A - Look at the following Bill of Exchange, identify:

1. Issue Date:
2. Amount:
3. Drawee
4. Information of Drawer:
5. Beneficiary
6. Is it negotiable?
B - Choose the correct options
A - expertise and B - long-term C - diversifying D - net FDI E- Expatriation of
technical know-how investment risk inflow funds
F- Portfolio investment G - Policy H- inward I- outward K- Culture
L- Logistics M- Foreign direct
investment

UNDERSTAND THE TYPES OF INTERNATIONAL INVESTMENTS

There are two main categories of international investment. (1) —————— refers to the investment in a company’s
stocks, bonds, or assets, but not for the purpose of controlling or directing the firm’s operations or management.
Typically, investors in this category are looking for a financial rate of return as well as (2) ————— through multiple
markets.

(3) ————— refers to an investment in or the acquisition of foreign assets with the intent to control and manage them.
It is primarily a (4) —————— strategy. Companies usually expect to benefit through access to local markets and
resources, often in exchange for (5) ——————.
(6) ————— FDI refers to investments coming into the country and (7) ————— FDI are investments made by
companies from that country into foreign companies in other countries. The difference between inward and outward is
called the (8) ———————, which can be either positive or negative.

FACTORS THAT INFLUENCE A COMPANY’S DECISION TO INVEST

Let’s look at why and how companies choose to invest in foreign markets. Simply purchasing goods and services or
deciding to invest in a local market depends on a business’s needs and overall strategy. Direct investment in a country
occurs when a company chooses to set up facilities to produce or market their products; or seeks to partner with, invest
in, or purchase a local company for control and access to the local market, production, or resources. Many considerations
influence its decisions:
* Cost. Is it cheaper to produce in the local market than elsewhere?
* (9) ————— Is it cheaper to produce locally if the transportation costs are significant?
* Natural resources. Is the company interested in obtaining access to local resources or commodities?
* Know-how. Does the company want access to local technology or business process knowledge?
* Customers and competitors. Does the company’s clients or competitors operate in the country?
* (10) ————— Are there local incentives (cash and noncash) for investing in one country versus another?
* (11) ————. Is the workforce or labor pool already skilled for the company’s needs or will extensive training be
required?
* (12) ------------. Can the company easily take profits out of the country, or are there local restrictions?

C – Fill the words in the blanks

Consider a U.S. firm exporting to a distributor in France. The process works in a typical case in the following steps
1. The French importer places an order with the U.S. exporter and asks the American if he would be willing to ship
under a letter of credit.
2. The U.S. exporter agrees to ship under a letter of credit and specifies relevant information such as prices and
delivery terms.
3. The French importer --------------- to the Bank of Paris for a letter of credit to be issued in favor of the U.S.
exporter for the merchandise the importer wishes to buy.
4. The Bank of Paris --------------- a letter of credit in the French importer’s favor and sends it to the U.S. exporter’s
bank, the Bank of New York.
5. The Bank of New York advises the exporter of the opening of a letter of credit in his favor.
6. The U.S. exporter ships the goods to the French importer on a common carrier. An official of the carrier gives the
exporter a -------------------.
7. The U.S. exporter presents a 90-day ------------------- drawn on the Bank of Paris in accordance with its letter of
credit and the bill of lading to the Bank of New York. The exporter endorses the bill of lading so title to the goods
is transferred to the Bank of New York.
8. The Bank of New York sends the ----------------- and ------------------ to the Bank of Paris. The Bank of Paris accepts
the draft, taking possession of the documents and promising to pay the now-accepted draft in 90 days.
9. The Bank of Paris returns the accepted draft to the Bank of New York.
10. The Bank of New York tells the U.S. exporter that it has received the accepted bank draft, which is -------------------
in 90 days.
11. The exporter sells the draft to the Bank of New York at a discount from its face value and receives the discounted
cash value of the draft in return.
12. The Bank of Paris ------------------- the French importer of the arrival of the documents. She agrees to pay the Bank
of Paris in 90 days. The Bank of Paris ------------------- the documents so the importer can take possession of the
shipment.
13. In 90 days, the Bank of Paris receives the importer’s payment, so it has funds to pay the maturing draft.
14. In 90 days, the holder of the matured acceptance (in this case, the Bank of New York) presents it to the Bank of
Paris for payment. The ------------------- pays.

D - CHOOSE THE BEST OPTION

1. An arrangement whereby a licensor grants the rights to intangible property to another entity (the licensee) for a
specified period, and in return, the licensor receives a ________from the licensee.
A. commission B. charge C. royalty fee
2. when it is said that "the dollar has ________," it means that the U.S. dollar has gained value relative to the British
pound.
A. Appreciated B. deppreciated C. speculated
3. This type of insurance covers the loss or damage of ships, cargo, terminals, and any transport or property by which
cargo is transferred, acquired, or held between the points of origin and final destination.
A. Maritime insurance. B. Property insurance C. Liability insurance
4. The insurance company will __________ the client for the losses.
A. Compensate B. indemnify C. remunerate
5. Which payment in international trade, in which banks play a moderate role in the process by facilitating the
document exchange and payment collection process. In specific, banks handle documents, providing some level of
security but not a full guarantee.
 A. Open account B. Collection C. Letter of Credit

As establishing operations abroad, firms have three options: exporting, licensing and FDI. Foreign direct investment,
however, may be both expensive and risky compared with exporting and licensing. Why FDI is said to be both expensive
and risky? What questions should be asked on the decisions of making FDI?

6. On 19/11/2024, Techcombank quotes the Exchange rate as follow:

SGD/VND 18,456/19,372
THB/VND 650/767
a/ What is the quoted currency?
b/ what is the Bid rate for SGD, and Ask rate for THB?
c/ At which rate will CUSTOMERS buy SGD?