Answer (C) is correct . Reasons for international business expansion, known as direct foreign investment, can be both revenue-oriented (seeking new markets or avoiding trade restrictions) and cost-oriented (seeking cheaper inputs or favorable exchange rates.
Answer (A) is incorrect because Direct foreign investment increases exposure to political risk.
Answer (B) is incorrect because Direct foreign investment increases exposure to exchange rate risk.
Answer (D) is incorrect because A multinational company is subject to its home country’s regulations on the use of foreign technology.
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