What major dimension sets apart international finance from domestic finance?
A)Foreign exchange and political risks
B)Market imperfections
C)Expanded opportunity set
D)All of the above

Question

Quizplus · Accepted Answer

International finance involves foreign exchange risk, which refers to the possibility of loss arising from changes in currency exchange rates. Political risk also poses a threat to firms operating in foreign countries. Market imperfections, such as differences in tax laws, legal systems, and economic conditions, add another layer of complexity to international finance. The expanded opportunity set in international finance arises from access to global capital markets and the ability to invest in a wider range of financial instruments. Thus, all the options (A), (B), and (C) set international finance apart from domestic finance.

What Major Dimension Sets Apart International Finance from Domestic Finance