What Are the Two Types of Political Risk That Affect

question 19

Multiple Choice

What are the two types of political risk that affect companies conducting global business?

• A)political uncertainty and policy uncertainty  
• B)policy uncertainty and expropriation potential  
• C)infrastructure dynamism and expropriation potential  
• D)infrastructure dynamism and political uncertainty

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Definitions:

Depreciation Tax Shield

The tax saving achieved by a company from deducting depreciation expenses on its taxable income.

Depreciation

The allocation of the cost of an asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.

Taxes

Mandatory financial charges or levies imposed by a government on individuals and organizations to fund public expenditures.

Profitability Index

A financial tool that calculates the relative profitability of an investment by dividing the present value of future cash flows by the initial investment cost.