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Political and Monetary Risk in Foreign Investment

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There are risks involved when organizations engage in trade and business with other nations.

1. Discuss the following items: monetary risk, political risk, foreign portfolio investment (FPI), and foreign direct investment (FDI).

2. Discuss how political risk and monetary risk may impact an organization's desire to engage in both foreign portfolio investment and foreign direct investment with another nation.

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Here you go:

1. Discuss the following items: monetary risk, political risk, foreign portfolio investment (FPI), and foreign direct investment (FDI).

- Monetary risk is the risk that a business operation or investment value will be affected by changes in exchange rates. This happens when money is converted into a different currency to make an investment and changes in the value of the currency of the American dollar will affect the total loss or gain on the investment when the money is converted back (InvestorWords, n/d).

- Political risk is the complications that businesses and governments may face as a result of political changes. This could be as a result of political unrest, economic decisions in the company or political decisions regarding fiscal policy, for instance.

- Foreign portfolio ...

Solution Summary

This solution discusses the risks involved when organizations engage in trade and business with other nations, answering the following:

1. Discuss the following items: monetary risk, political risk, foreign portfolio investment (FPI), and foreign direct investment (FDI).

2. Discuss how political risk and monetary risk may impact an organization's desire to engage in both foreign portfolio investment and foreign direct investment with another nation.
APA references are included.

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