Empirical Research Has Found That Systematic Risk for MNEs Is

question 32

Multiple Choice

Empirical research has found that systematic risk for MNEs is greater than that for their domestic counterparts. This could be due to

• A)the fact that the increase in the correlation of returns between the market and the firm is less than the increase in the standard deviation of returns of the firm.
• B)the fact that the decrease in the correlation of returns between the market and the firm is greater than the increase in the standard deviation of returns of the firm.
• C)the reduction in the correlation of returns between the firm and the market is less than the increase in the variability of returns caused by factors such as asymmetric information, foreign exchange risk, and the like.
• D)none of the above. Systematic risk is less for MNEs than for their domestic counterparts.

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Definitions:

Working Models

Mental representations of the self, others, and relationships that guide an individual's expectations, interactions, and interpretations in social contexts.

Romantic Schemas

Cognitive frameworks or templates that shape an individual's attitudes, expectations, and behaviors in romantic relationships.

Relational Self-Esteem

An individual's sense of self-worth based on the quality and nature of their relationships with others.

Fearfully Avoidant

An avoidant attachment style characterized by a negative view of both self and others, high anxiety and avoidance, and distant relationships, in which the person doesn’t feel worthy, doesn’t trust others, and fears rejection.