1. In global businesses, arbitrage is

a. Creating sustainable global competitive advantages

b. Exploitation of differences between national or regional markets

c. Having good understandings of foreign markets

d. Creating economy of scale

2. Which of the following statements isNOTtrue when describing emerging markets?

a. Corporate governance is notoriously poor in emerging markets.

b. Composite indices such as country rankings can differentiate among emerging markets.

c. Emerging markets offer great growth opportunities

d. Emerging markets have institutional voids.

3. In analyzing political risk in global businesses, what are NOT major sources of political risk?

a. Obsolescing bargain mechanism

b. Technological changes

c. Sociopolitical instability and grievances

d. Preferences and attitudes

4. State capitalism has become popular in emerging markets other than China, such as Russia, India, and Brazil. What is the primary objective of state capitalism?

a. To stimulate economic development by investing government-controlled resources

b. To allow the government to play a dominant role in controlling the wealth that markets generate

c. To improve institutional frameworks and reduce institutional voids

d. To help domestic firms compete with foreign entrants

5. The types of network effects present in a business model impact the nature of the competition a company will face and the optional business strategies. Which of the following statements about strategy is NOT true if network effects are primarily global?

a. The venture must begin with a substantial global presence.

b. The venture needs to acquire customers in many markets.

c. Acquisitions may be the easiest way to enter new countries.

d. The markets tend to be winner take all.