Diversification Is Possibly the Best Technique for Reducing the Problems

question 43

Essay

Diversification is possibly the best technique for reducing the problems associated with international transactions. Provide one example each of international financial diversification and international operational diversification and explain how the action reduces risk.

---

Definitions:

Theory of Mind

The ability to attribute mental states—beliefs, intents, desires, emotions, knowledge—to oneself and to others, and to understand that others have beliefs, desires, and intentions that are different from one's own.

Worldview

A comprehensive perspective or collection of beliefs through which an individual interprets and understands the world around them.

Self-Esteem

An individual's overall subjective emotional evaluation of their own worth.

Dominant

Referring to a trait that overshadows or is more likely to be expressed in the presence of another.