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Multinational firms riskier than purely domestic firms

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1. Are multinational firms riskier than purely domestic firms?

2. What data would you need to address this question?

3. Is there any reason to believe that MNCs may be less risky than purely domestic firms? Explain.

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Solution Summary

The solution explains in detail whether multinational firms are riskier than purely domestic firms, and why.

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1. Are multinational firms riskier than purely domestic firms?

Ans: Although multinational corporations are confronted with many added risks when venturing overseas, they can also take advantage of international diversification to reduce their overall riskiness. Foreign operations enable MNCs to retaliate against foreign competitive intrusions in the domestic market and to ...

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