1. List the MNC’s key stakeholders. How does each have a stake in the MNC? 3....

1. List the MNC’s key stakeholders. How does each have a stake in the MNC?

3. What is country risk? Describe several types of country risk one might face when conducting business in another country?

4. What is political risk?

5. What is foreign exchange risk?

6. What investment opportunities might MNCs enjoy that are not available to local firms?

8. What are the perfect financial market assumptions? What is their implication for multinational financial management?

Expert Solution

1.Employees, Customers, Shareholders, Suppliers, Government, and Society are MNC's key stakeholders.

Employees & Customers play key role in stakeholders as they are the main primary reason behind the company's profitabity business. Shareholders are the one who invests in the company for long run. Supplier or creditors are the one who are constant throughout the running of the business. Government are involved to support the company for any losses borne in future to protect the company. Society are none other than the consumers.

2.A set of risks associated with investing in a particular country. There are several types of country risks such as political risks, Economic risk, Environment risk, Subjective risk & Exchange risk.

3.Political risk is a risk an investment's returns could suffer as a result of political changes or instability in a country.

4.Foreign exchange risk refers to the losses that an international financial transaction may incur due to currency fluctuations.

5.Investment, tax revenues, technology, jobs and business contracts are the one by which MNCs enjoy that are not available to local firms.

6.Capital markets, rational behaviour,tax-free world & no transactions costs are the perfect financial market assumptions.

jeff jeffy answered 2 years ago

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