Identify whether each of the following statements is true or false.

Statements

True

False

Generally, the political risk related to foreign investment is not added to the required rate of return.

A technique to lower the risk of multinational capital budgeting is to finance the foreign subsidiary with funds raised in a country in which the asset is not located.

A technique to lower the risk of multinational capital budgeting is to finance the foreign subsidiary with funds raised in the host country.

A tool to lower the risk of multinational capital budgeting is to purchase insurance against the loss from expropriation of funds.