Question

Which one of the following statements is most correct about the advantages of a joint venture...

Which one of the following statements is most correct about the advantages of a joint venture as compared to a greenfield investment?

Political risk is eliminated because of a local partner

The local partner's contacts and reputation provide easier access to host country's capital markets

Financial disclosure between joint venture partners is always transparent

Political risk is eliminated because of a local partner AND The local partner's contacts and reputation provide easier access to host country s capital markets

Local and foreign partners may have may disagree on strategic and financing issues

Homework Answers

Answer #1

OPTION B-----The local partner's contacts and reputation provide easier access to host country's capital markets----------ANSWER

A joint venture may enable companies to enter a new market very quickly as all relevant regulations and logisics are taken care of by the local partner.

All other options are wrong since;;;-

option A---- Political risk is reduced but not eliminated

Option C---Parties to Joint venture mange their own finances, operates as separate legal entity

Option D--- Since Political risk can't be eliminated wholly

Option E- Both parties work in harmony

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