Respuesta :
This is false Because political risk is seldom negotiable, it cannot be explicitly addressed in multinational corporate financial analysis.
Political risk is the possibility that a country's political unrest or changes could have a negative impact on an investment's results. A change in the executive, judicial, legislative, or military branches of government could cause instability that would have an impact on investment returns.
Government policy adjustments to alter controls imposed on exchange rates and interest rates may result in political dangers. Additionally, lawful government acts like limitations on pricing, outputs, activities, and currency, and remittance restrictions might result in political risk.
Political risks can thus be classified into two categories, such as macro risks and micro risks, based on the situations.
Political risk for multinational corporations is the possibility that the host nation will take political actions that prove to be detrimental to the company's objectives or financial performance.
A multinational corporation (MNC) that grows globally faces risks specific to the various nations and regions in which it seeks to operate, such as institutional failures, criminality, political instability, and violence, as well as changes in currency exchange rates.
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