Question 1

A portfolio investment is essentially a passive investment,normally in the form of government or corporate bonds or listed securities.

Accepted Answer

A portfolio investment is indeed a passive investment and typically includes government or corporate bonds as well as listed securities.

Question 2

Export Industries Ltd. ,a Canadian corporation with a factory in London,Ontario,agrees to sell a customer in Germany 2000 microwave ovens FOB Lufnaia Airlines,Toronto,Pearson Airport.Which of the following statements is correct?

Accepted Answer

B) Export is liable for the goods until they are loaded into Lufnaia Airlines. This is because "FOB" (Free On Board) specifies that the seller's responsibility ends when the goods are loaded onto the transportation vehicle, in this case, Lufnaia Airlines at Toronto Pearson Airport.

Question 3

A free trade area is one in which customs duties are always imposed.

Accepted Answer

A free trade area is a group of countries that have agreed to eliminate tariffs, import quotas, and preferences on most (if not all) goods and services traded between them. Therefore, customs duties are not always imposed in a free trade area.

Question 4

Courts require that an action have some "connecting factor" or a "real and substantial connection" with the country or province in which the party seeks to bring the action.The question of whether a court will hear an action and allow a lawsuit to proceed in the court of that jurisdiction is called

Accepted Answer

The question describes the concept of a court assuming jurisdiction over a case, which is the answer choice D. Ultra vires refers to actions beyond a party's legal authority, foreign jurisdiction refers to a court outside of the country or province where the action is being brought, parallel and multiple proceedings both refer to different lawsuits happening simultaneously, which is not addressed in the question.

Question 5

The invoice is of special importance in the international sale of goods.It not only provides information to the parties to the transaction,but also

Accepted Answer

The answer of The invoice is of special importance in...

Question 6

Under Chapters 19 and 20 of NAFTA,in the event of a dispute,the Extraordinary Challenge Committee is the first body before which an arbitration is heard.

Accepted Answer

Under Chapters 19 and 20 of NAFTA, the Extraordinary Challenge Committee is not the first body before which an arbitration is heard. Instead, a panel of arbitrators is established.

Question 7

Countertrade

Accepted Answer

The answer of Countertrade
...

Question 8

The World Trade Organization provides two procedures for the resolution of disputes between countries.One way is to request the WTO Council to appoint a "panel" to adjudicate the dispute;the other way is

Accepted Answer

The consultation and conciliation procedure is preferred as it allows for a diplomatic solution to be reached between the disputing parties. This approach is often faster and less costly than the formal adjudication process by a panel. It also allows for the parties to have more control over the outcome and maintain their relationships.

Question 9

Conditions attached by a host country to a foreign investment are usually referred to as performance requirements.

Accepted Answer

Performance requirements are conditions that a host country may impose on a foreign investor, such as local content requirements, export requirements, technology transfer requirements, and employment requirements. These requirements are aimed at achieving certain outcomes or objectives, such as promoting domestic industry or ensuring that the foreign investor contributes to the development of the host country's economy.

Question 10

Notwithstanding that an action at law between contracting parties in different countries is brought in one country,the court of that country may decline jurisdiction on the basis of forum non conveniens.

Accepted Answer

This is true. The doctrine of forum non conveniens allows a court to decline jurisdiction in favor of a more appropriate forum, based on considerations of convenience, fairness, and justice.

Question 11

Dumping is the process where

Accepted Answer

Dumping refers to a situation where a foreign firm sells goods in Canada at prices lower than it sells the same goods for in its home country. This puts domestic producers of similar products at a disadvantage as they cannot compete on price, resulting in a loss of market share and potentially leading to job losses in the domestic industry. The government may impose countervailing duties to offset the advantage gained by the foreign firm through dumping.

Question 12

SlamDunk Inc. ,a Vancouver,B.C. ,firm,agrees to sell to SuperVideo Ltd.of Barcelona,Spain,500 video games with DDP terms.This means that SlamDunk will arrange for and pay the cost of shipping,the insurance,and the

Accepted Answer

The answer of SlamDunk Inc. ,a Vancouver,B.C. ,firm,agrees to sell...

Question 13

The forum non conveniens principle allows a court to refuse to hear a proceeding because another jurisdiction is more appropriate or more closely connected to the matter.Factors relevant to determining which of the multiple forums is more appropriate include all of the following EXCEPT

Accepted Answer

The other factors listed - convenience, location, expense, avoidance of multiple proceedings, law to be applied, and ability to enforce judgment - are all relevant in determining which forum is more appropriate. However, whether the plaintiff has been declared a frivolous and vexatious litigant is not relevant to this determination.

Question 14

Foreign direct investment (FDI)is not normally conducted through the establishment of

Accepted Answer

Foreign direct investment (FDI) is typically conducted through the establishment of a branch, subsidiary, or joint venture. A hostile takeover, on the other hand, involves taking over a company without the approval of its management or board of directors, and therefore is not a common method for conducting FDI.

Question 15

Foreign direct investment to a Canadian investor

Accepted Answer

Foreign direct investment (FDI) is characterized by the intention to have an effective voice in the management of the enterprise. This differentiates it from portfolio investments, where the investor's primary concern is financial return rather than control over the company's operations.

Question 16

In Canada,a foreign corporation must be licensed or registered to acquire standing to bring a lawsuit in Canada.

Accepted Answer

This is true. In most Canadian provinces, foreign corporations must be licensed or registered before they can bring a lawsuit in Canada. This requirement is designed to ensure that foreign corporations are subject to the same rules and regulations as Canadian companies.

Question 17

Aside from establishing a branch or subsidiary in a foreign country,an FDI is conducted by means of a partnership.

Accepted Answer

The answer of Aside from establishing a branch or subsidiary...

Question 18

The decision to invest in a foreign jurisdiction carries with it many risks.The possibility of the host country government assuming ownership of a foreign investor's assets is referred to as

Accepted Answer

Expropriation refers to the host country government taking ownership of a foreign investor's assets. This is a significant risk associated with investing in a foreign jurisdiction as it can result in substantial financial losses for the investor. The other options listed do not refer to this specific risk.

Question 19

Where a Canadian company makes an investment in a foreign country,Canada is considered to be the "host" country.

Accepted Answer

When a Canadian company makes an investment in a foreign country, the foreign country is considered to be the host country where the investment is being made. Canada would be the home country or the country of origin for the investing company.

Question 20

An export sale normally requires at least four documents.These include all of the following EXCEPT

Accepted Answer

The four necessary documents for an export sale are the contract of sale, the bill of lading, the insurance policy or certificate, and the invoice. The letter of credit is also important, but it is not one of the four essential documents required for an export sale.

Quiz 30: International Business Transactions