A Foreign Investment Undertaken by an MNE That Is Considered

question 45

Multiple Choice

A foreign investment undertaken by an MNE that is considered risky from a political and currency perspective may still be undertaken because:

• A) The investor is forming a strategic alliance with a domestic partner.
• B) The MNE is basing its foreign investment decisions on a portfolio basis.
• C) The MNEs management does not believe that risk can be measured or predicted.
• D) The investor knows that they will be more than adequately compensate for accepting higher risk.

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Definitions:

Tax Burden

The total amount of taxes imposed on an individual, corporation, or other entity by the government, often expressed as a percentage of income.

Ceteris Paribus

A Latin phrase meaning 'all other things being equal', used in economics to isolate the effect of one variable change.

Payroll Taxes

Levies placed on both employers and employees, determined by a portion of the wages that businesses disburse to their workforce.

High-Income Earners

Individuals or households that have an income significantly above the average or median level.