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The market value of the Blackwell Corporation just declined by 5 percent. Analysts believe this decrease in value was caused by recent legislation passed by Congress. Which type of risk does this illustrate?

a. Diversifiable risk
b. Purchasing power risk
c. International risk
d. Poltical risk
e. Exchange rate risk

Respuesta :

Martebi

Answer:

Option d: Political risk

Explanation:

Political Risk is simply defined as likelihood of disruption of the operations of MNEs by political forces or events. It is termed as action of a government that limits firm value.

Governments intervene in subtler but just as costly ways today leading to:

- Tax and royalty increases

- Partial/Full nationalizations

- Breach of contract and others

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