________ is the ability to exercise effective control over a foreign subsidiary within a country's legal and political environment.
A) Political risk
B) Portfolio risk
C) Interest rate risk
D) Governance risk

Question

Quizplus · Accepted Answer

Governance risk refers to the ability of a parent company to exercise effective control over a foreign subsidiary within a country's legal and political environment. It includes the legal framework and regulations in the host country that may affect the operations of the subsidiary, as well as the ability of the parent company to enforce its policies and procedures within the subsidiary. Political risk, portfolio risk, and interest rate risk are different types of risks that may affect international operations, but they are not directly related to the ability to exercise effective control over a subsidiary.

________ Is the Ability to Exercise Effective Control Over a Foreign