Ways to Limit the MNC's Exposure to Country Risk Include

question 53

Multiple Choice

Ways to limit the MNC's exposure to country risk include which of a) through d) ?

• A) enlist local partners
• B) limit dependence on a single partner
• C) limit the scope of the technology transfer
• D) use more stringent investment criteria
• E) More than one of the above

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Definitions:

Gold Standard

A monetary system where a country's currency or paper money has a value directly linked to gold; countries agree to convert currency into a fixed amount of gold.

Fixed Exchange-Rate

A regime under which the government or central bank ties the official exchange rate to another country's currency or the price of gold.

Capital Account

A national account that shows the net change in asset ownership for a country. It includes foreign investments and loans.

Financial Account

A component of the balance of payments that records transactions of financial assets between residents of one country and the rest of the world.