________ is the risk that the host government will take specific steps that prevent the foreign affiliate from exercising control over the firm's assets.
A) Inconvertibility
B) Expropriation
C) Business income risk
D) none of the above

Question

Quizplus · Accepted Answer

Expropriation is the seizure of a company's assets by the host government without compensation to the firm's owners. This type of risk can prevent a foreign affiliate from exercising control over the firm's assets. Inconvertibility (A) refers to the risk that a government may restrict converting its currency into another, while business income risk (C) refers to the risks associated with unfavorable changes in market conditions or competition that could reduce a firm's profitability.

________ Is the Risk That the Host Government Will Take