If an MNC and a local firm form a joint venture,and the local firm has an option to take over the joint venture,the local firm is said to have a:

Question

Quizplus · Accepted Answer

A call option gives the holder the right to buy a particular asset at a specified price within a certain period of time. In this case, the local firm has the option to take over the joint venture. Therefore, it can exercise its call option and buy out the MNC's share in the joint venture.

If an MNC and a Local Firm Form a Joint