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quiz pdf.final

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markjosephladao14
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BIT INTERNATIONAL COLLEGE

CITY OF TAGBILARAN

QUIZ
STRATEGIC MANAGEMENT

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I.Instructions: Choose the best answer for each question. Answer directly.
1. What is foreign exchange risk?
a) The risk of losing money due to changes in the value of currencies.
b) The risk of being unable to find a buyer for your product in a foreign market.
c) The risk of political instability affecting your business operations.
2. Which of the following is NOT a factor that can influence exchange rates?
a) Interest rates
b) Inflation
c) The weather
3. What is political risk?
a) The risk of a company's operations being disrupted by political events.
b) The risk of a country's government changing its policies.
c) Both a and b.
4. Which of the following is an example of political risk?
a) A country's government nationalizing a foreign-owned company.
b) A country's currency depreciating against the US dollar.
c) A company's product being banned in a foreign market.
5. How can companies mitigate foreign exchange risk?
a) By hedging their currency exposures.
b) By diversifying their operations.
c) Both a and b.
6. What is a currency hedge?
a) A financial instrument that protects against losses due to currency fluctuations.
b) A strategy for investing in a foreign country's currency.
c) A way to reduce the cost of exporting goods.
7. What is a political risk assessment?
a) A process for evaluating the potential risks associated with a country's political
environment.
b) A strategy for managing political risk.
c) A way to measure the stability of a country's government.
8. Which of the following is NOT a method for mitigating political risk?
a) Diversifying investments.
b) Building strong relationships with local governments.
c) Investing in a country with a weak legal system.
9. What is the difference between foreign exchange risk and political risk?
a) Foreign exchange risk is related to currency fluctuations, while political risk is related
to political events.
b) Foreign exchange risk is easier to manage than political risk.
c) Foreign exchange risk is more common than political risk.
10. How can companies benefit from using international strategies?
a) By accessing new markets and customers.
b) By reducing costs through outsourcing or offshoring.
c) Both a and b.

11. What are some of the challenges associated with using international strategies?
a) Foreign exchange risk.
b) Political risk.
c) Both a and b.
12. What is the relationship between foreign exchange risk and political risk?
a) Political risk can increase foreign exchange risk.
b) Foreign exchange risk can increase political risk.
c) There is no relationship between the two.
13. What is the best way to manage foreign exchange and political risk?
a) By avoiding international strategies altogether.
b) By carefully assessing and mitigating the risks.
c) By hoping for the best
14. What is the role of insurance in managing foreign exchange and political risk?
a) Insurance can help companies protect themselves from losses due to currency
fluctuations or political events.
b) Insurance is not a viable option for managing these risks.
c) Insurance is only useful for large multinational companies.
15. What is the most important factor to consider when deciding whether or not to use
international strategies?
a) The potential for profit.
b) The level of foreign exchange and political risk.
c) The availability of skilled labor.
II. True or false
Instructions: Read each statement carefully and determine if it's true or false.

1. Foreign exchange risk is the risk of losing money due to changes in the value of
currencies.
2. Political risk only affects companies operating in unstable countries.
3. Hedging can completely eliminate foreign exchange risk.
4. Diversifying investments can help mitigate both foreign exchange and political risk.
5. True or False: Companies should avoid international strategies altogether if they are
concerned about foreign exchange and political risk.

III. ESSAY (5pts)

What have you learned about the discussion.

"The only way to do great work is to love what you do." - Steve Jobs

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