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An MNC wants to invest in India. Of the following entry modes, select the right order in terms of…

Standard analysis establishes the order branch office, co-operative joint venture, equity joint venture, portfolio investment and wholly owned subsidiary. Risk rises with…

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An MNC wants to invest in India. Of the following entry modes, select the right order in terms of increasing risk.

(a) Co-operative joint venture

(b) Branch office

(c) Portfolio investment

(d) Wholly owned subsidiary

(e) Equity joint venture

Select one answer
Answer and explanation

Correct answer B

Standard analysis establishes the order branch office, co-operative joint venture, equity joint venture, portfolio investment and wholly owned subsidiary. Risk rises with the capital committed and the share of ownership borne by the MNC alone: a branch office needs little investment, joint ventures share risk with a local partner, and a wholly owned subsidiary places the entire investment risk on the parent company.

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