When considering the risk of a foreign investment, a higher risk might arise from exchange rate risk and political risk while lower risk might result from international diversification.

Question

Quizplus · Accepted Answer

Exchange rate risk and political risk can increase the overall risk of a foreign investment. However, by diversifying investments internationally, the risk can be lowered as it spreads out the investment across different countries and industries.

When Considering the Risk of a Foreign Investment, a Higher