Which statement/s regarding strategic risk management instruments is/are correct?
A Strategic risk management strategies address long-term uncertainty by creating real options.
B Mergers & acquisitions can be used to reduce the price effect of economic risk (transaction risk).
C Operating flexibility relates to a company’s ability to reduce the risk of its portfolio of operations.
D Diversification refers to a company’s ability to react to changes in the environment and increase the return on investment (real options)
E Strategic finance decisions involve the procurement of capital from sources that create financial real options (cross-listing, foreign loans, foreign equity)
F An important element of strategic risk management is the choice of location and entry mode for international operations. These choices allow companies to diversify risks and create real options of operating flexibility
G Corporate social responsibility and corporate political activities can be considered strategic risk management tools because they may create real options (improved access to capital, customers and investment locations).

Answer rating: 100% (QA)

Answer Option D is correct D Diversification refers to a companys ability to react to cha... View the full answer