In a Direct Foreign Investment Arrangement,which Statement Is True of the Direct

question 28

Multiple Choice

In a direct foreign investment arrangement,which statement is true of the direct investors?

• A) They do not have a controlling interest in the firm.
• B) They possess the lowest potential risk.
• C) They have the highest potential reward.
• D) They have a small minority interest in the foreign firm.

---

Definitions:

Purchase Order

A formal document issued by a buyer to a seller, detailing the products, quantities, and agreed prices for products or services.

Price Reductions

A strategy where a business lowers the price of its products or services to attract more customers, increase sales volume, and possibly outmaneuver competitors.

Supplier's Financial Capacity

The ability of a supplier to meet contractual obligations, including production and delivery, based on their financial resources.

Risk Minimization

The process of identifying, assessing, and taking steps to reduce or eliminate risks to an organization.