Suppose Your Firm Invests $100,000 in a Project in Italy

Suppose your firm invests $100,000 in a project in Italy.At the time the exchange rate is $1.25 = €1.00.One year later the exchange rate is the same,but the Italian government has expropriated your firm's assets paying only €80,000 in compensation.This is an example of

A) exchange rate risk.
B) political risk.
C) market imperfections.
D) none of the options,since $100,000 = €80,000 × $1.25/€1.00.