An MNC will likely benefit most from diversifying if:
A)the correlations between country economies are high.
B)the correlations between country economies are low.
C)the variability of all country economy levels is high.
D)B and C

Question

Quizplus · Accepted Answer

If the correlations between country economies are low, it means that the economies are less interdependent and more diverse in terms of their growth and output. This provides an opportunity for an MNC to diversify its operations and reduce its overall risk by investing in multiple countries with different economic conditions. High correlations between country economies would mean that economic shocks or downturns in one country could have a similar effect on others, making it harder to reduce risk through diversification. The variability of all country economy levels being high could also provide an opportunity for diversification, but this is not as important as low correlations between country economies.

An MNC Will Likely Benefit Most from Diversifying If