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1. Can you think of a reason why multinational corporations might be riskier than companies that...

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Finance

1. Can you think of a reason why multinational corporationsmight be riskier than companies that operate on the domestic marketonly. Explain briefly. (Hint: there are at least two good reasons,but you only need to come up with one)

2. Come up with a reason why, by going multinational, mostcorporations can reduce their total business risk. Can you think ofa food or agricultural-sector company whose internationaloperations clearly have such an effect?

Answer & Explanation Solved by verified expert
3.7 Ratings (437 Votes)
1Currency Risk At the top of the list is the management of currency risks A domestic company only has to worry about domestic currency When you have an operation in another country cash inflows and outflows are often handled in the local currency Unfortunately the conversion rates are constantly changing A    See Answer
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1. Can you think of a reason why multinational corporationsmight be riskier than companies that operate on the domestic marketonly. Explain briefly. (Hint: there are at least two good reasons,but you only need to come up with one)2. Come up with a reason why, by going multinational, mostcorporations can reduce their total business risk. Can you think ofa food or agricultural-sector company whose internationaloperations clearly have such an effect?

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