of foreign exchange rate if the value of euro is changed from $1.26/euro to $1.09/euro, the euro has been appreciated.

1. True b) False