Because of the very nature of their businesses, multinational companies are exposed to
higher levels of risk with their revenues and expenses. This risk can be even higher if the
currencies of their foreign subsidiaries are not tied to the U.
The capital asset pricing model, or CAPM, explains the relationship between risk and return.
Investors want to be compensated for their investment, along with the commensurate amount of
risk. Money has time value associated with it. You would never consid
International trade more inherent risks than domestic trade. There are concerns on both sides of
the exchange, and there may be limitations for legal recourse if things go wrong. Countertrade
can help minimize the risks of international trade