If a Foreign-Based Firm Borrows Money from a Host Country

question 80

Multiple Choice

If a foreign-based firm borrows money from a host country bank as a hedge against being forced out of operation without adequate compensation, the firm is managing political risk with ________.

• A)local debt financing
• B)position control
• C)development assistance
• D)adaptation

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Definitions:

Availability Heuristic

A cognitive shortcut based on the first examples that spring to mind when considering a particular subject, idea, strategy, or choice.

Gun Violence

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Probability

A measure of the likelihood of a specific event or outcome to occur, expressed as a number between 0 and 1.

Mental Accounting

A concept in behavioral finance where individuals categorize and evaluate economic outcomes by assigning them to specific accounts mentally.