considering the risk of a foreign investment, a higher risk might arise from exchange rate risk and political risk while lower risk might result from international diversification.

Question

Quizplus · Accepted Answer

Exchange rate risk and political risk are major factors that can increase the risk of a foreign investment, while international diversification can help lower risk by spreading out investments across different markets and reducing the impact of any one market's instability.

Considering the Risk of a Foreign Investment, a Higher Risk