Homework SourseAn MNC will likely benefit most from diversifying if the cor
An MNC will likely benefit most from diversifying if:
?the correlations between country economies are unknown.
?the variability of all country economy levels is high.
the correlations between country economies are high.
the correlations between country economies are low.
none of the options listed
An MNC will likely benefit most from diversifying if:
?the correlations between country economies are unknown.
?the variability of all country economy levels is high.
the correlations between country economies are high.
the correlations between country economies are low.
none of the options listed
An MNC will likely benefit most from diversifying if:
?the correlations between country economies are unknown.
?the variability of all country economy levels is high.
the correlations between country economies are high.
the correlations between country economies are low.
none of the options listed
An MNC will likely benefit most from diversifying if:
?the correlations between country economies are unknown.
?the variability of all country economy levels is high.
the correlations between country economies are high.
the correlations between country economies are low.
none of the options listed
Solution
Answer:
The correlations between the country economies are low.
The reason is that, with low correlation between the economic-variables of the two countries, it will be possible to minimize/offset risks arising due to change in economic variables in one country, as the changes are not identical in the other country. The changes would either be in the reverse direction or of lower magnitude.
