Analysts Deciding Between Investments Must Consider the Comparative Risks

question 127

Multiple Choice

Analysts deciding between investments must consider the comparative risks.Which of the following is/areindustry-wide factors that affect the risk of business firms?

• A)increased competition
• B)increased government regulatory actions, such as anti-trust or clean environment policies
• C)changes in technology
• D)lack of availability of raw materials
• E)all of the above

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Definitions:

Foreign Direct Investment

An investment made by a company or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets in the other country.

Reputational Risk

The potential of losing stakeholder trust or diminishing brand value due to negative public opinion.

Valuation Risk

The potential for loss that arises from inaccuracies or errors in assessing the value of assets, liabilities, or investments.

Micro Political Risk

Micro political risk involves the impact of political decisions, events, or conditions on an individual firm's operations and performance, as opposed to the broader industry or economic segment.