Unit 13: Country Evaluation and Selection - Practice Quiz

1 What is the main purpose of an opportunity and risk matrix?

2 Which country would generally be most attractive in an opportunity and risk matrix?

3 In a country evaluation matrix, political instability is usually classified as what?

4 A rapidly growing customer base is normally treated as what in an opportunity and risk matrix?

5 Which action may be appropriate when a country has high opportunity but also high risk?

6 Which macro indicator measures the total value of final goods and services produced within a country?

7 What does a country's inflation rate primarily show?

8 Which indicator shows the percentage of the labor force that is without work but seeking employment?

9 Why do international businesses examine exchange rates?

10 Which macro indicator is commonly used to estimate average economic output per person?

11 What do micro indicators mainly examine during country selection?

12 Which of the following is a micro indicator?

13 Why is competitor analysis useful when evaluating a foreign market?

14 What does market size indicate at the industry level?

15 Which micro indicator helps a company understand how products reach customers?

16 What is a country ranking used for?

17 In a weighted scoring model, what does a larger weight indicate?

18 What does a country checklist help managers do?

19 Which tool presents countries in rows and evaluation criteria in columns?

20 What is the main benefit of using standardized scores to compare countries?

21 A country has rapidly growing demand for electric vehicles but also frequent regulatory changes affecting foreign manufacturers. Where should it be placed in an opportunity and risk matrix?

22 A company assigns opportunity and risk scores from 1 to 10. Country P has an opportunity score of 8 and a risk score of 7, while Country Q scores 6 and 3. A risk-averse company seeking stable expansion should prefer which country?

23 Which change would most likely move a country from the low-opportunity, high-risk quadrant toward the high-opportunity, low-risk quadrant?

24 A market is classified as high opportunity and low risk, but entry costs are beyond the company's available budget. What is the best managerial response?

25 Country A has moderate market potential but very low political risk. Country B has high potential and high political risk. Which factor should most strongly determine the final choice between them?

26 Country R reports real GDP growth of 5%, inflation of 18%, and a rapidly depreciating currency. What is the most reasonable interpretation for a foreign investor?

27 A country's nominal GDP increased by 9% while inflation was 6%. Using a simple approximation, what was its real GDP growth rate?

28 A consumer-goods company is comparing two countries with equal total GDP. Which macro indicator would best help estimate the average purchasing capacity of residents?

29 A country has a persistent current account deficit financed mainly by short-term foreign borrowing. Which risk deserves the greatest attention?

30 Which combination of macro indicators most strongly suggests an overheating economy?

31 A country has favorable GDP growth, but a retailer finds that its target segment is small and distribution outside major cities is costly. What does this demonstrate?

32 A medical-device manufacturer wants to assess sales potential in a foreign country. Which micro indicator is most directly relevant?

33 Two markets have similar demand for smartphones. Market X has three major distributors with nationwide coverage, while Market Y has many fragmented distributors with limited coverage. What advantage does Market X most likely offer?

34 A firm's estimated annual market demand is 500,000 units, and it expects to capture 8% of the market. What is its expected annual sales volume?

35 A food company discovers that local consumers prefer smaller packages and shop mainly at neighborhood stores. Which decision should be adjusted first?

36 A company uses a weighted scoring model with market potential weighted at 60% and political stability at 40%. Country A scores 8 and 5, while Country B scores 6 and 8. Which country has the higher weighted score?

37 Why should a company perform sensitivity analysis after ranking countries with a weighted scoring model?

38 A company compares countries using GDP, population, and import volume. All three indicators are strongly related to market size. What problem may arise?

39 Country C scores high on a standardized country index, but the index was designed for mining investment. A software company is evaluating Country C. What should the software company do?

40 When comparing inflation rates reported by different countries, which practice most improves comparability?

41 A firm scores country opportunity as and risk as , where all inputs use a 1–10 scale. The data are A , B , C , and D . If policy excludes every country with , which country should be selected?

42 Two pairs of countries have identical standalone opportunity and risk ratings. Within Pair X, country returns have correlation ; within Pair Y, they have correlation . Each country has return volatility , and investments are equally weighted. Which portfolio implication is correct?

43 A country lies in the high-opportunity, high-uncertainty quadrant. Entry requires either an irreversible million plant or a million pilot that preserves the right, but not the obligation, to expand after regulatory uncertainty resolves. Which decision best reflects real-options logic?

44 A political event has an inherent probability of and impact of million. Contractual safeguards reduce the probability to and impact to million. If entry thresholds apply to risk after feasible controls, how should the matrix represent this exposure?

45 A weighted matrix ranks Country K first because strong growth offsets a small probability of sanctions that would make all cash transfers illegal. Management has zero tolerance for transfer prohibition. Which modification is most defensible?

46 A country's nominal GDP grows by , domestic prices rise by , and its currency loses against the reporting currency. Using multiplicative adjustments, what is the approximate change in inflation-adjusted GDP translated into the reporting currency?

47 A government begins with debt equal to of GDP. Its nominal interest rate is , nominal GDP growth is , and it runs a primary surplus of of GDP. Using , how does the debt ratio change?

48 A target country's currency depreciates nominally by against a trading partner's currency. Domestic inflation is , while partner-country inflation is . Using , what is the approximate real depreciation?

49 Country A has higher average GDP per capita than Country B, but most of its income is concentrated in the top decile. A firm sells mid-priced appliances to mass-market urban households. Which indicator most directly resolves the apparent attractiveness of Country A?

50 Reported GDP growth remains positive, but the purchasing managers' index has stayed below 50 for four months, real credit growth is negative, and inventories are rising. What is the strongest interpretation for country evaluation?

51 A product retails for . The retailer retains of the retail price. Per-unit production, logistics, and local support costs are , , and , respectively, while expected returns equal of manufacturer revenue. With launch fixed costs of , what happens at sales of units?

52 A market's distributor shares are , , and . The largest distributor is then split into independent firms with shares of and , with all other shares unchanged. How does the Herfindahl–Hirschman Index change?

53 A firm sells units at each, with variable cost of per unit. It considers a price increase, and estimated price elasticity is . Using the linear elasticity approximation, how would total contribution change?

54 A country launch is forecast to sell units with contribution of per unit. Twenty percent of these sales would replace exports that otherwise earned contribution of per unit. Country-specific fixed costs are . What is the launch's incremental profit?

55 A pilot generates 1,000 leads and 100 purchases. Segment S supplies 600 leads and 90 purchases but represents only of the national target market. The remaining segment supplies 400 leads and 10 purchases and represents of the market. What is the market-standardized conversion estimate?

56 A weighted country model uses only economic attractiveness and institutional quality. Country A scores 9 and 5; Country B scores 7 and 8. If the economic weight is and the institutional weight is , when does Country A outrank Country B?

57 In an Analytic Hierarchy Process comparison, a manager judges Country A three times as attractive as B and B twice as attractive as C. For perfect multiplicative consistency, what should the A-to-C judgment be?

58 Country P is geographically close and shares the home country's language, but it imposes a foreign-ownership cap and mandatory local storage of customer data. For a cloud platform, which CAGE dimension most directly captures the potentially binding disadvantage?

59 A gravity model estimates market potential as proportional to , with the home country's GDP held constant. Country A has GDP of billion and distance of km; Country B has GDP of billion and distance of km. Which comparison is correct?

60 A scenario tool gives country payoffs under boom, base, and crisis conditions: A , B , and C . If management applies the minimax-regret criterion, which country should it choose?