ECONOMICS
TRADE EXCHANGE AND INTERDEPENDENCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Most ships did not complete the ocean voyage and investors lost their small share
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The colonists caught diseases from the Americas
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Investors shared the profits from the colonies when they thrived
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If the colony failed, investors lost their small share
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Detailed explanation-1: -International investing entails greater risk, as well as greater potential rewards compared to U.S. investing. These risks include political and economic uncertainties of foreign countries as well as the risk of currency fluctuations.
Detailed explanation-2: -Costs of FDI to Host Country’s Economy The adverse effects of unregulated FDI include reduced domestic research and development, diminished competition, crowding-out of domestic firms and lower employment.
Detailed explanation-3: -The risks associated with direct foreign investment are business risk, financial risk, exchange rate risk, and political risk. Direct foreign investment has the additional risk factors of exchange rate and political risk compared to domestic investment.
Detailed explanation-4: -Foreign investment risk – The risk of loss when investing in foreign countries. Political risk – The risk of loss when there are changes to the political leaders or policies in a country. Currency risk – The risk of losing money because of a movement in the exchange rate. More items •07-Jun-2021