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CFA Level 2 - Financial Statement Analysis - Multinational Operations
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A multinational company is considering expanding its operations into a country with a history of political instability. Which of the following risks should the company be most concerned about when assessing the viability of this expansion?
a.
The risk of supply chain disruptions due to inadequate infrastructure in the target country, which could lead to increased costs and delays in production and distribution.
b.
The risk of cultural differences between the company's home country and the target country, which may lead to difficulties in effectively managing local operations and maintaining positive relationships with local stakeholders.
c.
The risk of government intervention, such as expropriation of assets or unexpected changes in regulations that could negatively impact the company's operations and profitability in the country.
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