Which of the Following Characterizes Country Risk

question 53

Multiple Choice

Which of the following characterizes country risk?

• A) The political and legal systems of adjacent nations greatly impact the country risk of nations that host foreign firms.
• B) Country risk will change only after the creation of laws and regulations that affect foreign firms.
• C) A nation's country risk level remains fairly constant until the election and installation of a new political leader.
• D) Country risk is always present, but its nature and intensity vary over time and from country to country.

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Definitions:

Return On Equity

A gauge of corporate profitability that indicates the profit made from the investments of its shareholders.

Return On Assets

A financial ratio that indicates the percentage of profit a company earns in relation to its overall resources. It demonstrates how effectively a company is using its assets to generate earnings.

Average Collection Period

A measure of the average number of days it takes a company to collect payments from its credit sales.

Du Pont Analysis

A method of performance measurement that breaks down return on equity into three component parts: profit margin, asset turnover, and financial leverage.