The Text Describes Each of the Following Strategies for Managing

question 14

Multiple Choice

The text describes each of the following strategies for managing country risk EXCEPT

• A) disclose material risks in the firm's financial statements
• B) negotiate the environment with the host country.
• C) obtain political risk insurance.
• D) plan for disaster recovery.
• E) structure operations to minimize the MNC's risk exposure and maximize return.

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Definitions:

Private Enterprise

A business owned by private individuals or groups, operating for profit and not controlled by the state.

Consolidated Financial Statements

Combined financial documents that present the overall financial position of a parent company and its subsidiaries as one entity.

Cost Basis

The original value of an asset for tax purposes, usually the purchase price, which is used to calculate capital gains or losses when the asset is sold.

Subsidiaries

Companies that are controlled by another company, known as the parent company, through ownership of more than half of the voting stock or through other mechanisms of control.