Which of A) Through D) Is True

question 29

Multiple Choice

Which of a) through d) is true?

• A) A particular political risk is more likely to be diversifiable by local investors than by international investors.
• B) A political risk such as an election imposes higher costs of capital on MNCs held by globally diversified investors.
• C) From the perspective of managers in the multinational corporation, political risk is not diversifiable.
• D) Global investors are exposed to a multinational corporation's total risk, measured by standard deviation of return in the investors' functional currencies.
• E) None of the above

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Definitions:

Needs

Fundamental physiological or psychological requirements that are essential for the survival, well-being, and proper functioning of an organism.

Goals

Targets or outcomes that an individual, group, or organization aims to achieve through concerted effort.

Internal

Located within or happening inside a body, mind, or institution.

External

Pertaining to or relating to the outside or exterior part of something.