Question

MedPlus Incorporated, based in the United States, hesitates to enter into a joint venture with Azpak Limited, a Sri Lankan company, due to inadequate protection of intellectual property rights. MedPlus is trying to avoid what type of risk?

Answer 1

Answer:

B) Legal

Explanation:

The legal risks that a company might face when engaging in international business are several and severe. For example, governing laws that regulate contracts are not the same for every country. Many countries have a very poor record in enforcing legal rights to both their citizens and foreign companies. Political instability may result in serious risks since sometimes a new government results in completely different laws.

Answer 2

Answer:

Legal Risk

Explanation:

Legal risk are damage, financial, reputational losses or any other form of loss received by a business due to negligence in compliance with the law related to the business. They are prospective fines or loses that a business or an organization receives for not complying with the business law and regulations.

In this case, the prospective loss could come by associating with Azpak limited which have inadequate protection of intellectual property rights.