Jaye Owns a Business in a Foreign Country That Is

question 41

Multiple Choice

Jaye owns a business in a foreign country that is considered "friendly" with the United States but which has significant political unrest.Jaye is uneasy about the situation in the country and concerned that any business could be the subject of a taking by the foreign country or could suffer losses due to civil unrest.What advice would you give Jaye?

• A) Jaye should seek insurance through the Foreign Insurance Services Company,a privately run insurance company specializing in foreign risk.
• B) Jaye should do nothing at the present,but seek reimbursement through the U.S.government should losses be incurred.
• C) Jaye should seek insurance through the Overseas Private Investment Corporation,a U.S.government agency specializing in providing insurance for foreign risk.
• D) Jaye should sell the company and leave the country because insurance is not available.

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Definitions:

Nearest 0.01%

An accuracy level in calculations where the result is rounded to the closest one-hundredth of a percent.

Equivalent Interest Rate

A rate that equates two or more interest arrangements by taking into account compounding periods and other terms.

Equivalent Interest Rate

An equivalent interest rate is the interest rate that equates to the compound interest over a different payment frequency, ensuring comparability among rates with different compounding periods.

Nearest 0.01%

Rounding off a number to the closest one-hundredth of a percent for precision in calculation or representation.