Which of the following statement is correct? Select one: a. Cultural risk is the risk that...

Which of the following statement is correct? Select one:

a. Cultural risk is the risk that foreigners doing business in another country will fail to adapt to cultural differences, and this failure will affect the MNC’s success.

b. All the answers are incorrect.

c. The firm using the hedging instruments such as a forward, futures, or swap contract magnifies the foreign exchange risk.

d. Mexican tourists tend to come to the United States in smaller numbers when the dollar is weakening against the Mexican peso.

e. Expropriation of assets is an example of economic risk.

Solutions

Expert Solution

Answer "a" is correct.

Cultural risk is the risk faced by all the companies who are investing another country. Due to this barrier, most of the companies failing to adap to cultural differences in another country results in failure of company.

jeff jeffy answered 1 year ago

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