With respect to political risk that can be faced by a company seeking to invest abroad, which of the following presents the most severe political risk?
A) Confiscation
B) Expropriation
C) Domestication
D) Exchange controls
E) Local-content laws

Question

Quizplus · Accepted Answer

The most severe political risk is confiscation, that is, the seizing of a company's assets without payment. Confiscation was most prevalent in the 1950s and 1960s when many underdeveloped countries saw confiscation, albeit ineffective, as a means of economic growth.

With Respect to Political Risk That Can Be Faced by a Company