Which of the Following Is Not a Characteristic That Favorably

question 41

Multiple Choice

Which of the following is not a characteristic that favorably affects an MNC's cost of capital, compared to the cost of capital for a domestic firm?

• A) the MNC's exposure to exchange rate risk
• B) the MNC's size
• C) the MNC's access to international capital markets
• D) the MNC's international diversification

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Definitions:

Trade Surplus

Trade Surplus occurs when the value of a country's exports exceeds the value of its imports.

Trade Deficit

A situation where a country's imports exceed its exports during a specific time period, indicating a net outflow of domestic currency to foreign markets.

Imports

The goods and services purchased from other countries.

Foreign Direct Investment

An investment made by a firm or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets.