Assume a company is planning to make a major financial investment to build a manufacturing facility...

Assume a company is planning to make a major financial investment to build a manufacturing facility in a foreign country. Which of the following risks is particularly important to research in the foreign country?

	Diversification risk
	Commercial risk
	Political risk
	Translational risk
	Transactional risk

Expert Solution

Option C.

Financial investments in foreign countries are associated with different types of risks.

When a company plans to invest in a foreign country in order to build a manufacturing facility, it is particularly important to research on the political risks in the foreign country.

This is mainly because, various political events or decisions can affect a business profits as various political decisions or events of a country can cause administrative delays.

This can affect investor's or corporation's negativity during financial investments in foreign countries

Rahul Sunny answered 3 years ago

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