Question

Terrorism creates an economic risk for firms, which:____________ a. reduces the amount of investment foreign companies will make in a country perceived to be terror prone. b. is absorbed by firms that are highly geographically diversified and that operate in both secure and insecure locations. c. is offset by the above-average returns for firms that have learned how to operate in such an environment. d. is created by governmental bans on doing business with terrorist regimes.

Answer 1

The correct answer is a. reduces the amount of investment foreign companies will make in a country perceived to be terror prone.

Step-by-step explanation:

Terrorism is synonymous with insecurity and poor markets, which largely determines the decision not to enter these types of markets that present security problems. This feature makes the markets unattractive, taking into account how difficult it would be to meet all the necessary requirements to operate, added to the great probability of having large losses due to the fact that the custody of the intended goods could not be guaranteed. to sell.