Reference no: EM133200955

Answer TRUE OR FALSE

1. The term used by the United Nations as a synonym for multinational enterprise is transnational company.

2. ECI insures exporters against the loss or damage of their export products.

3. A multinational enterprise (MNE) is best defined as a firm with foreign direct investments

4. Managers who are knowledgeable about geographic factors are better able to identify the location, quantity, quality, and availability of the world's natural resources.

5. It is rare for a new company to locate its operations near competitors and suppliers.

6. Natural disasters like floods, fires and earthquakes are not covered under the commercial risk in an ECI.

7. Losses due to the fault of exporter, agent or administrator and claims not filed timely are covered under the commercial risk in an ECI.

8. ECAs can be quasi-governmental agencies or even private organizations-including the arms of commercial financial institution who can help find overseas markets for the country's companies.

9. Based on the 2010 INCOTERM update, the division of INCO definition in group D assumes that the BUYER is obliged to deliver the goods to a specific place or the port of destination. This group includes such Incoterms as DUI, DAR, and DNR.

10. An ETC does not handle the legal requirements throughout the exporting process in providing support to firms specializing in exporting.

11. One of the fundamental obligation of the buyer is to pack and label the goods to ensure their safe delivery.

12. First conceived by International Chamber of Commerce (ICC) in 1921 and implemented starting from 1936, INCO terms as per 2010 update has four groups namely, F,C,A and D.

13. In Direct Lending to the buyer, an ECA can extend amortized loans to the importer even if the importer does not belong to the same country as the ECA.

14. One of the fundamental obligation of the seller in a trade transaction is to supply the correct quantity, quality and value of goods in accordance to the buyer's order.

15. In the past, international trade and investment activities were mainly conducted by companies that sold services.

16. In the INCOTerms under group C, there are 11 types that describe the contract for carriage without assuming risk of loss during shipment.

17. For internationalizing firms, the consequences of poor business management decisions are usually more costly when mistakes occur abroad than when they occur at home.

18. Services are the fastest growing sector in international trade.

19. FDIs promotes international trade as it allows production to flow to parts of the world which are more cost effective.

20. Managers need to understand not only the laws of countries where they operate, but also how those laws are enforced.