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uestion: Mamma Mia Pizza has invested $1,000,000 in a restaurant in Rome. At the time of the investment the exchange rate is $1.25 = 1.00.
uestion:Mamma Mia Pizza has invested $1,000,000 in a restaurant in Rome. At the time of the investment the exchange rate is $1.25 = 1.00. A year later the exchange rate was the same, but the Italian government expropriated Mamma Mia's assets paying only 800,000 in compensation. This is an example of????????????????????
- political risk.
- None of the options.
- market imperfections.
- exchange rate risk.
- Expropriation by the Italian government did not constitute a risk since $1,000,000 = 800,000 $1.25/1.00.
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