Transfer risk is one type of political risk facing a firm operating in an overseas market. This type of risk involves host government interference in the overseas operations of the firm.

Question

Quizplus · Accepted Answer

Transfer risk, a type of political risk, specifically refers to the risk of restrictions on currency exchange that prevent a firm from converting local currency into its home currency or transferring funds out of the host country. It does not directly involve government interference in operations but rather impacts the firm's ability to repatriate profits or capital.

Transfer Risk Is One Type of Political Risk Facing a Firm