Globotech, a global technology company, invests in firms operating in foreign countries. All of the following are risks associated with this practice EXCEPT
A) nationalization of foreign firms.
B) a violent overthrow of the political party in power.
C) foreign government interest in the company's products.
D) blockage of capital flows to investors.
E) punitive legislation against foreign investors.

Question

Quizplus · Accepted Answer

Political risk is the risk associated with investing in firms operating in foreign countries. Dangers include the nationalization of foreign firms, blockage of capital flows to investors, or a violent overthrow of the political party in power, with all the associated implications. Punitive legislation against foreign firms or investors is another political risk.

Globotech, a Global Technology Company, Invests in Firms Operating in Foreign