Which of the Following BEST Explains How a Firm Reduces

question 79

Multiple Choice

Which of the following BEST explains how a firm reduces risk by operating internationally?

• A)taking advantage of business-cycle differences among countries
• B)buying competitive risk insurance unavailable domestically
• C)preventing competitors from operating in the countries it has entered
• D)operating in less competitive environments than those at home

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Definitions:

Break-Even Default Rate

The default rate at which the expected return from a loan equals the cost of the loan, resulting in no profit or loss.

Net 30 Credit Policy

A specific credit term where customers are given 30 days to pay the invoice in full, widely used in business transactions to manage cash flow.

Monthly Interest Rate

The interest rate expressed as a monthly percentage, determining the amount of interest charged or earned per month.

Credit Policy

A set of guidelines that a company follows to determine credit limits and terms for customers, aiming to manage risk and promote sales.