Question

Exposure to foreign investment risks is nil or much lower in foreign trade. This is because of which of the following advantages of exporting/importing?

• A. It is less complex an activity.
• B. Exporting/importing does not require much of investment in foreign countries.
• C. Firms do not directly deal with overseas customers.
• D. All of the above

Answer 1

The correct option is B Exporting/importing does not require much of investment in foreign countries.

Foreign investments add diversity but there are risks. Investing in foreign countries is a relatively new option for individual investors. Luckily, the advent of internationally focused mutual funds and exchange-traded funds (ETFs) has made it easier.