Asked by Lydia Mazuka on May 01, 2024
Verified
The chance of incurring losses due to the intentional actions of foreign governments or terrorist groups is:
A) international risk.
B) business risk.
C) political risk.
D) war-related risk.
Foreign Governments
The governing bodies of nations other than one's own, which may interact through diplomacy, trade, and other forms of engagement.
Political Risk
Political risk involves the possibility that political decisions, events, or conditions will significantly affect the profitability of a business or the expected value of a given economic action.
- Examine the dangers related to international commerce, paying close attention to political instability and commercial jeopardies such as expropriation and terrorism.
Verified Answer
KS
Kaylie SorensenMay 02, 2024
Final Answer :
C
Explanation :
Political risk refers to the possibility of incurring losses due to political actions taken by foreign governments or other political entities. This can include actions such as nationalization of assets, expropriation, civil unrest and terrorism. It is different from international risk, which refers to general risks associated with conducting business in foreign countries, and war-related risk, which specifically refers to risks associated with war or military action. Business risk, on the other hand, refers to risks that are inherent in the operation of a particular business, such as competition, changes in consumer preferences and technological obsolescence.
Learning Objectives
- Examine the dangers related to international commerce, paying close attention to political instability and commercial jeopardies such as expropriation and terrorism.