Dimensions of diversification that can reduce variability in the multinational corporation's operating cash flows include ____:
A) currency and geographic diversification
B) currency and product market diversification
C) geographic and product market diversification
D) currency and virtual diversification
E) None of the above

Question

Quizplus · Accepted Answer

Geographic and product market diversification can reduce variability in a multinational corporation's operating cash flows. By diversifying the geographic locations of operations and the product markets served, a company can mitigate the risk of fluctuations in any one region or industry affecting their cash flows. Currency diversification may also help, but is not listed as an option including with geographic diversification. Virtual diversification is not a relevant dimension of diversification in this context.

Dimensions of Diversification That Can Reduce Variability in the Multinational