Which concept refers to concerns about whether foreign profits are fairly distributed among local stakeholders?

• A. Operational Risk
• B. Currency Risk
• C. Distributive Risk
• D. Regulatory Risk

Answer: (C)

Distributive risk is about how the benefits of a business, like profits, wages, taxes, and other economic gains, are shared with people and institutions in the local community where the foreign operations occur. It asks whether local workers, suppliers, and residents receive a fair portion of the profits generated abroad, or whether most of the value flows back to distant owners or the corporate HQ. This differs from operational risk, which deals with the day-to-day processes and systems; currency risk, which concerns changes in exchange rates; and regulatory risk, which involves potential shifts in laws and rules. So when the concern is whether foreign profits are fairly distributed among local stakeholders, distributive risk is the right concept.