?Read the article below about financial risks. ?Choose the best sentence to fill each of the gaps, ?For each gap 8—12, mark one letter (A—a) on your Answer Sheet. ?De not use any letter more than once. ?There is an example at the beginning. Financial Risks Several types of financial risk are encountered in international marketing; the major problems include commercial, political and foreign exchange risks. Commercial risks are handled essentially as normal credit risks encountered in day-to-day business. They include solvency, default, or refusal to pay bills. The major risk, (8) which can only be dealt with through consistently effective management and marketing. One unique risk encountered by the international marketer involves financial adjustments. Such risk is encountered when a controversy arises about the quality of goods delivered, a dispute over contract terms, or (9) . One company, for example, shipped several hundred tons of dehydrated potatoes to a distributor in Germany. The distributor tested the shipment and declared it to be below acceptable taste and texture standards. The alternatives for the exporter were reducing the price, reselling the potatoes, or shipping them home again, each involving considerable cost. Political risk relates to the problems of war or revolution, currency inconvertibility, expropriation or expulsion, and restriction or cancellation of import licenses. Political risk is an environmental concern for all businesses. Management information systems and effective decision-making processes are the best defenses against political risk. As many companies have discovered, sometimes there is no way to avoid political risk, (10) . Exchange-rate fluctuations inevitably cause problems, but for many years, most firms could take protective action to minimize their unfavourable effects. Floating exchange rates of the world's major currencies have forced all marketers (11) . International Business Machine Corporation, for example, reported that exchange losses resulted in a dramatic 21.6 percent drop in their earnings in the third quarter of 1981. (12) , devaluations of major currencies were infrequent and usually could be anticipated, but exchange rate fluctuations in the float system are daily affairs.