Credit policy for multinational firms is generally more risky due in part to the additional consideration of exchange rates and also due to uncertainty regarding the credit worthiness of many foreign customers.

Question

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Multinational firms operate in multiple countries, which introduces currency risk due to fluctuations in exchange rates. In addition, the credit worthiness of foreign customers may be more uncertain compared to domestic customers, making credit policy for multinational firms more risky.

Credit Policy for Multinational Firms Is Generally More Risky Due