When Economic Conditions of Two Countries Are ____, an MNC

question 1

Multiple Choice

When economic conditions of two countries are ____, an MNC would ____ its risk by operating in both countries instead of concentrating just in one.

• A) highly correlated; reduce
• B) not highly correlated; not reduce
• C) not highly correlated; reduce
• D) None of these are correct.

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Definitions:

Required Rate of Return

The minimum annual percentage return an investor expects to receive from an investment, considering its risk.

NPV

Net Present Value; a calculation used to assess the profitability of an investment by summing the present values of incoming and outgoing cash flows.

CCA Class

In Canadian taxation, a classification system for capital cost allowance that categorizes assets for depreciation purposes.

Erosion Cost

Costs incurred from the gradual loss or diminishing in value of an asset over time.