Political risk can vary by industry as well as by country. It is not solely dependent upon the country in which operations are located. Parent company involvement may or may not reduce political risk, depending on the circumstances. Political risk can also affect firms that only have domestic operations.

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Political Risk

Question 57

Multiple Choice

Political risk

A) can be greatly reduced by minimizing parent company involvement.
B) varies by industry as well as by country.
C) is solely dependent upon the country in which operations are located.
D) is only faced by firms that have international operations.
E) applies only to those risks associated with a firm's domestic laws and regulations.

Correct Answer: