When economic conditions of two countries are ____, then a firm would ____ its risk by operating in both countries instead of concentrating just in one.
A) highly correlated; reduce
B) not highly correlated; not reduce
C) not highly correlated; reduce
D) none of the above

Question

Quizplus · Accepted Answer

If the economic conditions of two countries are not highly correlated, then there is a lower risk of both countries experiencing economic downturns at the same time. By operating in both countries, a firm can reduce its overall risk exposure. Therefore, the best choice is C.

When Economic Conditions of Two Countries Are ____, Then a Firm