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RST Corp plans to expand its business into Canada. However, it is concerned with two independent types of Country Risk in the next year: .

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RST Corp plans to expand its business into Canada. However, it is concerned with two independent types of Country Risk in the next year: . a 15% chance that the Canadian government will impose a special tax on funds remitted to the parent company a 15% chance that the Canadian government will force a sale of the subsidiary to a local company . What could RST do to effectively negate the risk of the special tax? Retain any profits from the subsidiary and re-invest them into the subsidiary Buy political risk insurance protecting them against asset expropriation Borrow Canadian funds to fund expansion of the subsidiary Cut operating expenses at the Canadian subsidiary RST Corp plans to expand its business into Canada. However, it is concerned with two independent types of Country Risk in the next year: . a 15% chance that the Canadian government will impose a special tax on funds remitted to the parent company a 15% chance that the Canadian government will force a sale of the subsidiary to a local company . What could RST do to effectively negate the risk of the special tax? Retain any profits from the subsidiary and re-invest them into the subsidiary Buy political risk insurance protecting them against asset expropriation Borrow Canadian funds to fund expansion of the subsidiary Cut operating expenses at the Canadian subsidiary

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