Carmine Inc. is an American mining company operating in Keharus, a country in Eastern Europe. Recently, the government of Keharus has passed a policy that restricts foreign direct investment. Consequently, the operations of Carmine Inc. is adversely affected. Given this information, it can be said that Carmine Inc. is subjected to _____ in Keharus.

Question

Quizplus · Accepted Answer

Carmine Inc. is subjected to political risk because the adverse effects on its operations are due to a change in government policy regarding foreign direct investment, which is a political decision.