QUESTION 7 Which of the following statements about foreign affiliates is (are) true? In general, foreign affiliates are more profitable than domestic businesses, O Foreign affiliates usually lower the portfolio risk of the parent company All of these options are true, Foreign affiliates may have a significant positive impact on the host company's economic growth, employment, trade, and balance of payments. QUESTION 8 The purchasing power parity theory of exchange rates suggests that exchange rates will adjust until the cost of equivalent goods is approximately equal in each country. True O False