Himark Enterprises has foreign operations in Taiwan,India,and China.The firm pays an annual insurance premium to the Overseas Private Investment Corporation.The firm is most likely protecting itself from ________.

Question

Quizplus · Accepted Answer

The Overseas Private Investment Corporation provides political risk insurance, which protects companies against losses due to expropriation, political violence, and similar events that can occur when a foreign government nationalizes or expropriates assets. This would be the most likely reason why Himark Enterprises pays an annual insurance premium to this organization, as it has foreign operations in countries like Taiwan, India, and China which have different political climates that could pose risks to their investments. The other options - privatization, natural disasters, and financial instability - are not as directly related to political risks that could be mitigated through political risk insurance.

Himark Enterprises Has Foreign Operations in Taiwan,India,and China