To Diversify Internationally for the Purpose of Reducing Risk, Which

question 46

Multiple Choice

To diversify internationally for the purpose of reducing risk, which strategy is appropriate?

• A) Establish subsidiaries in markets whose business cycles are the same as those where existing subsidiaries are based.
• B) Establish a subsidiary in a market that has relatively low cost of labor or land.
• C) Establish a subsidiary in a market where the local currency is weak but is expected to appreciate over time.
• D) Establish subsidiaries in markets whose business cycles differ from those where existing subsidiaries are based.

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Definitions:

Rising Salt Dome

A geological formation where a column of salt moves upward through overlying sediments, often forming a dome-like structure.

Fault Zone

A fault zone is a region of the Earth's crust characterized by one or more faults, which are fractures along which there has been displacement of the sides relative to one another.

Unconformity

A surface within the rock record that represents a gap in the geological history due to erosion or non-deposition of sediments.

Petroleum

A naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons, used primarily as fuel and in chemical production.