Asked by Jasmine Renteria on Jun 14, 2024
Verified
The threat of expropriation creates an incentive for the multinational firm to minimize inventory holdings in certain countries and to bring in goods only as needed.
Threat Of Expropriation
The risk that a government will seize private assets or significantly alter their value through regulations or other actions.
Inventory Holdings
The total value or quantity of all the goods a company has in stock, representing a significant component of its assets.
- Pinpoint the obstacles and approaches associated with political risk and expropriation within the realm of international finance.
Verified Answer
EO
EMMANUEL OWUSU ANSAHJun 19, 2024
Final Answer :
True
Explanation :
When there is a threat of expropriation, the multinational firm may be hesitant to invest heavily in a particular country. This can lead to a strategy of minimizing inventory holdings in that country and bringing in goods only as needed to reduce the risk of losing their assets.
Learning Objectives
- Pinpoint the obstacles and approaches associated with political risk and expropriation within the realm of international finance.
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