The risk associated with unanticipated actions by the host country government or its courts towards a multinational firm is called
A)economic risk.
B)transaction risk.
C)political risk.
D)translation risk.

Question

Quizplus · Accepted Answer

The risk associated with unanticipated actions by the host country government or its courts towards a multinational firm is called political risk. Economic risk is related to changes in macroeconomic conditions, while transaction risk is related to fluctuations in currency exchange rates. Translation risk is related to the potential impact of changes in exchange rates on the translation of the financial statements of a subsidiary from a foreign currency to the parent company's reporting currency.

The Risk Associated with Unanticipated Actions by the Host Country