A purely domestic firm sources its products,sells its products,and raises its funds domestically
A)can face stiff competition from a multinational corporation that can source its products in one country, sell them in several countries, and raise its funds in a third country.
B)can be more competitive than an MNC on its home turf due to superior knowledge of the local market.
C)can still face exchange rate risk, just like an MNC.
D)all of the above are true

Question

Quizplus · Accepted Answer

All the statements are true. A purely domestic firm may face tough competition from an MNC due to its wider reach, but it may also have an advantage over MNCs in its home country due to its better understanding of the local market. Additionally, the purely domestic firm can still face exchange rate risk if it engages in international transactions, just like an MNC. Therefore, Option D is the correct answer.

A Purely Domestic Firm Sources Its Products,sells Its Products,and Raises