Some of the Risks That a U

question 85

Multiple Choice

Some of the risks that a U.S. based MNC can encounter in its foreign investments are: (i) - an increase in the cost of borrowing due to a rise in interest rates
(ii) - increase in inflation rates
(iii) - dumping
(iv) - unfair competition by local companies
(v) - inconvertibility of foreign currencies
(vi) - expropriation
(vii) - destruction of properties due to war, revolution, and other violent political events in foreign countries
(viii) - loss of business income due to political violence
In the U.S., the Overseas Private Investment Corporation (OPIC) offers insurance against which of the above:

• A)(i), (ii), (iii), and (iv)
• B)(v), (vi), (vii), and (viii)
• C)a and b
• D)none of the above

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Definitions:

Selective Demand

Consumer demand focused on specific brands or products rather than on the category as a whole.

Brand Loyalty

The consistent preference for one brand over all others, often reflected in repeated purchases by consumers.

Product Life Cycle

The stages through which a product goes from its inception to its decline, typically including introduction, growth, maturity, and decline phases.

Promotional Expenditures

Refers to the costs associated with marketing and advertising campaigns intended to boost sales or raise brand awareness.